USDJPY moves back toward MA levels

Pair is down modestly

The USDJPY is trading near session lows and in doing so, is moving back toward its 200 hour moving average at 104.216 (green line in the chart below). The rising 100 hour moving averages at 104.132. Both those levels will act as the barometer for buying and selling.  Stay above is more bullish. Move below is more bearish.  

Pair is down modestly

On the downside the 104.032  to 104.094 are other levels to get below that would increase the bearish bias (see red numbered circles in the chart above).  

Of course, buyers could and should buy against the moving average levels on a test as well.  Which can be defined and limited against the area.   If the pair bounces, getting back above the 104.36 and the 38.2% retracement at 104.42 are the closest targets to get and stay above.  The 50% retracement at 104.659 is a more important upside target. On Monday and early Tuesday, the price moved up toward that level, only to find risk focused sellers leaning.  Yesterday in the New York session, the price did move above, but could not sustain momentum.  



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EURUSD chops around after run to the highest high since Sept 1 fizzles

First look above the November high stalls but buyers still more in control.

The EURUSD has chopped around today despite reaching the highest level since September 1 at 1.19292. 

First look above the November high stalls but buyers still more in control.

Looking at the daily chart above, the pair took out the November 9 high at 1.1919 but could not sustain any meaningful upside momentum on the break (see daily chart). Looking at the daily chart, it will take a move back above old November high level at 1.1919 (the September 10 swing high was at 1.19165 too) to give more of a bullish bias for the pair. The highest high for 2020 was on September 1 at 1.20105. The low for the year was back in March at 1.06347.   The last 4 months has seen the pair consolidate the gains between 1.1601 and 1.2010 (call it 1.1600 to 1.2000).  The buyers are still more in control (the pair is above the 100 day MA at 1.1754).  At some point, the range will be broken.  

Drilling to the hourly chart, the choppy price action today is most viewable.  The run above the November high at 1.1919 was only a brief look, before moving lower.  There is a swing area between 1.1889 and 1.18932 which should act as a barometer for the intraday bias.  Stay above is more bullish. Move below is more bearish. There was a try below in the early New York session, but that break failed (I said the markets were choppy).  

Before the 1.1919 level is the high from Monday at 1.19053.  The prices just moved above that level which increases the positive/bullish bias.  

EURUSD on the hourly chart



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US October advance goods trade balance -$80.3 billion vs -$80.4 billion expected

Latest data released by the Census Bureau - 25 November 2020


  • Prior -$79.4 billion

  • Exports $126.0 billion (+$3.4 billion)

  • Imports $206.3 billion (+4.4 billion)

The deficit increased a little in October after a slight bounce in September from the August record. It's not a good sign for growth but this is somewhat offset by services exports.




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WTI crude oil breaks the August high

Breakout for crude?

Breakout for crude?

Oil has made a habit of false breakouts lately but this is definitely one to watch. WTI crude oil is up 68-cents today to $43.73 and touched $43.89. The high in August was $43.78.

A breakout here would be into some blue skies but beware of the OPEC+ meeting next week.



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The EURUSD runs up to last week's high and backs off to the 100 hour MA

Technical levels are defined

Recall that last week, the EURUSD was mired in an 80 pip up and down trading range. The low reached 1.18135. The high reached 1.1893.  

Technical levels are defined

Yesterday, that range was extended on the topside with the move up to 1.19053 and then extended on the bottom side on the tumbled lower with a move down to 1.17992 (call it an even 1.1800.  By the close, the price had retraced nearly to the 50% retracement at 1.18522 of the range yesterday and traded above and below the 200 hour moving average (green line in the chart above). It also stayed just below a swing area between 1.18487 1.18515 (see red numbered circles). 

Today, the price chopped modestly higher, before basing against its 200 hour moving average (green line) and racing above the 50%, the aforementioned swing area (red numbered circles), and the 100 hour MA (blue line).  The tilt of the bias was once again shifted more to the upside.   

That tilt and momentum higher took the price all the way up to the highs from last week between 1.1889 and 1.1893 (see blue numbered circles).  Sellers leaned this time, and the price move back to the downside but held support at the 100 hour MA (blue line).

The holding of resistance against the swing area and the holding support against the 100 hour moving average have defined a technical range. The current price trades around 1.18704 as buyers and sellers now battle it out.  

Ultimately, the price will need to make a concerted break outside the 80 pip range from last week.   Yesterday it tried twice - once to the upside and once to the downside. Each failed and ultimately saw snap back moves (one down and one back up).  The price being above the 100 hour MA, above the 200 hour MA and above the middle swing area, gives the technical nod to the buyers, but as we have seen that advantage can easily shift.  So watch close support at the 100 hour MA. Hold and hope for more upside. Break and then look for the confirmation of the shift back through the middle swing area and the 200 hour MA to put the sellers back in the drivers seat.  



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AUD/JPY still a key pair to watch in confirming any major shift in the risk bias

AUD/JPY trades 0.7% higher today but nears familiar resistance

AUD/JPY D1 24-11

The pair tends to act as a key risk barometer in the market and this time is not much different. As the aussie looks to secure a breakout to the upside against the dollar, AUD/JPY is also pushing higher but not really breaking out in quite similar fashion.

