EXPERT / MORNING BRIEFING

TODAY'S MORNING BRIEFING

MARKET RECAP

USDTRY1.36%3.9289
USDRUB0.60%59.38
USDJPY0.46%112.62
EURUSD-0.48%1.1733
UKOIL (Jan.2018)-0.80%62.22
XAUUSD-1.20%1,276.92
Prices as of previous session instrument closing.

▶︎ Merkel signals she is ready for new elections to break political stalemate. She also made it clear that she intends to serve her fourth term and prefers new elections rather than governing without a majority.

▶︎ Turkish Lira fell to a new record low, 3.97806 against the dollar. Lira trims losses ads Central Bank tightens liquidity.

▶︎ Emerging market currencies under pressure, TRY down 0.9%, ZAR dawn 0.5%.

▶︎ European shares close in green. DAX up 0.5% after opening lower, Euro Stoxx50 up 0.39%, FTSE MIB up 0.44%. The global stock indices of major countries are also showing some weakness, including those in the US, and this is beginning to have a bearish effect on the DAX.

▶︎ EURUSD flat after dropping 0.5% on Monday to 1.1722.

▶︎ Crude oil prices little changed, as an expected OPEC-led cut was met by rising output from the United States. WTI Crude (January) traded at 56.60$/barrel.

▶︎ XAUUSD rose 0.3% above 1,280$ per ounce as President Trump put North Korea back on a list of states which sponsor terrorism.


CHART OF THE DAY

USDTRY (Daily timeframe)


USDTRY soared to fresh all-time highs at 3.97806 overnight. The pair is now supported at 3.9000, key psychological level and break-out point. To the upside, the next level to watch is 4.000, with a break here to extend gains to 4.09.


ECONOMIC CALENDAR

TIME (CET)MARKETEVENTFORECASTPREVIOUS
11:00GBPInflation Report Hearings
14:30USDChicago Fed National Activity Index (Oct)0.200.17
14:30CADWholesale Sales (Sep; MoM)0.6%0.5%
16:00USDExisting Home Sales (Oct)5.40M5.39M
16:00EURECB’s Cœuré speaks

The calendar kicks off with a hearing on the Bank of England’s November inflation report. BoE members Cunliffe, McCafferty, Saunders and Vlieghe will testify before the Treasury Committee in Parliament at 11:00 CET. Increased volatility can be expected for GBP pairs as they are likely asked to provide further guidance on inflation missing the 3.1% forecast. Releases to keep an eye out for in the afternoon are the Chicago Fed National Activity Index (14:30 CET) and US Existing Home Sales (16:00 CET). The former is forecasted to rise to 0.20 from 0.17, while the latter is expected to increase 0.2% to 5.40M. ECB’s Cœuré will chair a policy panel on “Economic convergence: before or beyond fiscal union” at an ECB conference in Frankfurt at 16:00 CET.


TECHNICAL ANALYSIS

FTSEMIB (Daily timeframe)


FTSEMIB rebounded after it opened below key support under 22000. The index remains in a downward slope channel, and a move above 22300 is needed to relieve it off the bearish pressure. Support lies at 22000/21900, with a breach to lead to further weakness towards 21200.


DAX (Daily timeframe)


Dax continues its downward movement today. Despite bouncing off its weak open, the 12895-12900 support was broken, which is a key level to watch. If the index stays below 12900, the frist target is 12700. However a move above 12900 will see it head back to 13000-13020 range.


EURUSD (Daily timeframe)


EURUSD fell to 1.1722 as it found resistance at the 50% Fibonacci retracement of the September high to November low move. The pair is supported below 1.17 while a rally should find resistance above 1.1850s.