Weekly Recap 9th – 16th December

Forex markets had another volatile week, as the second week of December was highlighted by the Federal Reserve’s scheduled monetary meeting. The most important central bank raised its benchmark rate to 0.5% on Thursday, following the slight hawkish change in the European Central Bank’s policy. The Dollar continued its march higher after the decision, hitting new long-term highs against the Euro and the Yen. The Great British Pound remained relatively strong, despite falling sharply after the Fed meeting. Precious metals suffered significant losses, while oil also drifted lower after a strong start to the week. Commodity currencies finished the period with steep losses, as the Canadian Dollar, the Aussie, and the New Zealand Dollar all lost ground compared to the Greenback.

 

Let’s see how the most important pairsperformed thisweek!

EUR/USD:

The week in numbers

The Euro had a bearish week as it crashed lower on followingthe Fed decision and finished with steep losses at 1.0430with alossof 127pips or 1.17%, from an opening rate of 1.0557 The cross had a wide304-pip weekly range, with a low of 1.0366 and a weekly high of 1.0670. The pair closed the week below the 161.8% Fibonacci extension level at 1.0780.

Fundamentals 

The Euro faced mixed economic releases this week, with the Manufacturing and Services PMIs coming out in a wide range around the consensus estimates, and the CPI indices also showing significant differences. The common currency finished sharply off its weekly highs following the hawkish surprise by the Federal Reserve, hitting a 13-year low below the 1.04 level against the U.S. Dollar. The better than expected U.S. releases also pushed the pair lower, although the bearish housing data caused a connection on Friday.

Technical picture

The Eurocrashed belowa short-term consolidation to new long-term lows violating the1.0475 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 1.0575-1.0580 and at 1.0250. The MACD and the short-term Stochastic are both neutral going into the weekend.

Trading Range: 1.1000 – 1.0250

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 in Tuesday, to correct back below Mondays opening price and finish at 1.2574for aloss 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 weekwell below the 261.8% Fibonacci extension levelat 1.2785 on Friday.

Fundamentals

The Pound turned lower in the second half of the week following the Fed meeting, as the Bank of England’s interest rate decision was in line with expectations. The slightly dovish statement also weighed on Cable towards the end of the period, as the pair fell below the important psychological level of 1.25. TheBritish Employment Report and the CPI index were both better than expected, while Retail Sales were in line with expectations in November. The cross is still stronger than some of the other majors, as the Pound is among the best performers since the victory of Donald Trump.

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 oversoldgoing into the weekend.

Trading Range: 1.2900 – 1.1900

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 volatile week on Friday, finishing above the 117.50 level on a new 12-month high at 117.96with a largegain of 273 pips or 2.54% after opening at 115.23. The cross hit a weekly high of 118.66 and a low of 115.40 for a wideweekly range of 326pips. The cross closed the week well above the full Fibonacci retracement level at 105.50 again on Friday.

Fundamentals 

The Yen continued to trend lower against its major peers, and hit new 12-month lows compared to the Greenback above 118. The slightly better than expected Japanese economic releases were not enough to change the underlying bearish trend in the currency, as central bank policies remain in the focus of investors. The Bank of Japan will hold its monetary meeting next week, and it will be interesting to see whether the bank will stick to its dovish stance amid the tightening environment or not. The pair might hit 120 on a dovish statement next week.

Technical picture

The pair consolidated below the 115.50 level before surging higher to new rally highs and finishing close to theweekly highs below the crucial 120 level, still within a steep uptrend.Support is now found near the 117.50 level, at 115.50, and at 113.50. Resistance now lies ahead around 118.50, and above that near 120.00.The MACD and the short-term Stochastic are bothneutralgoing into the weekend.

Trading Range: 120.00 – 115.50

   

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 trended lower after Wednesday’ssession and finished with steep losses at 0.7294, for a large loss of 154 pips or 2.23% after opening at 0.7447. The pairhad a wide weekly trading range of 259 pips with a high of 0.7525 and a low of 0.7266. The cross finished the week wellbelow the 50% Fibonacci support level at 0.7335on Friday.

Fundamentals 

The Aussie had a bearish end to the week as the rate hike by the Fed and the decline in preciousmetals weighed heavily on the currency. The mixed Employment Report left the Australian Dollar unchanged, and the regional assets experienced strong selling on Friday despite the rebound in the price of oil, on somenegative news regarding China. The Aussie fell below key support level this week and it could remain under pressure if the rally in oil stalls.

Technical picture

The paircrashed below the eutral long-term trading range on Friday, as it probably entered into a deeper correction, following the topping formation. Crucial support is now found near 0.7300, at 0.7250 and around the 0.7150 level. Strong resistance is now ahead near the current rate at near 0.7350, and above that at 0.7500. The MACD is neutral while the short-term Stochastic is oversoldgoing into the weekend.

Trading Range: 0.7750 – 0.7150

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 pairjumped higher in the second half of theweek, after drifting lower on the first two days, and closed the week at1.3347, for a lossof169 pips or 1.68%, from an opening price of 1.3178. The cross traded in a wide 391-pip range with a weekly high of 1.3471 and a low of 1.3080. The pair finished the week back above the full retracement level at 1.3185 on Friday.

Fundamentals 

The Canadian Dollar had a bearish week following the Federal Reserve meeting, despite the favorable trend in the price of oil. The pair is still relatively strong compared to the other majors, despite the recent move. Economic releases was mostly in line with expectations this week in Canada, while the U.S. numbers were slightly bullish, putting more upside pressure on the pair. All eyes are still on the price of oil as the Loonie remains closely correlated with the crucial commodity.

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 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 neutralgoing into the weekend.

Trading Range: 1.3750 – 1.3015

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

Markit Eurozone Manufacturing PMI

09:00

 

EUR

Markit Eurozone Services PMI

09:00

 

EUR

Markit Eurozone 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