The Dollar’s Demise Continues | - International

The Dollar’s Demise Continues

Admin, December 3rd, 2020

  • The dollar continued its downwards trajectory with the dollar index falling to a fresh 2.5 year lows. Most assets classes continued to take full advantage and appreciate against the greenback.
  • Gold extended its lead from its multi-month lows and closed above 1800 for its second consecutive session.
  • EUR/USD extended its lead to the 1.2100 level after breaking major resistance at 1.2000 yesterday and AUD/USD looks set to break to fresh highs. The only major the USD managed to trader higher against the Japanese yen, with USD/JPY closing the session 0.2% higher.
  • Australia’s Q3 GDP far exceeded expectations, coming in at 3.3% QoQ versus 2.6% forecast. Still, we expect the RBA to hold rates at record lows and retain their QE program for some time.


Today’s Calendar Events (Times are GMT+11 Sydney)

  • China release their final PMI service report. With manufacturing data exceeding expectations earlier this week, a decent service PMI print would point towards a broader economic recovery and could instil a slight risk-on sentiment for the session.
  • Final PMI reads across Europe aren’t likely to become too much of a volatile event, unless they deviate significantly from their ‘flash’ reads.
  • Initial jobless claims and ISM non-manufacturing reports are the main economic events in the early hours for USD traders.


WTI (WTI): Resistance Confirmed as Support

  • A bullish engulfing / outside bar has appeared on the daily chart to confirm support around 43.85.
  • As the bias remains bullish above 43.85, bulls can seek long opportunities above this level on intraday timeframes.
  • A more conservative approach is to wait for a break above this week’s highs, although before targeting next resistance around the 48 – 48.73 resistance zone.


USD/CNH: Momentum Realigns with the Bearish Trend

  • The bearish trend remains intact and resistance has been found between the 10-20 day eMA’s.
  • Tuesday saw a daily close confirmation beneath a correction line and yesterday’s high confirmed it as resistance.
  • Depending on ones appetite for risk, bears could use the 6.5965 or 6.6356 highs to aid with risk management and target the lows around 6.4500.


GBP/NZD: 3-Bar Reversal Forms Below Resistance

  • GBP/NZD remains in a bearish trend on the daily chart and recently broke below a key support zone.
  • A 3-bar bearish reversal pattern (evening star) has formed below the resistance zone.
  • The bias remains bearish below Tuesday’s high and for a run towards 1.8726.


Watchlist Update:

EUR/USD: The bias remains bullish above 1.2000, although we expect a retracement around the initial target at 1.2152.

Gold (XAU/USD): The bias remains bullish above 1800. Next major target is the 1850 – 1859 resistance zone and then the 1900 zone.

EUR/GBP: The bias remains bullish above 0.9000, although with the initial target at 0.9070 achieved we would prefer to wait for consolidation before reconsidering longs above 0.9000.

Bitcoin (BTCUSD): Prices continue to consolidate below 20,000. A break beneath 18,125 suggests traders may try to close the gap whilst a break above 20,000 assumes bullish continuation.

GBP/CHF: Bearish momentum has increased significantly and closed beneath our initial target at 1.1978.

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