Technical Analytics Report

Market Review for 08 Dec 2021:

EUR/USD

The European currency is showcasing a little timid and improving chart of growth compared to the US dollar within the Asian session, getting ready to justify the test 1.1300 during breakoff in market trend. EUR/USD is putting efforts to reimburse for the outcomes of  “bearish” movements in the first half of the week, but by far the growth is mostly due only to technical factors. However, the demand for risk is slowly and steadily recovering, as traders are gaining power that the global economy will survive the troubles and difficulties due to the new strain of coronavirus being detected more easily than it was estimated.

Macroeconomic statistics that were published from Europe on the previous trading day showed mixed proportions. In Germany, all the production of industry came down to 0.6% in October, then decreased from 1% in September. Within a similar time frame market was forecasted to grow steadily at the rate of 8.8%. considering the growth annually the production was accelerated by 2.8%, which was much more than the projection of 0.8%. At the same time, the index for the assessment of current economic conditions from the ZEW located in Germany in December was revived, going down from 12.5 to –7.4 points against the forecast of a decrease of only 5 points. Eurozone GDP in Q3 2021 showcased the previous growth of 2.2% and slightly accelerated from 3.7% to 3.9% on yearly basis annually.

GBP/USD

The British pound is showing the trading higher against the US currency in the trading of the morning session, rectifying post the downfall of the previous trading session. On a general basis, GBP/USD is showing flat trading movements in the short term, remaining unaffected to record lows, as per the last update on November 30. The risks and hurdles that are associated with the discovery of the Omicron coronavirus strain are gradually going weak, which stands in the support of British currency but investors are disappointed by this go with the flow attitude of the Bank of England. Earlier it was predicted that the British regulator may raise interest rates in the meeting of December but is again not guaranteed.

Macroeconomic statistics that were published on Tuesday in Great Britain are showing neutral results and have no major impact on market volatilities. The House Price Index from Halifax in November staged the previous growth rates at the level of 1%, while analysts were expecting their slow and steady growth to be 0.6%. In annual terms, the index showcased an increase of 8.2%, contradictory to the constant rise that was predicted at the rate of 9.4%.

AUD/USD

The Australian dollar is showcasing only a little gain against the US currency in the session of Asian trading today. showcasing local highs on update on December 1. The instrument is showing rapid recovering positions, recovering from the constant losses, updated last Friday. AUD/USD is supported by the clearer vision of the traders regarding the prospective for rapid and increased growth of the world economy. Investors tend to ignore the additional risks associated with the recognition of a new strain of coronavirus, as the Omicron strain causes an already predicted mild course of the disease as per the constant studies and analysis.

On the other hand, the Reserve Bank of Australia pointed that the stop of the spread of the virus is unlikely to cause any difference to the recovery rate of the nation, which also means that the regulator will showcase its present speed of going down shortly. The macroeconomic statistics from Australia published on the previous trading day also favored the rise of bullish sentiments of all market instruments AiG Services rose from 47.6 to 49.6 points in November, more than its forecast.

USD/JPY

The US dollar has signified a little decline against the Japanese yen within the Asian session, retreating from local highs from November 30, updated the previous trading day. The development of rectified movements is mostly facilitated by technical factors, Which is not the same as the fundamental market scene.

 Investors are paying more attention to macroeconomic statistics from Japan today. Japan’s GDP in Q3 2021 showed an unappreciated downward movement of 0.9% after falling by 0.8% in the last trading period. Analysts’ forecasts assumed that the Japanese economy would be able to get back to the positive area at the level of 0.4%. In annual terms, the drop in the indicator accelerated from –3% to –3.6%, which turned out to be a significantly worse scenario than market expectations at  –3.1%. The volume of Bank Lending in November decreased from 0.9% to 0.6%, which was also showing short of investors’ expectations of growth to 1.1%.

XAU/USD

Gold prices are showing little bit higher gains during the Asian session, coming back to the correct moments from the previous trading day. Quotes are tried and tested at the level of 1790.00 for a breakout, waiting for new drivers to appear. There are many more active positive dynamics hindered by growing highs in the market that the new strain of coronavirus will not be a major hurdle to further recovery of the global economy. 

Pressure on the instrument is also emphasized by the rather strong positions of the American currency, as traders expect that the US Fed will accelerate the going down of the quantitative easing program (QE) taken place during the December meeting. Earlier, the Chairman of the regulator Jerome Powell said there are risks of systemic inflation which are noted that extra efforts may be required to stabilize prices in the country. The US labor market report for November released last Friday also signaled in favor of a faster monetary tightening. The US Unemployment Rate fell dramatically in November from 4.6% to 4.2%, which is ahead of analysts’ forecasts of a reduction to 4.5%.