EUR/USD forecast: looking at risk trends – Commerzbank and Danske Bank

Pablo Piovano FXStreet

FXStreet (Edinburgh) - EUR/USD is extending its correction lower after the release of November’s US Payrolls on Friday, navigating the mid-1.08s amidst an uneventful start of the week.

Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair “charted an inside day on Friday, attempting to absorb the massive rally from the day before. There is scope for a further advance to the 1.1034 200 day ma and even the 1.1087/97 September low and 28th October high. Key resistance remains the 1.1228/17 2014- 2015 downtrend and 55 week ma and while capped here the market will remain in a longer term down move”.

Furthermore, Analyst Kristoffer Lomholt at Danske Bank, added “Friday’s price actions, when EUR/USD actually moved higher after the stronger than expected non-farm payroll data, in our view, underscore how stretched EUR/USD positioning currently is and, although positioning is no barrier for renewed EUR/USD downside, it usually increases short-term correction risks. This is yet another argument why it might be difficult for EUR/USD to fall significantly in the near term”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.