Weekly Recap 2nd – 9th December ’16

Forex markets experienced a volatile week, as the beginning of December was highlighted by the European Central Bank’s monetary meeting. The U.S. Dollar finished the week with steep gains, as the market still anticipates a rate hike by the Federal Reserve next week. The Yen continued to decline against tits major peers this week, hitting new 12-month lows yet again towards the end of the period. The Canadian Dollar managed to gain ground on the otherwise strong Dollar, despite the slight correction in the price of oil. The other commodity-related currencies were also relatively strong, while the Pound followed the common currency lower after a highly bullish period.

 

Let’s see how the most important pairs performed this week!

EUR/USD:

The week in numbers

The Euro had a volatile week as it crashed lower on Monday, drifted higher until Thursday, and finished sharply lower after a strong decline at 1.0552 with a small gain of 110 pips or -1.05%, from an opening rate of 1.0662 The cross had a wide 366-pip weekly range, with a low of 1.0504 and a weekly high of 1.0870. The pair closed the week below the 161.8% Fibonacci extension level at 1.0780.

Fundamentals 

The Euro was pushed lower by the Italian referendum on Monday morning, but it recovered strongly before the ECB meeting on Thursday. The surprising and mixed ECB statement caused an initial spike in the common currency, but that quickly reversed and the pair headed back towards 1.05 towards the end of the period. With no major releases coming out this week, the Euro mostly traded on central bank related speculation before next week’s crucial Fed meeting.

Technical picture

The Euro trades in short-term consolidation above the long-term lows near the 1.0475 support level, following the highly volatile week. Strong resistance is still found at 1.0850, near 1.10 and above that at 1.1185, while support is at the current level near 1.0550 and around 1.0475. The MACD and the short-term Stochastic are both oversold going into the weekend.

Trading Range: 1.1000 – 1.0475

eurusdh1_12_10

Weekly Support & Resistance Levels

R3: 1.1245

R2: 1.0969

R1: 1.0790

Pivot Point: 1.0693

S1: 1.0514

S2: 1.0416

S3: 1.0140

GBP/USD:

The week in numbers

The Pound drifted lower from its weekly highs that it hit on Tuesday, to correct back below Mondays opening price and finish at 1.2574 for a loss of 163 pips or -1.31%, from an opening price of 1.2731. Cable had a wide weekly range of 228 pips with a low of 1.2543 and a high of 1.2771. GBP/USD closed the week well below the 261.8% Fibonacci extension level at 1.2785 on Friday.

Fundamentals

The Pound lost some of its relative strength this week, as the first signs of economic weakness popped up since the Brexit vote. The negative surprise in Industrial Production and Manufacturing caused a sharp drop, and the broad Dollar rally also hurt the pair. The better than expected U.S. economic numbers pushed the Greenback higher, as rate hike odds remained elevated before Wednesday’s crucial event.

Technical picture

The pair drifted out of its short-term uptrend, as it traded in a flag consolidation pattern in the second half of the week, with the long-term picture remaining Crucial support is still found at 1.25 and below that at 1.2350 with strong resistance near 1.2750 and at 1.2850. The MACD is neutral while the short-term Stochastic is oversold going into the weekend.

Trading Range: 1.2900 – 1.1900

 gbpusdh1_12_10

Daily Support & Resistance Levels

R3: 1.2922

R2: 1.2767

R1: 1.2675

Pivot Point: 1.2611

S1: 1.2519

S2: 1.2455

S3: 1.2300

USD/JPY:

The day in numbers

The pair surged to new rally highs after a choppy week on Friday, finishing above the 115 level for the first time in 11 months at 115.23 with a gain of 160 pips or 1.36% after opening at 113.63. The cross hit a weekly high of 115.32 and a low of 112.83 for a weekly range of 249 pips. The cross closed the week well above the full Fibonacci retracement level at 105.50 again on Friday.

Fundamentals 

The Yen continued its losing streak against the Dollar, despite a relatively long consolidation, as it remained among the weakest majors this week. The currency was helped on Monday by the fears concerning the Italian vote, but the pair failed to stay below the 113 level sustainably. The Federal Reserve’s meeting could cause volatility next week, as the Bank of Japan is still not considering tightening its monetary position while the Fed is expected to start a rate hike cycle next week.

Technical picture

The pair dipped below short-term support before advancing above the 115 resistance towards the end of the period, starting a new leg up in the dominant steep uptrend. Support is now found near the 113.50 level, at 110.50, and at 108.50. Resistance now lies ahead around 115.50, and above that near 116.50.The MACD and the short-term Stochastic are both overbought going into the weekend.

