Currency Analyst since 2010

Forex trading plan for November 25

Elizabeth Belugina

The Dollar Index (DXY) remains near the 8-month high in the 100.00 area, though American currency was undergoing a slight correction on Tuesday. The US released lower housing and manufacturing PMI data released on Monday, but on Tuesday American Q3 GDP was revised to the upside. Watch the publication of durable goods figures at 13:30 GMT on Wednesday. All in all, the greenback will likely trade rather moderately ahead of the bank holiday on Thursday (Thanksgiving Day).

EUR/USD formed a ‘hammer’ candle on Monday after testing 1.0600. The big figure allowed the pair to stabilize and consolidate a bit. There was also some fundamental help. The week started with rather positive figures from the euro area: the region’s manufacturing PMI released on Monday was the highest since April 2014, while European services PMI was at the maximum of 4 ½ years. On Tuesday German IFO business climate index has followed this bright suit with the reading of 109.0 (highest since June 2014). However, although some analysts have started to question whether the European Central Bank now needs to increase stimulus in De cember, the consensus is that it will. As a result, the market players are cautious with the euro longs at this point. Resistance is at 1.0670, 1.0700 and 1.0760. Support is at 1.0600 and 1.0520. Nothing very important in the euro zone’s economic calendar on Wednesday.  

GBP/USD slid below Tuesday opening levels on comments from the Bank of England’s Carney and Haldane. The policymakers outlined that negative risks for the British economy prevail and that the nation is expected to remain in low interest rate environment for some time. Decline below 1.5100 will open the way down to 1.5030/00 and 1.4975 (support line). Resistance is at 1.5155, 1.5200 and 1.5260. The UK Government will release Autumn forecast statement at 12:30 GMT.

USD/JPY corrected down to 122.40 on the market’s subdued risk sentiment. Support is at 122.22, 122.00 and 121.80. Resistance is at 123.25. The increase above 123.60 is unlikely, while the slide to 121.50 in the current environment is possible.

AUD/USD is consolidating around 0.7200. The Reserve Bank of Australia’s Governor Stevens sounded optimistic about the nation’s economic outlook, though underlined that the central bank is ready to act if necessary. If Aussie manages to stay above 0.7200, it may be able to test 0.7250 and 0.7280 (September highs). However, it’s clear that Aussie doesn’t have grounds for a sustainable rally. 

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