EURUSD
dollar was defending itself last week. Growth impulse after trump's rally was losing its power. The potential for dollar growth on the higher chances for the rate raising by the Fed Reserve won back (they are sure 100% about December rate increase) even with the gap, since they include 50% chances for two more raising in 2017. Meanwhile, stock markets continued to grow on the expectations of public spending increase, and did not consider the policy tightening as a threat for upwards movement. On Thursday and Friday the market gave a formal reason for dollar selling, which used dollar bears quite fast. On Thursday they reported growth of weekly unemployment claims to 268k against 233k two weeks before and 251k – one week before. Friday payrolls coincide with the forecasts of new jobs, having increased by 178k (vs expected 180k) but with the reconsidering to the decline of the previous data. Total private sector plus industrial sector partially appeared worse than expected. The drop of the average wages per hour by 0.1% vs expected increase by 0.2% was extremely disappointing. At the same time, average working week remained unchanged at 34.4 hours per week. Such levels are close to average levels of last 10 years. Such data helped EURUSD to keep one more time 1.05 as a strong support level. EURUSD finished the week at 1.0660. However, European policy may again pressure the pair as the influence of euro-sceptics will increase.
While euro was slowly saving itself, pound skyrocketed quickly. During the week news appeared that a new Government at least would attempt to keep the trading union with EU and it is ready to pay yearly fees for this. Moreover, sterling was supported by the common risks demand: sterling was gaining very well in such conditions. Finally, the pair has managed to break the resistance at 1.2500. The weak dollar on Friday helped the pound to accelerate the attack and finish week trades above 1.2700. In a short-term the pair overbought, therefore, there is quite high possibility of correction on Monday-Tuesday. But we should be ready the pair might not meet serious resistance until area 1.2900 – 1.3000.
Breathtaking November rally lost the momentum or, at least, it is making a break. The pair could not take extra 10 points to reach 115.00. Cautiousness prevailed when the pair was approaching these levels. Yen was dropping faster than other currencies, and may skyrocket faster than others if dollar develops its correction. Fibonacci theory is talking for the possible drop to 109.
It was almost impossible to believe, but OPEC has agreed to cut oil production. After the first messages about the possible deal, oil started its rally and it was not finished as the cartel press conference took place. Eventually, oil increased by 10%, having renewed yearly highs, getting close to 55 mark – the high from July 2015. Yet the best strategy appears as selling on the growth. They should wait when growth impulse starts fading and enter into selling.
