USD Index (#DXY) is in a tight range and fundamentally supported by rate hike expectations although this may well be priced in the market, After it had marked the 95.05/15, the DXY could not hold its levels and subsequently drifted back to the 93.40 higher low well within is near term up swing.
The recent correction on the EURO was mainly attributed towards Germany's Chancellor Angel Merkel declared failure in forming a coalition government. But we see this as a temporary setback which resulted to a decline with the #EURUSD making a low at 1.1722 after reaching last week's high near the more important levels of 1.1860/80 price range. It is only by staying above this price level can we consider a positive breath that can be sustained for the Euro. Thus a retest of the previous 1.2000 levels would not be discounted.
The recent correction on the EURO was mainly attributed towards Germany's Chancellor Angel Merkel declared failure in forming a coalition government. But we see this as a temporary setback which resulted to a decline with the #EURUSD making a low at 1.1722 after reaching last week's high near the more important levels of 1.1860/80 price range. It is only by staying above this price level can we consider a positive breath that can be sustained for the Euro. Thus a retest of the previous 1.2000 levels would not be discounted.
That drives us to reconsider a near term corrective move for the USD. However, since there is a relative correlation with the Sterling Pound's price action back towards a recovery, the end result would be a conflicting price direction for the #EURGBP Cross rate. As the EURGBP is at its initial price recovery session where a pullback can occur when the EURO fails to go above the 1.1880 by the end of the trading week.
While the UK is getting ready to make an offer with a #BREXIT bill before December summit just time for the US rate hike. And this is also what Goldman Sachs predicted that the #FED would raise rates at least 4X by 2018. Supportive for the USD but not quite without a reasonable leg down to gain traction for a good rally.
For now a thin market would be more susceptible for the unexpected market swings being a Thanksgiving Holiday. Watch the before and after the holiday trading for some action.
Meanwhile, the following reports to watch areas follows:
> Wednesday: US jobless claims, durable goods orders; FOMC minutes;
> Eurozone consumer confidence
>Thursday: New Zealand retail sales;
>German GDP final; Eurozone PMIs, ECB monetary policy accounts;
>UK GDP revision ; >Canada retail sales
>Friday: Japan PMI manufacturing; German IFO; US PMIs
The USD DXY corrective move below 93.00 have led the EURUSD retesting the 1.2000 while the Euro is currently trading post 'Thanksgiving' at 1.1919 session high. Thus staying for the week above 1.1880 levels would signify a continuation for bullish sentiments to sustain further.
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