Thread: Daily Market Analysis from ForexMart

EUR/USD. November 6, 2020 – Euro confidently moves towards 1.19

EUR/USD maintains its upward momentum, approaching the 1.1850 level. Markets continue to monitor the US presidential elections, and the vote count is still in progress. So far, 264 electors have voted for Joe Biden, while 214 have voted for Donald Trump.

Biden's headquarters have already announced their victory, but Trump considers himself «the winner by legal vote» and is demanding a recount in some states. Market participants expect that if Joe Biden wins, the Democrats will quickly approve a package of fiscal stimulus measures, which supports risky assets today.

During the day, you should pay attention to the publication of the US Department of Labor report on the state of the labor market. The unemployment rate may fall from 7.9% to 7.7%. In addition, another 510 thousand new jobs can be created. If the data is confirmed, the dollar will receive some support.

EUR/USD. November 9, 2020 – Euro consolidates near the level of 1.19

The euro continues to strengthen against the dollar, close to the 1.1900 level. The US presidential election was won by Democratic representative Joe Biden, which put strong pressure on the dollar. The reason is that investors now expect more stimulus for the US economy, despite continuing divisions in Congress.

Last Friday, the United States presented a block of interesting economic statistics that went unnoticed amid the elections. In particular, the unemployment rate in the country in October fell to 6.9% against the forecast of 7.7%. The number of jobs outside the agricultural sector increased by 638 thousand, while an increase of only 600 thousand was expected.

The only thing that turned out to be worse than expected was the increase in wages. The indicator on the average hourly wages in October increased by only 0.1% against the expectation of growth by 0.2%. In general, we can say that the US labor market still maintains a positive momentum.

The current quote for the EUR/USD pair is 1.1870. The RSI indicator moves horizontally, which signals the formation of a flat below the level of 1.19.

Brent. November 10, 2020 – Oil shows strong upward momentum

On Tuesday, Brent crude oil continues to rise, following the dynamics of yesterday. The current quotation of the asset is $42.88 per barrel. Experts note that such an upward trend has become the best over the past 6 months.

The growth driver was the news from the pharmaceutical company Pfizer that the vaccine it has developed is capable of protecting in 90% of cases of COVID-19 infection. The company said that they plan to obtain permission to sell the new drug by the end of November.

A cure for the coronavirus could significantly revive and revitalize the tourism industry, which has driven oil prices up.

Additional support for Brent was provided by the comments of the Minister of Energy of Saudi Arabia on the readiness of OPEC + to postpone the decision to revise the restrictions on oil production. According to the latest data, the total production of OPEC + countries in October increased by 210 thousand barrels per day and reached 32.27 million barrels per day. The increase in oil production was mainly due to the restoration of work in the fields of Libya.

EUR/USD. November 10, 2020 – Euro declines after yesterday's highs

The EUR/USD pair is showing a correctional decline today after yesterday's rise to 1.1920. The current quote is 1.1775. Yesterday was full of news that contributed to increased volatility.

First, Joe Biden's victory in the US presidential election offers hopes for improving and strengthening America's international relations. However, buyers began to fix longs on the announcement by the head of the US General Services Administration of the refusal to recognize Joe Biden's victory, which increased political uncertainty in the country.

On the other hand, investors were optimistic about news from pharmaceutical company Pfizer about the success of a new vaccine capable of preventing 90% of coronavirus infections.

At the same time, the European currency was under pressure from the previously published statistics from the eurozone. Sentix investor confidence index for November deteriorated to -10.0 points against the previous value of -8.3. The data, however, turned out to be better than expected, implying a decline to -15.0 points. Additional negativity was brought by the news that the EU decided to impose reciprocal customs duties on US goods in the amount of $ 4 billion.

Today during the day the pair will adhere to the flat dynamics in the 1.1800 area.

EUR/USD. November 11, 2020 – Euro continues to weaken against the dollar

On Wednesday, the EUR/USD pair fluctuates weakly on both sides of the 1.1800 level, while the downward trend remains. Weak economic statistics from Germany put pressure on the euro: the ZEW economic sentiment index fell to 39.0 points, which was the lowest level since April this year. An additional negative is the worsening of the epidemiological situation in Europe.

At the same time, participants in the foreign exchange market are concerned about Donald Trump's attempts to annul the voting results in Michigan and Pennsylvania. And his further efforts in this direction will only increase the uncertainty in the United States and suppress the demand for risky assets.

Thus, the euro will continue to decline during the day, responding to the negative external background. The economic calendar is empty today, in the United States it is a day off in honor of the Veterans Day. Only in the evening will the speech of the head of the ECB Christine Lagarde be of interest.

GBP/USD. November 12, 2020 – Pound falls on weak economic data

On Thursday, the GBP/USD pair continues to decline, following the dynamics of yesterday. The current quote for the asset is 1.3145.

Uncertainty around Brexit continues to exert pressure on the pound sterling. Under current agreements, the UK and the EU must agree on an initial draft of the deal by November 19. The final agreement of the contract should take place before the end of December 2020.

Despite the ongoing negotiations, there is still no draft agreement, so the risks of a «hard» Brexit (without a deal) are growing every day. In this case, Britain will leave the single market and common customs space.

A large block of statistics from the UK was published today, which also put pressure on the British currency rate, as all data turned out to be worse than forecasted.

GDP in the III quarter increased by 15.5% in comparison with the previous quarter, which turned out to be worse than the forecast. Experts had expected growth to 15.8%. However, this growth has been a record since 1955. Industrial production data for September showed an increase of 0.5%, while experts had expected an increase of 0.8%. Manufacturing production rose 0.2% in September after rising 0.7% in August.

