The US dollar continued falling during the Asian session as traders continued to focus on vaccine and US politics news. On the vaccine, several countries, including the United States, Germany, and the UK have announced plans to start vaccinations before the end of the year. This happened after positive results from companies like Moderna, AstraZeneca, and Pfizer. The dollar weakened because of US politics as Joe Biden continued assembling his government. Meanwhile, preliminary data from the US showed that the manufacturing and services sectors continued to do well in November even as the pandemic continued. The two PMIs increased to 56.7 and 57.7, respectively.
The strong cryptocurrencies rally continued in overnight trading as the market continued to price-in strong institutional support. The price of Bitcoin jumped to more than $18,500 while Ethereum and Ripple rose to more than $620 and $0.60, respectively. In total, the combined market cap of all digital currencies rose to more than $559 billion, making them a substantial asset in the market. A weaker dollar has also supported these prices.
The economic calendar will not have any substantial events today. In Europe, we will receive the latest third-quarter GDP estimate data from Germany. Analysts expect the data to show that the economy expanded by 8.2% in Q3 leading to an annualised contraction of 11.3%. The Ifo Institute will also deliver its business expectations and assessment data. In the United States, we will receive the house price index, consumer confidence, and the Richmond manufacturing index. Finally, the American Petroleum Institute will release the weekly crude oil inventories numbers.
The EUR/USD price dropped to the psychologically important low of 1.1800 yesterday. It was also its lowest level since November 11 and lower than the ascending white trendline. During the Asian session, the pair managed to rise back to that trendline and is now trading at 1.1848. It is also slightly below the 25-day and 15-day moving averages. Therefore, the likely scenario is where the price resumes the downward trend today and retests the lowest level yesterday. The alternate situation is where the price rises above the trendline and continues the previous trend.
The GBP/USD price dropped to a low of 1.3312 during the American session. On the daily chart, the price is still above the ascending white trendline. It is also forming a bearish flag pattern that is shown in yellow. Importantly, the pair’s Relative Strength Index (RSI) and the Average True Range (ATR) have also declined. Therefore, the pair is likely to resume the downward trend today as bears aim for the next support at 1.3275.
The XAU/USD pair continued falling during the American session as the rotation to digital currencies gained steam. The pair is trading at 1,823, which is substantially lower than last week’s high of 1,880. It is also below the 15-day and 25-day moving averages while the RSI has dropped to the oversold level of 18. Therefore, it seems like bears are in control, which will likely see the price continue falling.