Daily F.X. Analysis, November 29 – Top Trade Setups In Forex – Brace for European Inflation Report! 

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to $1.1012. Official data showed that the eurozone’s Economic Confidence Index rose to 101.3 in November (101.0 expected) from 100.8 in October. Later today, November CPI (+0.9% on-year expected) and October jobless rate (steady at 7.5% expected) will be reported.

The German Federal Statistical Office will release November jobless rate (steady at 5.0% expected) and October retail sales (+0.2% on month expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

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EUR/USD – Daily Analysis

The EUR/USD currency pair found on the bearish track and representing 1.27 decline on the monthly opening rate of 1.1151. As of writing, the currency pair is trading near 1.10.

The EUR/USD currency pair is moving bearish at the end of November, having surged 2.33% during October. So, that was the most significant monthly increase since January 2018. However, the currency pair has come under pressure, pouring cold water over the optimism generated by October’s 2.3% gain.

On the other hand, Consumer spending, as represented by retail sales, is anticipated to have increased at an annualized rate of 1.1% in October, having increased by 3.4% in the previous month. The retail sales data is scheduled to release at 07:00 GMT.

Meanwhile, the data due at 08:55 GMT is expected to show the economy added 5,000 jobs in November, and the unemployment rate continued steady at 5%. The Post-German data, the focus would shift to the Eurozone consumer price index and the jobless rate, scheduled for release at 10:00 GMT. 

The EUR currency may come under the selling pressure and hit the bearish track if the German jobs data disappoint expectation. As we know, Germany is already facing bearish pressure from the external sector. If the labor market cools sharply, the consumers will likely shift on the purse saving mood, leading to a deeper economic recession.

On the other side, the EUR/USD currency pair will likely find love if the key data crosses the forecast figures. Notably, the gains could be short-lived due to the United States and China trade tensions. As we all well aware that President Donald Trump signed the Hong Kong Democracy Bill earlier this week, irritating China. That could hurt the trade matters.

Daily Support and Resistance

    

• S3 1.0958
• S2 1.098
• S1 1.099

Pivot Point 1.1002

• R1 1.1012
• R2 1.1024
• R3 1.1046

EUR/USD– Trading Tips

The EUR currency outlined a sideways trading pattern, which is signifying neutral bias among traders, and that’s mostly due to the limited volatility ahead of the weekend. However, traders are strengthening the downside bias put forward by the lower high at 1.1097 established on November 21.  

The 14-day relative strength index is proposing bullish bias, but it’s directing lower now as it’s valued may cross below 50. Let’s look for bearish trades below 1.1020 level today to target 1.1099 and 1.0960.

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GBP/USD– Daily Analysis

The GBP/USD currency pair is consolidating in the narrow range of 1.2910-1.2917. The pair got support from the polls showing continued fame of the ruling Conservative Party. Moreover, probably the reason behind the lack of more strength is the stepping back of the United Kingdom Prime Minister Boris Johnsons from certain debates.

After the YouGov’s poll of a clear lead of the ruling Tory Party over the opposition Labour Party, accusations on the United Kingdom Prime Minster raised as he stepped back from the debate on channel4 and is yet to confirm an interview with BBC’s Andrew Neil, as per the Independent. Whereas the opposition leaders have started using rude words and media support the reaction, probably due to this, they will lose their fame ere the December snap election.

The Conservative’s boss was recently criticized by the opposition Labour Party leader Jeremy Corbyn regarding selling the National Healthcare Systems (NHS) to the United States, citing leaked government papers. The decreasing chances of another strong poll supporting the Troy leadership and the greenback recovery are the major catalyst to drive trading volume in the GBP/USD pair.

So far, the market risk sentiment is still directionless, with the United States’ ten-year Treasury yields taking rounds to 1.77% with Asian equities flashing mixed signals.

Looking ahead, the half-day trading session in the U.S. and shortage of data and events will likely keep the market unactive. However, political and trade headlines will entertain the traders.

    

Daily Support and Resistance

• S3 1.2698
• S2 1.2794
• S1 1.2857

Pivot Point 1.2891

• R1 1.2954
• R2 1.2987
• R3 1.3083

GBP/USD– Trading Tips

On Friday, the GBP/USD continues to above the suggested support level of 1.2880. The pair has formed neutral candles above this level as traders are waiting for a fundamental reason to get in the market. 

On the 2-hour timeframe, the RSI and MACD are holding near 50 and 0, suggesting neutral bias among investors. Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

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USD/JPY – Daily Analysis

 The USD/JPY currency pair is flashing red and hit the session low near the 109.46, having hit the high of 109.60 three hours ago. As of writing, the currency pair is consolidating in the day’s range of 109.47-109.59.

The USD/JPY currency pair is stepping back, possibly following the slow descent of the S&P 50 futures. The index futures were down 0.10% in early Asia and are currently reporting a 0.26 decline. Bank of Japan’s (BOJ) Governor Kuroda was out on the wires a few minutes before press time asking for structural changes. Kuroda told Parliament that structural reforms must accompany fiscal and monetary stimulus measures to heighten the economy’s long-term growth potential and added that the central bank’s ultra-loose policy is aimed at boosting inflation to 2% and not monetize debt. 

Governor Kuroda’s comments are not surprising because the central bank has little capacity to stimulate, having run an expansionary monetary policy for more than 6-years. 

Looking forward, the Japanese Yen will likely continue to gain ground, because equities may trade risk-averse in the wake of the decision by President Trump to sign the Hong Kong Democracy Bill. 


Daily Support and Resistance

• S3 108.42
• S2 108.92
• S1 109.24

Pivot Point 109.42

• R1 109.74
• R2 109.93
• R3 110.43

USD/JPY – Trading Tips

The USD/JPY is consolidating at 109.425, and it has just begun to trade in the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour graph, the USD/JPY has created a Doji and Spinning top, which typically implies chances neutral bias in the USD/JPY.  

On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So look for taking a sell trade below 109.700 today to target 109.200 and buying above 109.300 to target 109.700. 

All the best!