In this article, we have covered the highlights of global market news about the EUR/USD, NZD/USD, USD/CHF and USD/CAD.
EUR/USD bears target 1.0510 as recession worries boost the US Dollar ahead of the Fed vs. ECB game.
As traders anticipate this week’s major developments early on Monday, EUR/USD continues to decline around 1.0500, registering slight losses to prolong Friday’s negative trend. The US Consumer Price Index (CPI) for November and the monetary policy gatherings of the US Federal Reserve, the European Central Bank (ECB), and others get the most attention.
Fears of an economic slowdown inside the bloc and beyond, brought on by the demand for safe-haven assets like the US Dollar, add to pre-event nervousness and impact EUR/USD values.
“There is a possibility of a recession, but it definitely isn’t something that is essential to drive inflation down,” US Treasury Secretary Janet Yellen said late Sunday. Furthermore, because there is a negative gap between US 10-year Treasury bonds rates and the coupons on two-year bonds, the worries of an economic slowdown may be related to the yield curve inversion.
Francois Villeroy de Galhau, governor of the French central bank and a European Central Bank (ECB) Governing Council member, said on Friday that “a brief recession cannot be precluded.” It’s important to remember that the bloc’s conflict with Russia and the latest oil price ceiling on Moscow’s energy exports increase the likelihood of a regional economic downturn. The most recent readings of the November month activity data for the Eurozone, which were negatively revised last week, add to the gloom.
NZD/USD Price Analysis: A Rally to 0.6500 Looks Likely
At the time of writing, the NZD/USD pair is one inch away from the round-level resistance of 0.6400 after briefly falling below that level in the early Asian session. Despite the risk-off market atmosphere ahead of the Federal Reserve’s (Fed) monetary policy meeting on Wednesday, the Kiwi asset has made an effort to rebound more strongly.
Meanwhile, the US Dollar Index (DXY) shows weariness after failing to overcome the 105.20 primary barrier. In intraday trading, the 10-year US Treasury rates changed direction and fell below 3.56%.
NZD/first USD’s goal is to overcome the 0.6470 resistance level, established by the high on August 12. The Kiwi asset may encounter new obstacles at the June 3 high of about 0.6576 after overcoming the existing barrier at 0.6470. The 20- and 200-period Exponential Moving Averages (EMAs) at 0.6214 form a bull cross, which suggests more upward movement.
A continuation of the uptrend is expected, given the Relative Strength Index (RSI) (14)’s oscillations in the positive region of 60.00-80.00.
USD/CHF Price Analysis: 50-day moving average probes bulls within collapsing wedge
Even though the 50-Hour Moving Average (HMA) tests the buyers during the early hours of Monday in Europe, USD/CHF manages to post modest gains around 0.9360. In doing so, the Swiss Franc (CHF) pair maintains its position inside a short-term falling wedge bullish chart pattern and validates bullish MACD signals.
Nevertheless, the quote’s most recent decline becomes less concerning beyond the support line of the indicated wedge, or at the latest, around 0.9310.
By breaching the 0.9310 support, the quotation may defy the bullish chart pattern, but the round number 0.9300 may serve as an additional filter to the south before appeasing the USD/CHF bearish.
In such an event, the pair sellers will pay close attention to the lows recorded in April and March, respectively, noted at 0.9195 and 0.9150.
If broken, the 50-HMA obstacle of 0.9365 might push the top line of the indicated wedge closer to 0.9395 at the earliest. In the meanwhile, recovery movements require a confirmation from this level.
USD/CAD pares intraday gains in the mid-1.3600s as oil prices bounce, according to BOC’s Macklem.
As traders in the Loonie pair become more cautious ahead of a speech by Bank of Canada (BOC) Governor Tiff Macklem, USD/CAD consolidates daily gains around 1.3650 going into Monday’s European session. The recent increase in the price of WTI crude oil, Canada’s primary export commodity, may also provide difficulties for the pair purchasers.
However, it is essential to note that while traders wait for Tuesday’s US Consumer Price Index (CPI) and Wednesday’s Federal Open Market Committee (FOMC) meeting, the hawkish Fed bets and economic fears keep the US Dollar stronger.
WTI crude oil records modest gains at $71.80 as it recovers from the annual low and breaks a six-day decline. Thus, the black gold symbolizes concerns about a supply shortage as Russian President Vladimir Putin refuses to deliver oil to nations that disagree with the EU-led oil price limitations. The Keystone pipeline stoppage, which would represent a significant loss of energy supplies to the US, is another possible factor that might impede oil flow.
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