Sample Category Title

The Canadian dollar's slide has paused on Friday, after four straight losing sessions. Currently, USD/CAD is trading at 1.2882, down 0.12% on the day. The Canadian dollar has suffered a rough week, declining 1.3 percent. On the release front, it's a busy day in Canada, with three key releases. GDP, which is released monthly, is expected to post a small gain of 0.1%. Employment Change is forecast to slow to 10.2 thousand, and the unemployment rate is expected to edge lower to 6.2%. Traders should be prepared for some movement from USD/CAD during the North American session.

Canada's economy has slowed down, as GDP numbers have softened in the second half of 2017. In July, GDP came in at a flat 0.0%, and this was followed by a decline of 0.1%, in August, the first contraction since October 2016. Another weak reading for GDP on Friday could make investors frown and hurt the shaky Canadian dollar. On Thursday, USD/CAD climbed to a high of 1.2909, breaking above the 1.29 line for the first time since October 31. Weaker economic activity has given the Bank of Canada some breathing room, and the BoC is not expected to raise interest rates before April 2018. As well, uncertainty over NAFTA, which the US has threatened to torpedo, is weighing against another rate hike.

All eyes are on Washington, as the Senate is set to vote on its version of tax reform. A vote was expected on Thursday night, but this has been delayed until Friday. Republican lawmakers are confident that they have the necessary votes to pass the bill, but with the vote expected along party lines, the results will be close. If the Senate does pass the bill, the stock markets and US dollar will likely respond with gains. The next step in the tax reform saga would be for the House and Senate to bridge the differences between the two bills and come up with a single version, which would have to be voted on by both the House and the Senate.

The DAX index is down sharply in the Friday session. Currently, the DAX is at 12,859.75, down 1.26% on the day. On the release front, the focus is on manufacturing data. Eurozone Final Manufacturing PMI improved to 60.1, above the estimate of 60.0. German Final Manufacturing PMI climbed to 62.5, matching the forecast. Still, the strong readings failed to stem sharp losses on Friday, as investors remained concerned about a delay in the vote over the US tax reform bill.

The week ended on a positive note for eurozone and German indicators, as manufacturing PMIs improved in October. Eurozone Final Manufacturing PMI climbed to 60.1, and the German indicator improved to 62.5 points. The German reading marked the highest since February 2011, while the eurozone release was the strongest since April 2000. The sparkling numbers underscore stronger global demand for European products, which have boosted the manufacturing and export sectors.

German retail sales continue to struggle, as the key indicator posted a sharp decline of 1.2% in October. This marked the third decline in four months. Germany’s economy is solid and the labor market is strong, so why isn’t the German consumer spending? Strong economic conditions have not translated into higher wages for a large segment of the labor force, and low unemployment numbers have masked the problem of underemployment, ,which of course means lower wages for workers who can’t find full-time work. The lack of inflation in Germany is apparent in the eurozone as well, as inflation levels remain below the ECB’s inflation target of around 2 percent.

All eyes are on Washington, as the Senate is set to vote on its version of tax reform. A vote was expected on Thursday night, but this has been delayed until Friday. Republican lawmakers are confident that they have the necessary votes to pass the bill, but with the vote expected along party lines, the results will be close. Investors are closely following the proceedings, and the delay in the vote has sent global stock markets lower on Friday. If the Senate does pass the bill, the stock markets and US dollar will likely respond with gains. The next step in the tax reform saga would be for the House and Senate to bridge the differences between the two bills and come up with a single version, with the goal to present a new tax bill for President Trump’s signature before Christmas.

EUR/USD

Current level - 1.1922

The outlook is positive for breakthrough the level at 1.1932 for test at 1.1960 and uptrend up to 1.2050. In negative direction the support levels are at 1.1876 and after that at 1.1811.

USD/JPY

Current level - 112.57

The movement of the currency pair is right before a test at the level 112.72. Successful breakthrough at this level will lead to movement up to 113.90. In negative direction the support level will be at 110.80.

GBP/USD

Current level - 1.3524

After the yesterday breakthrough of the resistance level at 1.3450, the forecast is positive for test at 1.3620. In negative direction for support level we could take  the level at 1.3219.

The cross found footstep after steep four-day fall from 0.8981 week's high, with bears being so far contained by 200SMA (0.8795) despite brief probes below. Strength and pace of recent fall suggests corrective action as likely near-term scenario. Recovery attempts were so far capped at 0.8840 (broken Fibo 61.8% of 0.8732/0.9013 rise) with strong barrier at 0.8870 (converged 10/20/55SMA's in attempt to create double bear-cross) expected to cap corrective action. Widening daily cloud maintains downside pressure (cloud base lies at 0.8906) for final break through 200SMA and extension towards key support at 0.8732 (01 Nov multi-month low).

Res: 0.8840, 0.8870, 0.8884, 0.8906
Sup: 0.8795, 0.8776, 0.8745, 0.8732

The British pound continues to rally sharply higher against the U.S dollar, with price-action reaching 1.3540. The GBPUSD pair surged, as the U.S dollar index crashed lower on U.S political jitters on Thursday. The pair still trades well above the 1.3500 level, with sterling now gaining over three-hundred pips from weekly price-low's. Manufacturing data is in focus today from both sides of the Atlantic, with the release of the UK Manufacturing PMI, and later today the ISM Manufacturing report from the United States.

