Last Week’s Market Overview
US Dollar Index
The greenback has plummeted for five consecutive weeks, it made a 0.82% drop last week.
The downtrend was mostly caused by the risk-on sentiment as various kinds of vaccine have been rolled out, and thus the market expected the economic would recover soon.
Furthermore, there was the last FOMC meeting in 2020 on last Wednesday. The Fed remained all the monetary policies unchanged. It also extended its temporary U.S. dollar liquidity swap lines, which will in turn increase the supply of US dollar and potentially push the USD lower.
As the price broke below the important psychological support at 90, the bearish momentums may dominate the market for a period of time.
GBP performed the best among all major currencies last week. It skyrocketed to about 1.3625 which was last seen in May 2018.
BoE held the last 2020 meeting last Thursday and left policy rate and QE unchanged, which was fulfilled the market consensus, so GBP did not react much to the decisions.
The surge was mainly attributed to the optimism on Brexit deal. The market thought that the Brexit talks have moved in a more positive direction as the EU and UK finally made some progress on Level-Playing Field last week.
The last major obstacle will be issues on fishing and there are less than two weeks for both EU and UK to reach an agreement, so the news on Brexit talks will definitely be the main driver to GBP in coming week.
Market Change Last Week
Market Focus This Week
November Trade Balance Figures of Australia
Australia is going to release the November trade balance figures.
In recent months, the relationship between Australia and its largest trading partner, China was worsened. Australian beef and barley have been slapped tariffs by China. There are also restrictions on Australian lobsters, timber, red meat, sugar, cotton, and most recently coal. However, given China’s reliance on Australian seaborne iron ore, it has not yet imposed any restrictions on iron which is Australia’s biggest export.
As a result, we have to pay more attention to the Australia’s trade balance, so that we can understand more about the impact of China-Australia trade tension and have a better expectation on the outlook of Australia’s economy.
(Source: Australian Bureau of Statistics)
Bitcoin broke the historic high at about 19665.00 last week and followed by a sharp surge.
The two-line MA keeps facing upwards and expanding, signalling a continuation of uptrend. However, the RSI has already entered the overbought zone, so the price potentially makes a pullback first.
All in all, the bullish momentums remain strong and it is likely to extend its upside movements in medium term. On the other hand, the price faces some selling pressure which may be caused by profit-taking strategy in short term, but the retracement would be temporary and resisted by support around 19665.00.
Support: 19665.00, 16200.00, 13880.00
Resistance: 19700.00, 20000.00
Last week, the Australian dollar carried on with its uptrend since the early November.
The two-line MA still keeps its golden cross pattern now, but the RSI has broken below the 50-interval, indicating the weakening of bullish momentums. There are no any strong signals for reverse of the trend, but it is highly possible for AUD to have a rest or even make a small pullback in coming days.
It is currently pulling back from the high and trading slightly above 0.7570. If the pullback continues, the price may drop to 0.7350 or even lower, but it is likely to be bounded at 0.7000.
Support: 0.7510, 0.7420
Resistance: 0.7835, 0.7640, 0.8140
The oil started its strong uptrend at the beginning of November and it has closed with green candle for seven weeks.
The two-line MA continues to show a bullish sign by extending the golden cross. However, from the RSI aspect, there is a selling pressure, pulling the indicator to break below the medium level.
Therefore, the uptrend is expected to be held in medium to long term, but the price may need to experience a downside move first in the near future in order to accumulate the upward momentums again. The oil is likely to stop the pullback at 46.50, and wait for another round of upward movements.
Support: 44.00, 40.00, 34.00
Resistance: 50.00, 54.00
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