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4 Global Market Updates- 16 November, 2022

In this article, we have covered the highlights of global market news about the GBP/USD, USD/CHF, USD/CAD and EUR/USD.

GBPUSD: UOB sees declining bets on a breakthrough of 1.2100

According to UOB Group economists Lee Sue Ann and Quek Ser Leang, there is less chance that the GBPUSD will rise over 1.2100 shortly.

24-hour view: “Our prediction that the pound will “trade between 1.1680 and 1.1825” yesterday proved to be false as the pound soared to 1.2027 before falling to 1.1792 and then rising to finish at 1.1868 (+0.92%). The sudden decline under overbought circumstances indicates it is doubtful that the pound will gain further ground. GBP is more likely to move between 1.1800 and 1.1950 today.

Within the next three weeks: “On Monday (14 November, spot at 1.1795), we emphasized the solid upward momentum and maintained the opinion that there is an opportunity for the GBP surge to go up to 1.1910, maybe 1.2000. Our prediction that the rise will continue proved accurate as GBP soared to a high of 1.2027 in NY trading before abruptly falling.

GBP may stabilize for a few days before making another push higher, according to the retreat under overbought circumstances. However, the likelihood of a clear breach of the following significant resistance at 1.2100 seems insignificant. Notably, 1.2027 is already a powerful resistance level. A breach of 1.1750 on the negative would signal that the GBP rise is about to pause.

USDCHF Price Analysis: A bear flag keeps sellers optimistic in the mid-0.9400s.

As European traders get ready for a busy Wednesday, USDCHF accepts offers to recoup the day’s early gains at 0.9440.

As a result, the Swiss Franc (CHF) continues to retrace from the 21-SMA while displaying a bearish flag chart pattern that points to further decline of the quotation.

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Aside from the retreat from the 21-SMA and the bearish pattern, the continuous trading below the two-week-old resistance line and recent improvements in RSI encourage USDCHF sellers.

However, for the bears to confirm the flag, a decisive downward breach of the 0.9370 support is required. The theoretical aim of 0.8840 might then be tested on the quotation after that.

However, the high from early January at 0.9340, the high from February near 0.9150, and the psychological level of 0.9000 may provide intermediate stops throughout the projected slide.

Recovery movements must also pass through the confluence of the 21-SMA and the top line of the stated flag, which is located at 0.9470.

After that, it’s possible for a run-up towards a resistance line that has been in place for two weeks and is now at 0.9695.

If USDCHF holds above 0.9695 and 0.9700, the 200-SMA around 0.9900 will be in focus.

USDCAD declines to 100-DMA amid weaker oil prices, US Retail Sales, and Canada inflation.

Despite rebounding from the previous day, USDCAD finds it challenging to defend buyers around 1.3270–80 going into Wednesday’s European session.

This way, the Loonie pair captures the trader’s trepidation before the critical US and Canadian economic reports. The most recent mood changes are also likely to have contradicted the USDCAD swings.

The risk-off mindset was sparked late on Tuesday by the news that two Russian-made rockets had been launched toward Poland, killing two people. The same led to emergency meetings of the Group of Seven (G7) and NATO, which in turn supported the US Dollar (USD) owing to its attractiveness as a haven.

However, the most recent information reported by the Associated Press (AP) cited the conclusions of an unnamed US official and suggested that Ukraine may have launched the missile. Consequently, risk aversion decreased, and the dollar lost some early-day gains.

Buyers of USDCAD seem optimistic by market expectations for positive US data and the Bank of Canada’s (BOC) negative stance. On Tuesday, the US Producer Price Index (PPI) for October slowed to an annualized rate of 8.0%, below both the market consensus of 8.3% and the previously downwardly revised 8.4%. It’s important to note that the monthly data fell short of estimates for 0.5% while repeating the 0.2% before (reduced from 0.4%). In addition, the Empire State Manufacturing Index of the Federal Reserve Bank of New York increased to 4.5 in November from -9.1 in October and the market forecast of -5. October’s US retail sales are predicted to expand by 1.0% compared to the previous month’s 0.0%.

EURUSD confronts a significant barrier at 1.0480 – UOB

According to UOB Group economists Lee Sue Ann and Quek Ser Leang, further gain in the EURUSD is anticipated to encounter strong resistance in the coming weeks near the 1.0480 range.

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“We did not anticipate the spike in volatility,” the 24-hour perspective said of yesterday’s choppy EUR trading between 1.0278 and 1.0480. (we were expecting range trading). The price action volatility has produced a mixed picture, and the EUR might trade turbulent for some time to come, perhaps between 1.0270 and 1.0420.

Within the next three weeks: “We said on Monday (14 November, spot at 1.0325) that EUR is expected to climb higher and that 1.0400 is the next milestone to monitor. While our prediction that the euro would climb further proved accurate, we were unprepared for the erratic price movements, as the euro soared to a high of 1.0480 in NY trading before falling hard. The short-term rising momentum has slowed a little, but as long as 1.0230 (the previous day’s “strong support” level at 1.0200) holds, EUR might continue to rise. However, 1.0480 is now performing as a strong resistance level, and the EUR could find it challenging to break beyond.

Please click here for the Market News Updates from 15 November, 2022.

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