The GBPUSD pair remains technically bullish while trading above the 1.3450 level. Upside towards the 1.3610 level remains the medium-term price objective for buyers. Extended resistance is found at the 1.3750 level.

Should the GBPUSD pair start to slip much below the 1.3450 technical level, a correction towards the 1.3400 level will likely follow. Extended GBPUSD support is found at the 1.3360 level.

The euro has moved sharply higher against the U.S dollar, hitting 1.1932, after reports surfaced that the White House could be replacing current Secretary of State Rex Tillerson. The EURUSD currently trades back around the 1.1900 handle, as the U.S dollar index stabilizes, after the index crashed to 92.80 on Thursday. The euro has made a swift recovery, after previously trading as low as 1.1810, after softer than expected inflation data from the eurozone economy. Traders now look to the release of the ISM manufacturing report from the United States.

The EURUSD pair remains strongly intraday bullish while trading above the 1.1900 level. Any declines will likely find support at the 1.1877 level. Extended support is found at the 1.1748 level.

A break back above the 1.1900 level, will likely lead to further upside in the EURUSD pair towards the 1.1932 and 1.1961 levels. Extended resistance is found at the 1.1990 level.

The global financial markets will shift their attention to North America on Friday, with reports from Canada and the United States set to make headlines. Europe will also see a fairly active session with a slew of PMI reports scheduled for release.

European action begins at 0:84 GMT with Italy's manufacturing PMI for November. Over the next 15 minutes, IHS Markit will release the manufacturing gauges for France, Germany and the broader Eurozone. The euro area manufacturing PMI is forecast to come in at a highly robust 60.

Markit will also release the United Kingdom's latest PMI report at 09:30 GMT.

Shifting gears to North America, the Canadian government will unveil its third quarter GDP figures at 13:30 GMT. The Canadian economy is forecast to expand 1.6% in the third quarter after surging 4.5% in Q2 to become the fastest-growing nation in the Group of 7.

The Canadian government will also report on employment. A net gain of 10,000 workers is expected for November.

In the United States, Markit will release the latest US manufacturing gauge. Meanwhile, the Department of Commerce will issue a monthly report on construction spending.

In policy news, Federal Open Market Committee (FOMC) members Richard Kaplan and Patrick Harker are scheduled to deliver speeches. Fed governor James Bullard will also deliver public remarks.

Earlier in the day, the Caixin China manufacturing index came in slightly weaker than expected at 50.8 on a scale where 50 separates expansion from contraction.

Dr. Zhengsheng Zong, director of macroeconomic analysis at CEBM Group, issued the following statement:

“For the most part, the manufacturing sector remained stable in November, although some signs of weakness emerged. In the fourth quarter, the economy is likely to maintain the stability observed since the start of the second half of the year. Economic growth in 2017 is expected to be higher than last year, but it may come under downward pressure in 2018.”

USD/CAD

The Canadian dollar has been in steady decline over the past few days, with the USD/CAD reaching the highest level in a month. The pair could be highly volatile around the major market moving data releases Friday morning.

EUR/USD

The euro bounced back on Thursday and is currently trading just north of the 1.19 US handle. The EUR/USD exchange rate continues to face resistance near 1.20. However, the long-term outlook remains favourable, with Danske Bank forecasting a return to 1.30.

GBP/USD

Cable's steady advance continued on Thursday, as prices extended gains north of 1.35. The GBP/USD exchange rate was last seen trading at 1.3530. The pair faces immediate support at 1.3410 and 1.3380. On the opposite side of the ledger, resistance is likely to come at 1.3450 and 1.3490.

The USD/JPY made a diving board pattern straight from 111.70 zone and it is consolidating now at 38.2 of the previous swing low. The price is supported by 38.2, D L3, W H4 and double bottom within 112.30-40 zone. This accounts for the POC zone. If the price bounces from the zone, targets could be 112.77 and 113.14. Have in mind that Friday is generally a profit taking day, so we might see some volatility. It doesn't hurt to protect profits by applying profit stop when volatility is higher than usual and on Fridays.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

Spot Gold edged higher on Friday following steep two-day fall when the yellow metal fell to $1270, down nearly 1.5%. Softer dollar on Friday inflated metal's price, with limited recovery expected as sentiment remains negative and tech on daily chart techs remaining in bearish setup. Thickening daily cloud continues to weigh (cloud base lies at $1283, reinforced by 20SMA and expected to limit extended corrective action). Bear-leg from repeated upside rejection under $1300 barrier is expected to attack targets at $1266 (200SMA) and $1263 (27 Oct low). Conversely, stronger recovery could be expected on penetration and close in the cloud.

Res: 1278, 1281, 1283, 1288
Sup: 1273, 1270, 1266, 1263

Crude oil has finished its consolidation and is now ready to challenge the 60-dollar level. Expected to show continued increase. Support is given at a distance at 54.81 (14/11/2017 low)

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. For the time being the pair lies in an upside momentum. Strong support lies at 35.24 (05/04/2016) while resistance can now be found at 55.24 (03/01/2017 high).