Trading Range: 115.50 – 105.50

   usdjpyh1_12_10

Weekly Support & Resistance Levels

R3: 116.33

R2: 115.08

R1: 114.55

Pivot Point: 113.83

S1: 113.29

S2: 112.58

S3: 111.33

AUD/USD:

The week in numbers

The Aussie had another choppy and flat week, as it continued to trade in a narrow range and finished right at the opening rate at 0.7447, for a small gain of 2 pips or 0.03% after opening at 0.7445. The pair had a narrow weekly trading range of 89 pips with a high of 0.7507 and a low of 0.7418. The cross finished the week just below the 38.2% Fibonacci support level at 0.7452 on Friday.

Fundamentals 

The Aussie had a relatively strong week as the rally in the price of oil outweighed the slightly dovish RBA statement and the overwhelmingly bullish U.S. releases. The U.S UOM Consumer Sentiment Index and the ISM Non-Manufacturing Index both beat the consensus estimate, reinforcing rate hike expectations before the key Fed meeting next week. The RBA held its benchmark rate unchanged, while the Australian GDP growth came in at -0.5%, well below expectations.

Technical picture

The pair is still trading in a neutral long-term trading range, and now also within a short-term consolidation pattern below the key 0.75 resistance. Crucial support is still found near 0.7400, at 0.7350 and around the 0.7250 level. Strong resistance is now ahead near the current rate at near 0.7450, and above that at 0.7500. The MACD is neutral while the short-term Stochastic is oversold going into the weekend.

Trading Range: 0.7750 – 0.7150

 audusdh1_12_10

Weekly Support & Resistance Levels

R3: 0.7625

R2: 0.7545

R1: 0.7504

Pivot Point: 0.7465

S1: 0.7424

S2: 0.7386

S3: 0.7307

USD/CAD:

The week in numbers

The pair trended lower throughout the week, and finished near the weekly lows with a closing price of 1.3178, for a loss of 110 pips or -0.78%, from an opening price of 1.3288. The cross traded in a wide 288-pip range with a weekly high of 1.3538 and a low of 1.3250. The pair finished the week right at the full retracement level at 1.3185 on Friday.

Fundamentals 

The Canadian Dollar was still supported by the sharp rise in the price of oil after the historical OPEC deal regarding a production cut two weeks ago. The better than expected Canadian Trade Balance data and the slightly more hawkish Bank of Canada statement also pushed the Loonie higher, despite the continued weakness in precious metals. The BOC held its benchmark rate unchanged at the record low of 0.5% before the FOMC meeting.

Technical picture

The pair is now trading within the previous long-standing neutral trading range again after a failed rally above the 1.35 resistance. Crucial support is now found near the current rate at the 1.3185 level and around 1.3015. Strong resistance is ahead at 1.3385, at 1.3450, and near 1.3550. The MACD is oversold while the short-term Stochastic is neutral going into the weekend.

Trading Range: 1.3750 – 1.3015

 usdcadh1_12_10

Weekly Support & Resistance Levels

R3: 1.3339

R2: 1.3273

R1: 1.3231

Pivot Point: 1.3207

S1: 1.3165

S2: 1.3141

S3: 1.3075

Economic Data Release

Note: All times are in GMT.

   

 

 

Date

Currency

Event

Time

11-Dec Sun

JPY

Domestic Corporate Goods Price Index (MoM)

23:50

 

JPY

Machine Orders (MoM)

23:50

 

JPY

Domestic Corporate Goods Price Index (YoY)

23:50

 

AUD

Credit Card Purchases

00:30

 

JPY

Tertiary Industry Index (MoM)

04:30

12-Dec Mon

JPY

Machine Tool Orders (YoY)

06:00

 

AUD

Australia Manpower Survey

13:01

 

GBP

Bank of England Bond Buying Operation

14:50

 

USD

Monthly Budget Statement

19:00

 

AUD

ANZ Roy Morgan Weekly Consumer Confidence Index

22:30

 

EUR

German Wholesale Price Index (MoM)

 

 

EUR

Germany First Quarter Manpower Employment Outlook

00:01

 

JPY

Japan Manpower Survey

00:01

 

AUD

House Price Index (YoY)

00:30

 

AUD

NAB Business Confidence

00:30

13-Dec Tue

EUR

German Consumer Price Index (YoY)

07:00

 