GBP/USD. November 16, 2020 – Pound shows high volatility in Brexit negotiations

The new week started with a weakening of the pound sterling to 1.3160 ​​from 1.3240. The British currency is under pressure from news on Brexit and trade negotiations between London and Brussels.

A spokesman for British Prime Minister Boris Johnson said on Friday that previous differences over equal terms of trade and fisheries remain in trade negotiations with the European Union. The politician noted that negotiations will resume this week. There is about a month and a half left until the end of the transition period, and the peak of tension in the negotiations will probably be in December.

Today the macroeconomic calendar is empty. Attention may be drawn to the speech of the representative of the Bank of England J. Haskell.

Brent. November 17, 2020 – Oil holds in September highs

Yesterday, Brent quotes managed to reach the level of $44.60 per barrel, which was the highest since mid-September. The current quotation of the asset is $43.77. Prices are being supported by improved market sentiment amid reports of a new coronavirus vaccine. It became known that Moderna achieved 94.5% efficiency in trials of its drug from Covid, which strengthened investors' hopes for a global economic recovery, as well as demand for hydrocarbons.

Additional support for Brent was provided by macroeconomic data from China: industrial production in October increased by 6.9% compared to the same period last year. Retail sales added 4.3% compared to October 2019.

OPEC+ plans to refrain from increasing production until the oil market returns to balance are also a factor in the growth of oil prices. On the eve of the OPEC+ Joint Technical Committee announced plans to extend the current restrictions on production for another three months.

However, the risks for the oil market are still high. The rate of spread of coronavirus infection around the world continues to grow, and the likelihood of new lockdowns remains. Which, in turn, cloud the prospects for global economic growth.

Brent. November 18, 2020 – Oil in positive territory despite negative external background

Brent oil quotes continue to rise. Current price is $44.20 per barrel. «Bulls» were not stopped even by data from the American Petroleum Institute (API), according to which oil reserves in the United States rose by 4.2 million barrels over the week. Today you should pay attention to a similar report from the US Department of Energy.

Yesterday, a meeting of the OPEC+ ministerial monitoring committee was held, which ended without recommendations for a production cut in 2021. Previously, market participants expected the committee to propose OPEC+ countries to extend the current level of production cuts until the end of the first quarter of 2021. The next meeting of the organization will take place only on December 16-17.

The worsening epidemiological situation in the world can also change the current trend to a downward one. The high rates of spread of infection are forcing countries to introduce new social restrictions and quarantines, which, in turn, will inevitably lead to a decrease in economic activity and demand for hydrocarbons.

EUR/USD. November 18, 2020 – Euro weakly hovers below 1.19 level

The EUR/USD pair continues to feel confident and is approaching the 1.1900 level. The current quote is 1.1880.

The dollar is still under pressure from the likelihood of a new stimulus to the US economy. Earlier it became known that the Republicans have finally approved a new stimulus package, but now they are talking about an amount of$ 500 billion, although the volume of $1-1.5 trillion was previously discussed. Another uncertainty over the stimulus issue alarmed the markets again.

However, the data from the US released yesterday provided some support to the dollar rate today. Industrial production in the country rose 1.1% m/m in October against the forecast of 1.0% m/m increase. In annual terms, the indicator slightly improved and amounted to -5.3% (-6.7% previously). Capacity utilization in October was at 72.8%, higher than the expected 72.3%.

Thus, today the pair will fluctuate below the level of 1.19 in an attempt to determine the further direction of movement. The released data on inflation in the eurozone did not have a visible effect on the dynamics of the pair, since the indicator remained at the level of -0.3%, as expected.

EUR/USD. November 19, 2020 – Euro shows decline

At the end of yesterday's session, the EUR/USD pair weakened to the level of 1.1810. The current quote for the pair is 1.1835.

The drivers of the decline were the correction of stock indices and gold, which fell in price after the news from Pfizer. The pharmaceutical company said the new COVID-19 vaccine is 95% effective, up from the previously announced 90%. And gold, as a rule, correlates positively with the European currency, therefore, the decline in the precious metal caused a correction in EUR/USD.

The EU summit on the fight against coronavirus kicks off today. Also on the agenda is the issue of the EU budget plan, which was previously blocked by Hungary and Poland. In the evening, the head of the ECB Christine Lagarde will speak.

In the US, data on the number of applications for unemployment benefits will be published. It is expected that the number of initial applications may be reduced from 709 thousand to 685 thousand. And the number of repeated requests should decrease from 6,786 thousand to 6,250 thousand. Also of interest will be the publication of the index of manufacturing activity from the Philadelphia Federal reserve for November and statistics on second-home sales in October.

GBP/USD. November 20, 2020 – Unexpectedly strong retail sales data supported sterling

Despite the growing risks of a «hard» Brexit, the GBP/USD pair continues to move to local highs in the 1.3300 area. The current quote is 1.3280.

The dynamics of the pair was influenced by the statistics on the labor market in the UK. The number of applications for primary unemployment benefits for the week increased from 711 to 742 thousand against the forecast of 707 thousand. At the same time, investors were pleased with the reduction in secondary circulation from 6.801 million to 6.372 million against expectations of 6.47 million.

Today you should pay attention to the publication of a report on retail sales in the country. The figure in October came out much better than forecasted: sales increased by 1.2% compared to September, when the indicator grew by 1.4%. The forecast assumed growth of only 0.1%. In annual terms, sales increased by 5.8%.

At the same time, difficulties in negotiating Brexit continue to put pressure on the pound. Today it became known that negotiations were suspended again, now due to the discovery of Covid from one of the members of the negotiating team.