The pair is up 0.7% to around 76.70 levels now but is nearing familiar resistance around the 76.75 to 77.00 region. That helped to stall gains at the start of the month and will be the key spot to watch to confirm any major shift in the risk bias.

Equities look poised for another solid day of gains so far in European trading, but major currencies look like they may need a further push to solidify any notion that we are going to switch towards a risk-on wave after the push and pull since last week.

SPX

Despite modest gains yesterday, the S&P 500 still closed below 3,588 and the 3,600 level. However, US futures are pointing towards a 25 points gain to test the latter and that will be a key technical level to watch ahead of the close in the next few days.

For risk buyers, keeping above that will be crucial to allow for the more upbeat sentiment to translate elsewhere and in particular, perhaps help to drive AUD/JPY beyond resistance at 76.75-00 as highlighted above.

As such, risk buyers are in a good spot to do so but more work needs to be done as we approach yet another run at the key technical levels above.




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EUR/USD touches 1.1900 as dollar eases lower on the session

The dollar is keeping weaker across the board so far today

EUR/USD D1 23-11

EUR/USD is once again testing the 1.1900 handle, reaching a high of 1.1906, as the dollar is seen weaker so far in European trading today.

Risk remains in a better spot with European equities posting a modest advance of around 0.5% to 0.7% currently while S&P 500 futures are also higher by 0.6%.

But the movement out of the dollar looks more flow-based than any reaction to risk, with the greenback sitting as the weakest performer among the major currencies.

Even with 10-year Treasury yields up 2.5 bps to 0.849%, USD/JPY is down to 103.70.

Looking back to EUR/USD, buyers will have a key test ahead of the close today in trying to keep above the 1.1900 handle. The 9 November pop on the vaccine news saw the high touch 1.1920 and a push above that will start to bring 1.2000 back into the picture again.

Otherwise, a failure to hold another break above 1.1900 may lead to some exhaustion as the pair continues to consolidate just below that.

Elsewhere, AUD/USD is still settling around 0.7320-30 levels with short-term resistance at 0.7340 still holding. GBP/USD is off earlier highs of 1.3380 to sit around 1.3350-60 levels while NZD/USD is still flirting with a retest of the December 2018 high of 0.6969.



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Cable extends gains to start the session as pound keeps more perky

GBP/USD pushes to session highs above 1.3340

GBP/USD D1 23-11

The pound is continuing to keep higher to start the session, with cable now rising near 1.3350 as there has been a few more positive news in the UK to start the week.

The mood music surrounding Brexit talks is continuing to fuel hopes for a deal in the coming days, while AstraZeneca's vaccine news is also providing some added light at the end of the pandemic tunnel.

Adding to that is the UK government set to confirm the end of lockdown on 2 December and revert back to a slightly tighter 'traffic light' system as before, with virus cases showing signs of plateauing; albeit still at a high base, similar to that at the end of October.

But going by the technicals, the pound is also in a good spot as we see cable crack the 1.3300 handle after having formed a double-top around the figure level last week.

There isn't much in the way of buyers from a move towards 1.3400 next with the 1 September high @ 1.3483 a key level to watch if the topside momentum extends.

Looking ahead, Brexit headlines will likely be the catalyst for any major make or break in pound sentiment this week so let's see what that has to offer in the coming days.



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Germany reports 10,864 new coronavirus cases in latest update today

Another low Monday count due to the weekend effect

Germany

Even with the low count, it is roughly similar to last Monday (16 November) and that sort of gives an idea that the case count isn't quite abating just yet.

Active cases across the country are now nearing 300,000 while another 90 deaths were reported in the past 24 hours and that brings the total tally to 14,112 persons.

We're now starting the fourth week of 'lockdown light' and it is extremely likely that Merkel and state premiers will be extending the tighter measures into December.



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EURUSD stays on the low side of the 100 hour MA. The range for the week is only 80 pips so far (very

The low for the day moves below the 200 hour moving average but stalled ahead of the low from Monday (the week).

The EURUSD moved below its 100 hour moving average early in the Asian session, and did a good job of staying below that level into the early European hours (no hourly close above the moving average line).  

The low for the day moves below the 200 hour moving average but stalled ahead of the low from Monday (the week).

The European session has seen a modest decline to the downside took the price from and intraday high near 1.1851 to a low of 1.18157. That low in the London morning session was just above the Monday low price of 1.18135. Buyers against the week's low has led to a modest rise. The price has traded above and below the 200 hour moving average at the 1.1831 level over the last few hours.

The tilt is a little more in the favor of the downside and that the 100 hour moving average at put a lid on the price. However, the buyers can also argue that the holding of the week's lows and move back above the 200 hour moving average is good news for them.

So both buyers and sellers have some skin in the game and can claim a victory from a technical perspective with risk defined. The topside risk for sellers would be at the 100 hour moving average at 1.18512. Stay below is more bearish. On the downside the dip buyers would not want to see new lows for the week below 1.18157. 

Of consideration is that the range for the entire week is only 80 pips in the pair. That is below the lowest trading ranges for the week this year at about 85 pips (see the weekly chart below). So if you believe that it is most likely that the range is extended to something larger, one way would be taking out the low (stating the obvious) between now and the end of week on Friday. Stay below the 100 hour moving average would keep that hope alive for the and sellers. 

EURUSD on the weekly chart



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