Last Week’s Market Overview

GBP

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The British Pound had a significant surge and refreshed the monthly highs at the beginning of last week thanks to the speech signalled the agreement was within reach by EU negotiators. However, there was no any breakthrough by the soft deadline (last Wednesday) set by UK Prime Minister, the GBP then retreated about 185 pips within three days. The market is currently calming down as the trade deal talks have resumed and extended to mid-November. The market is waiting for the outcome of major contention like fishing between UK and EU. GBP is highly possible to remain volatile until some progress can be shown.

Crude Oil

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The crude oil was definitely the worst performer last week and it is mainly caused by the worsened pandemic across the globe, lowering the demand for oil. The number of infections in many countries, such as German, France and Spain have jumped to a record high. The oil dropped for the whole week amid the pessimism on a tighter oil market in the near future attributed to the second-round of lockdowns and travel curbs in Europe.

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(Source: SciencesPo)

Market Change Last Week

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Market Focus This Week

European Central Bank (ECB) Interest Rate Decision

ECB is going to hold an interest rate decision meeting on coming Thursday. After a strong rebound in the third quarter, the pace of economic recovery is slowing down due to the resurgence of COVID 19 across the Europe in October. Nonetheless, the market consensus on the meeting is remaining the interest unchanged. Many investors believe that ECB would wait until the next meeting for taking other actions and it also prefers quantitative easing to rate cut.

Furthermore, the ECB is going to use a new strategy on inflation target, by which it is no longer ceiled at 2%. The ECB will move only if it is deviate from 2% too far, signalling the central bank is welcome to a quicker increase in inflation rate.

CPI (year on year) and GDP (quarter on quarter) released on next Friday are two important indicators measuring the economic performance of the third quarter. They are expected to be 0.2% and 9.2% respectively.

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(Source: ECB)

Technical Analysis

NASDAQ (H4)

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Nasdaq failed to break out the psychological resistance at 12000.00 and thus pulled back quickly from high. Last week, it was hovering near 11500.00 interval and the death cross of MAs marked the end of its uptrend. Today, it broke the support at 11500.00 and is currently trading around 11350.00. The main driver is probably the dampening hope of the economic stimulus package. Given that RSI is below the 50-threshold, we expect the bearish momentums could be continued and the bears are eyeing for 11000.00.

Support: 11000.00, 10500.00

Resistance: 11500.00, 12000.00

Crude Oil (H4)

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Crude oil retreated from near 42.00 last week, but its price was still confined in the consolidation zone ranged between 39.00 and 42.00. After the price penetrated the lower bound of the zone yesterday, it keeps struggling to climb up to the zone again. We expect it will continue to test the resistance in coming few days. If the RSI goes back to above 50 and the oil can successfully stand above the lower bound of zone, it is likely to repeat the fluctuations as before. Conversely, it might plummet to test the support at 36.50, a price level not seenGB since October.

Support: 37.00, 36.50

Resistance: 39.00, 42.00

GBPUSD (H2)

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The sterling declined for several successive days last week after fail to bridge the gaps with EU before the soft deadline of Brexit talks. According to chart, RSI is approaching the 50-threshold, and the fast and slow MA lines are getting closer, so GBP might find the support level and halt any further declines soon. However, the movements later are still unforeseeable.

Support: 1.3000, 1.2850

Resistance: 1.3180, 1.3260

Economic Events

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