Previous:
On Tuesday the euro closed up, despite the rate repeatedly returning to 1.0565. By the end of the day, a V-shaped pattern had formed. Over the last few days a W-shaped pattern has formed. The dollar received support from American stats and a fall in oil.
In the secondary US GDP assessment for Q3, the figures were changed from 3.0% to 3.2%. The first assessment had a strong effect on the market and so the second assessment’s effect was a short-term one.
The data strengthened any optimism for the US economy and the chances of a rate rise by the Fed. According to data from Group FedWatch Tool, the likelihood of a rate hike in December has risen from 93.5% to 98.6%.
From a 1.0565 minimum the price bounced 85 points to 1.0654. Here the dollar couldn’t be helped by the US consumer confidence index, even though it exceeded expectations.
Market expectations:
On Wednesday trader attention will be on the OPEC meeting in which the members should be concluding an agreement on a reduction in output. Media headlines will set the direction of the price of oil and commodity currencies.
After yesterday’s strengthening of the euro, I expect the forming of a V-shaped pattern. I reckon that after the strong US data and before the NFP, the euro is unlikely to rise. By the opening of the US session I expect a test of 1.0607.
Day’s News (GMT+3):
- 10:00, German retail sales for October, UK bank stress test results, BoE financial stability report and financial policy committee announcement;
- 11:00, Swiss index for leading indicators from Kof for November;
- 11:55, German unemployment changes in October;
- OPEC meeting;
- 13:00, Eurozone preliminary CPI for November;
- 15:30, planned ECB speech from Draghi;
- 16:15, US employment changes in November from ADP,
- 16:30, Canadian GDP in September, index for natural resource prices for manufacturers in October; industrial goods price index for October and US October CPI and expenses/incomes for October;
- 17:45, US Chicago business activity index for November;
- 18:00, US changes in incomplete sales on housing market for October and oil reserve changes for week ending 27th November;
- 19:45, US FOMC member Powell to speak;
- 22:00, US Beige Book out.