GBP

Consumer Price Index (YoY)

09:30

 

GBP

Retail Price Index (MoM)

09:30

 

GBP

Core Consumer Price Index (YoY)

09:30

 

GBP

House Price Index (YoY)

09:30

 

EUR

Euro-Zone Employment (QoQ)

10:00

 

EUR

Euro-Zone ZEW Survey (Economic Sentiment)

10:00

 

USD

NFIB Small Business Optimism

11:00

 

USD

Import Price Index (MoM)

13:30

 

AUD

Westpac Consumer Confidence

23:30

 

JPY

Tankan Small Non-Mfg Index

23:50

 

JPY

Tankan Large Manufacturers Index

23:50

 

JPY

Tankan Non-Manufacturing Index

23:50

 

AUD

New Motor Vehicle Sales (YoY)

00:30

 

JPY

Tokyo Condominium Sales (YoY)

04:00

 

JPY

Industrial Production (MoM)

04:30

 

JPY

Capacity Utilization (MoM)

04:30

14-Dec Wed

 

 

 

 

GBP

Employment Change (3M/3M)

09:30

 

GBP

Claimant Count Rate

09:30

 

GBP

Jobless Claims Change

09:30

 

GBP

Average Weekly Earnings (3M/YoY)

09:30

 

GBP

ILO Unemployment Rate (3M)

09:30

 

EUR

Euro-Zone Industrial Production s.a. (MoM)

10:00

 

USD

MBA Mortgage Applications

12:00

 

USD

PPI

13:30

 

USD

Advance Retail Sales

13:30

 

CAD

Teranet/National Bank HP Index

13:30

 

USD

Capacity Utilization

14:15

 

USD

Industrial Production

14:15

 

USD

Manufacturing (SIC) Production

14:15

 

USD

Business Inventories

15:00

 

USD

DOE U.S. Crude Oil Inventories

15:30

 

USD

Federal Open Market Committee Rate Decision

19:00

 

USD

FOMC Rate Decision (Lower Bound)

19:00

 

USD

Fed Summary of Economic Projections

19:00

 

AUD

Consumer Inflation Expectation

00:00

 

AUD

Participation Rate

00:30

 

JPY

Nikkei Japan PMI Mfg

00:30

 

AUD

RBA FX Transactions

00:30

 

AUD

Employment Change

00:30

 

AUD

Unemployment Rate

00:30

15-Dec Thu

JPY

Machine Tool Orders (YoY)

06:00

 

EUR

EU 25 New Car Registrations

07:00

 

EUR

Markit France Manufacturing PMI

08:00

 

EUR

Markit France Services PMI

08:00

 

EUR

Markit France Composite PMI

08:00

 

EUR

Markit/BME Germany Manufacturing PMI

08:30

 

EUR

Markit Germany Services PMI

08:30

 

EUR

Markit/BME Germany Composite PMI

08:30

 

EUR

MarkitEurozone Manufacturing PMI

09:00

 

EUR

MarkitEurozone Services PMI

09:00

 

EUR

MarkitEurozone Composite PMI

09:00

 

GBP

Retail Sales (YoY)

09:30

 

GBP

Bank of England Rate Decision

12:00

 

GBP

BOE Asset Purchase Target

12:00

 

CAD

Manufacturing Shipments (MoM)

13:30

 

USD

Consumer Price Index n.s.a.

13:30

 

USD

Philadelphia Fed.

13:30

 

USD

Current Account Balance

13:30

 

USD

Empire Manufacturing

13:30

 

USD

Consumer Price Index (YoY)

13:30

 

USD

Real Avg Weekly Earnings (YoY)

13:30

 

USD

Initial Jobless Claims

13:30

 

CAD

Existing Home Sales (MoM)

14:00

 

USD

Markit US Manufacturing PMI

14:45

 

USD

NAHB Housing Market Index

15:00

 

CAD

BOC releases Financial System Review, Poloz press conference

15:30

16-Dec Fri

EUR

Euro-Zone Consumer Price Index (MoM)

10:00

 

EUR

Euro-Zone Trade Balance (euros)

10:00

 

EUR

Euro-Zone Labor Costs (YoY)

10:00

 

GBP

CBI Trends Total Orders

11:00

 

CAD

International Securities Transactions (Canadian dollar)

13:30

 

USD

Housing Starts

13:30

 

USD

Building Permits (MoM)

13:30

 

USD

Fed’s Lacker speaks

17:30

 

USD

Baker Hughes U.S. Rig Count

18:00