weekly-market-report-analysis

A strong end to the week for the US dollar materialized as the currency climbed 0.73% vs. its major peers.

Strength was partly due to turmoil elsewhere, though hotter-than-expected US PPI numbers and relatively optimistic US retail sales data helped the greenback maintain an upside presence.

This comes just ahead of December’s FOMC meeting this week, widely expected to deliver a final and 4th 25 bp hike in 2018 before possibly signalling a pause.

From a technical perspective, the week concluded forming a bullish engulfing weekly candle, which could, according to the US dollar index, be enough to generate additional buying this week, with an overall target set at monthly resistance drawn from 99.62.

Meanwhile in other currencies:

  • The euro concluded the week in negative terrain vs. its US counterpart, down 0.77%. The shared currency pressed lower following Thursday’s ECB’s monetary policy meeting. As expected, the ECB stood pat on rates and confirmed the conclusion of QE whilst maintaining their guidance on rates. Further downside was observed Friday amid dismal Eurozone PMI readings and broad-based USD buying. Technically speaking, the EUR/USD could explore lower ground this week. According to both weekly and daily timeframes, support is not expected to emerge until reaching daily demand at 1.1171-1.1220.
  • Brexit concerns reached new highs last week. UK PM May pulled the meaningful vote at the last minute Tuesday on the likelihood Parliament would reject the draft withdrawal agreement. Further drama unfolded as MPs sent 48 letters for a non-confidence vote.

May, however, survived a no confidence motion against her leadership Wednesday, winning the vote by 200 – 117.

Despite this, the future of Brexit remains precarious as both the EU and UK are far from agreement.

Sterling concluded the week down 0.95%, recording its sixth consecutive losing week.

The GBP/USD’s technical picture is mixed at the moment.

Weekly price is seen testing demand at 1.2365-1.2615, while daily price turned lower just south of resistance at 1.2697.

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