iFOREX Daily Analysis : November 24,2017
iFOREX | Nov 24, 2017 05:30AM ET
The US Dollar lost slightly against other major currencies with the US Dollar Index (USDX) losing 0.11% in shortened trading due to the Thanksgiving holiday. While most emerging market currencies traded higher compared to the Dollar, the South African Rand (ZAR) lost some of its previous day’s gains ahead of the rating decision by S&P and Moody’s due on Friday. The rating agencies will determine their sovereign rating of South Africa and could downgrade its bonds to “junk” level – however according to a Bloomberg survey traders are not sure whether this would indeed happen.
Gold traded flat in a slow Thanksgiving trading session. Oil gained again and reached a new 2.5 years high. The agenda for the OPEC meeting on Thursday next week indicates a meeting of only 3 hours, which some see as a sign that a decision on production cuts could be reached quickly there.
US equity indices traded mixed. Euro zone indices closed higher on positive PMI data from the European Union and Germany.
Bitcoin traded within the same range as the previous days. Ethereum which is the second largest cryptocurrency after Bitcoin in market capitalization breached the level of $400 and reached a new all-time high as hedge fund manager Mike Novogratz changed his prediction on the future Ethereum price to bullish.
On Friday the influential German IFO economic institute will publish its economic conditions and sentiment surveys. The British Bankers Association (BBA) will publish mortgage approvals statistics.
EUR/USD
The EUR/USD traded higher on Thursday for the third day in a row as German and European Union PMI figures were better than expected. Minutes published from the last meeting of the European Central Bank (ECB) gave further upside momentum as policymakers are in consensus of extending the bank’s asset purchase scheme while being undecided on a the future of the bond buying program. The United States celebrate Thanksgiving this extended weekend, which is why we see few impulses from there.
On Friday the influential German IFO economic institute will publish its economic conditions and sentiment surveys.
Pivot: 1.1805
Support: 1.1805 1.1785 1.1755
Resistance: 1.186 1.188 1.191
Scenario 1: long positions above 1.1805 with targets at 1.1860 & 1.1880 in extension.
Scenario 2: below 1.1805 look for further downside with 1.1785 & 1.1755 as targets.
Comment: the RSI is mixed to bullish.
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Gold
Gold traded unchanged in Thursday’s shorter trading session as the Thanksgiving holiday helped to hold the Dollar mostly steady and little new relevant fundamental US data was published. Gold traders will continue to be on the outlook for the political situation in the US and globally. It remains to be seen how much insecurity the Muller probe into the alleged collusion of people close to Trump with Russia bring to the markets.
Pivot: 1284
Support: 1284 1279 1276
Resistance: 1297 1300 1303.5
Scenario 1: long positions above 1284.00 with targets at 1297.00 & 1300.00 in extension.
Scenario 2: below 1284.00 look for further downside with 1279.00 & 1276.00 as targets.
Comment: the RSI is mixed to bullish.
WTI Oil
Oil reached again a new 2.5 years high on Thursday one week ahead of the much anticipated meeting of OPEC, where oil producing countries are supposed to decide whether to extend production cuts beyond March 2018. A draft agenda of the meeting was seen scheduling the meeting for just three hours, raising hopes that participants expect a swift decision. Russia, which is a key participant in the talks is yet to publicly commit to agree on cuts at that meeting, leaving its decision open until later. Some analysts are worried what effect US shale oil could have on a possible agreement. US shale oil can be produced at high quantities but it is only viable to produce at higher oil prices which oil producers want to achieve by production cuts.
Pivot: 57.8
Support: 57.8 57.5 57.15
Resistance: 58.6 59 59.4
Scenario 1: long positions above 57.80 with targets at 58.60 & 59.00 in extension.
Scenario 2: below 57.80 look for further downside with 57.50 & 57.15 as targets.
Comment: the RSI is bullish and calls for further upside.
Bitcoin
Bitcoin traded mostly within its range it stayed since Monday clearly over $8,000 but not reaching its high at over $8,300. Deutsche Bank (DE:DBKGn) Strategist Ulrich Stephan criticized the “hype” surrounding Bitcoin. German central bank’s (Bundesbank) board member Carl-Ludwig Thiele added that in his opinion the Bitcoin is not a currency but only used to speculate. While Bitcoin remained stable, its two forks Bitcoin Cash and Bitcoin Gold gained almost 20%. One of the key issues with Bitcoin are its high transaction costs which according to bitinfocharts.com are on average at around $6.7 per transaction (Bitcoin Cash ca. $0.6).
Pivot: 8362.49
Support: 7604.54 7432.27 7260
Resistance: 8362.49 8652.38 8824.94
Scenario 1: the downside prevails as long as 8362.49 is resistance.
Scenario 2: the upside breakout of 8362.49, would call for 8652.38 and 8824.94.
Comment: the RSI is below 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the pair is trading under both its 20 and 50 MAs (respectively at 8190.90 and 8204.32).
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