Forex trading plan for November 26
By Kira Iukhtenko
As we expected, the US Dollar gained some ground since the beginning of the week: USD index has finally breached above 100 points. Expecations for a rate hike are growing very quickly, it has already reached 78% on the futures market. On Wendnesday the US released a bunch of mixed data, but the market is now ignoring all the pessimistic points. Focus switched to the ECB meeting on December 3 and the US labor market data on December 4. Market will be working in a wait-and-see mode in the coming days. Bullish USD expectations will likely push the greenback to new highs at the beginning of December.
USD index. Source: Bloomberg
Meanwhile, on Thursday the US markets are closed due to the Thanksgiving day celebration. Liquity on Friday is also expected to be rather thin because of the “black Friday”. We concede a short-term USD bearish retracement, but its is very unlikely to last long.
EUR/USD has finally managed to break below the 1.0600 mark and is trading at the 7-year lows on Wednesday. Expectations remain highly bearish. According to many economists, ECB easing measures could be even harder than the market is now pricing in. As for the technical picture, the pair is forming a «bearish engulfing» on the daily chart. Next support is seen at 1.0450 – these are the March 2015 lows. We do not expect the price to fix below 1.0450 before the ECB, but a test is very likely.
We’ve analyzed more currency pairs in our video report.