Last Week’s Market Overview

NZD

NZD
NZD

NZD has become the best performer among all the major currencies, making a 1.26% surge last week and its strong bullish sentiment was mainly caused by two factors.

The first one is the progress on COVID-19 vaccines. The vaccines developed by Pfizer and Moderna are both around 95% effective in late-stage clinical trials, the market thus expected the immunizations that starts in the near future will end the pandemics.

The second factor is signing of free trade agreement RCEP between the Asia-Pacific nations. RCEP provides a common set of trade rules across the region and will benefit the exporters the most. MFAT estimates that there will be a 0.3% to 0.6% increase in New Zealand’s annual GDP due to RCEP.

All in all, the NZD kept rising for the whole week and made a new high for year 2020.

USD Index

USD Index
USD Index

USD continued to perform weak and was facing obstacles on recovering the economy as the infection cases reached a record high in November. Many states, such as Michigan, Washington, and California had to implement new lockdown measures. Meanwhile, the White House and the congress failed to bridge the gap on stimulus package. Therefore, the market was worried about the current slowly recovering economy would be hampered, leading to continued depreciation of USD.

Furthermore, according to the SWIFT, the Euro dollar surpassed US dollar and became the most used and prevalent currency for global payments in October. It signals that the market became less confident on USD after the pandemic-induced recession and it might also keep weakening in longer term.

Market Change Last Week

Market Change Last Week
Market Change Last Week

Market Focus This Week

PMI Release (Eurozone and UK)

After a great expansion in the third quarter, the situation of the fourth quarter reversed attribute to the resurgence of pandemic, leading to a highly uncertain outlook for both UK and the economies in Eurozone for the remainder of the year.

PMI is considered as a leading economic indicator showing the health of an economy. Since most lockdown measures started in the early November, it is the first indicator enables the market to have a deeper understanding on the adverse effects of lockdown measures, and therefore making a better anticipation on the coming economic performance.

Euro Zone PMI
Euro Zone PMI

(Source: Markit)

UK PMI
UK PMI

(Source: Markit)

Technical Analysis

USD Index (H2)

USD Index H
USD Index H

The USD Index experienced a pullback last week and wiped out the rally half month before, returning to almost the lowest point in early November.

The price action is now getting choppy, so the MA lines swing back and forth and it hints the loss of bearish momentums. Moreover, the RSI is slightly above the 40-mark and the price is highly possible to find a support at 92.15. Based on the technical analysis, it seems very difficult for the bearish momentums to resume. We may observe a rally on the USD Index after the downtrend is resisted by a strong support at either 92.15 or 91.75.

Support: 92.15, 91.75

Resistance: 93.20, 94.20, 94.75

XAUUSD (H3)

XAUUSD H
XAUUSD H

The price of yellow metal dropped at the beginning of previous week, but retraced on both Thursday and Friday after touching the support near 1850.

Both golden cross of two-line MA indicates the reverse of the trend. Moreover, RSI is standing above 50-interval, signalling the bullish momentums are accumulating. The price would be pushed higher, so the possibility of another visit of 1900 is quite high.

Even though the bullish momentums accumulated are not strong enough, it is highly possible for the gold price to maintain above 1850 as the level has been tested for several time and is extremely difficult to breakout.

Support: 1853.00, 1815.50

Resistance: 1900.00, 1932.00

USDJPY (H4)

USDJPY H
USDJPY H

Japanese Yen has posted a big surge against the U.S. dollar for almost two weeks. The USDJPY pair is currently trading at 103.775.

Both two-line MA and RSI show a continuation of the downtrend on the pair. The breakout at strong support level 104.00 also indicates the downside momentums remain robust. The pair is very likely to go further south and test the another support level at 103.177 in the coming week.

Support: 103.20, 102.00

Resistance: 105.65, 106.10

Economic Events

Economic Events
Economic Events

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