USD Has Found Itself Among Outsiders

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

There are a lot of factors weighing on the US dollar as of late. EURUSD skyrocketed towards the highs it reached on November 20th, as the currency market was overwhelmed by another wave of “escaping-from-the American-currency” investors.

It wouldn’t be right to say that there was one particular factor that made USD fall. The major dollar-based currency pairs is being currently driven by several catalysts, which are forcing it to move towards local highs. Apart from other things, we’re talking about the numbers on the US Labor market published last Friday. As usual, investors were focused on some of them, for example, the Non-Farm Employment Change, which was 155K in November. However, in the previous month, the indicator was 237K, while market expectations for this one were 198K.

Still, the Unemployment Rate in the US remained unchanged at 3.7%. The Average Hourly Earnings added just 0.2% m/m, which is less than expected. However, on YoY, the indicator expanded by 3.1% and that’s a pretty solid number.

The truce in the American-Chinese “trade war”, even considering the arrest of Huawei Technologies’ top manager, makes investors’ demand for USD as a “safe haven” decrease.

There won’t be a lot of numbers from the US this week. The ones worth paying attention to are the Consumer Price Index and Retail Sales to be published on Wednesday and Friday, respectively. On Thursday, December 13th, the European Central Bank is scheduled to have another meeting, the last one in 2018, where the regulator will decide on its interest rate and further monetary policy.

In case of EURUSD, the uptrend is still dominating; this ascending movement may be considered as a correction of the previous long-term downtrend. As we can see in the H1 chart, the pair is getting closer to the upside border of the internal mid-term rising channel, which is the resistance level at 1.1455. If the price breaks it, the instrument may continue growing to reach the key mid-term correctional target at 1.1545. However, one shouldn’t disregard another scenario implying a new decline, which may start if the pair rebounds from the above-mentioned resistance level. To confirm this decline, the price has to break the local support at 1.1405. In this case, the downside target will be close to the support line at 1.1340.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Having majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.