Sample Category Title

Pivot (invalidation): 1.1360

Our preference Short positions below 1.1360 with targets at 1.1325 & 1.1310 in extension.

Alternative scenario Above 1.1360 look for further upside with 1.1380 & 1.1400 as targets.

Comment The upward potential is likely to be limited by the resistance at 1.1360.

Pivot (invalidation): 2628.00

Our preference Long positions above 2628.00 with targets at 2650.00 & 2670.00 in extension.

Alternative scenario Below 2628.00 look for further downside with 2600.00 & 2590.00 as targets.

Comment The RSI is mixed and calls for caution.

German Ifo business climate dropped to 102.0 in November, down from 102.9 and missed expectation of 102.3. Current assessment gauge dropped to 105.4, down from 106.1 and missed expectation of 105.6. Expectations gauge dropped to 98.7, down from 99.7, missed consensus of 99.3.

Ifo President Clemens Fuest noted in the release that "Together with other indicators, these results point to 0.3 percent economic growth in the fourth quarter at most. The German economy is cooling down. "

Full release here.

Pivot (invalidation): 11210.00

Our preference Short positions below 11210.00 with targets at 11070.00 & 11010.00 in extension.

Alternative scenario Above 11210.00 look for further upside with 11270.00 & 11320.00 as targets.

Comment As Long as the resistance at 11210.00 is not surpassed, the risk of the break below 11070.00 remains high.

Pivot (invalidation): 51.60

Our preference Short positions below 51.60 with targets at 49.90 & 49.00 in extension.

Alternative scenario Above 51.60 look for further upside with 52.80 & 53.55 as targets.

Comment The RSI is mixed to bearish.

Pivot (invalidation): 14.1700

Our preference Long positions above 14.1700 with targets at 14.4300 & 14.5000 in extension.

Alternative scenario Below 14.1700 look for further downside with 14.1000 & 14.0400 as targets.

Comment The RSI calls for a rebound.

Pivot (invalidation): 1220.00

Our preference Long positions above 1220.00 with targets at 1225.00 & 1227.50 in extension.

Alternative scenario Below 1220.00 look for further downside with 1217.50 & 1214.00 as targets.

Comment The RSI is mixed with a bullish bias.

The USD strengthened against a number of its peers on Friday as worries about a possible global growth slowdown grew. The safe haven qualities of the greenback provided it with some support even against a number of other safe haven currencies as the Yen. Main reasons for such a development could include an interest rate differential of the Fed and the BoJ, as they keep opposing monetary policies. Analysts point out that the US-Sino trade relationships could be playing a major part in this week's fundamentals, as the G20 meeting is drawing near and a meeting between US president Trump and Chinese president Xi could take place. Volatility could emerge once again for the greenback, after a possibly extended Thanksgiving holidays.

USD/JPY during the Asian session today teasing the 112.25 (R1) resistance line. Should the risk aversion sentiment continue to dominate the market, we could see the pair trading in a bullish market today. Should the pair find fresh buying orders along its path we could see it breaking the 113.25 (R1) resistance line and aim for the 113.95 (R2) resistance hurdle. Should the pair come under the selling interest of the market we could see it dropping and aiming if not breaking on the 112.72 (S1) support line.

EU ratifies draft Brexit deal

Despite some turbulence on Friday, EU leaders ratified the Brexit deal and named it the best possible deal the UK could get. The pound got little support against the USD, as market focus continues to be on whether the UK parliament will vote the Brexit agreement. A vote in the UK parliament, could be expected before the next EU summit on December 13th and the big question is whether UK PM Theresa May will be able to gather the necessary votes. Analysts expect the pound to remain under pressure until the vote in the UK parliament as uncertainty remains.

Cable dropped on Friday, breaking the 1.2850 (R1) support line (now turned to resistance) and remained relatively stable during the Asian session today. If the pound remains under pressure as Brexit uncertainty persists, we could see the pair trading in a bearish market today. Should the bulls take over, we could see the pair breaking the 1.2850 (R1) resistance line and aim for the 1.2920 (R2) resistance level. Should on the other hand the bears continue to reign over cable, we could see it breaking the 1.2780 (S1) support line and aim for the 1.2700 (S2) support zone.

In today's other economic highlights:

In the European session today, we get Germany's Ifo business climate indicator for November and after the American session we get New Zealand's trade balance figure for October. As for speakers, please bear in mind that ECB's Peter Praet (09:00, GMT), Benoit Coeure (12:00, GMT), president Mario Draghi (14:00,GMT) and BoE's governor Mark Carney (18:30, GMT) speak.

The week ahead:

On Tuesday, we get the US CB Consumer Sentiment for November. On Wednesday, from Germany the GfK Consumer Climate for December and from the US the GDP for Q3 as well as the new home sales figure for October. On Thursday, Japan's retail sales for October are to be released as well as Germany's unemployment data for October, Eurozone's Industrial sentiment for November, Eurozone's final consumer for November, Germany's preliminary HICP rate for November and the finally the FOMC will be releasing the minutes of its last meeting. On Friday, we get Japan's unemployment rate and industrial output for October, China's MBS manufacturing PMI for November, Germany's Retail Sales for October, France's and Eurozone's preliminary HICP rates for November and Canada's GDP growth rates for Q3.

USD/JPY H4

Support: 112.72 (S1), 112.15 (S2), 111.60 (S3)

Resistance: 113.25 (R1), 113.95 (R2), 114.50 (R3)

GBP/USD H4

Support: 1.2780 (S1), 1.2700 (S2), 1.2600 (S3)

Resistance: 1.2850 (R1), 1.2920 (R2), 1.3015 (R3)

• Pound unimpressed by EU leaders approving Brexit deal, as UK Parliamentary endorsement still looks highly unlikely.
• Euro drifts lower after soft PMIs heighten speculation for a cautious ECB. President Draghi’s remarks today will be watched closely.
• Loonie unable to rally after decent data, as oil prices continue to plunge.
• Dollar capitalizes on risk-off mood, looks to key Fed speakers for direction.

Pound little changed as EU leaders approve Brexit deal

EU leaders approved the Brexit divorce deal over the weekend, with all of them – including PM May – echoing the message that this is the “best, and only deal possible”. The British pound for its part completely overlooked the headlines, trading nearly unchanged against its major peers today. Investors appear to be signaling it’s not time to get excited just yet, as the deal also needs to pass through the UK Parliament, which seems like a herculean – if not impossible – task considering it faces opposition from all sides. The caveat is that with markets looking almost convinced it will be voted down, most of the “bad news” may be priced in already and hence, anything that changes this narrative over the coming weeks could trigger a sizeable relief rally in sterling.

Beyond Brexit, BoE Governor Carney will speak today at 1830 GMT, though politics will probably continue to overshadow economics in driving the pound over the coming weeks.

Euro tumbles as disappointing PMIs hint at dovish tilt by ECB

The single European currency fell across the board on Friday but managed to recover some of those losses today, after the bloc’s preliminary PMI surveys for November disappointed yet again. The sustained weakness suggests the euro area remains in “low gear”, and may be a factor that lessens the ECB’s confidence in its normalization plans. While the Bank appears firmly committed to ending its QE program in December, further softness in economic data may lead policymakers to adopt a more cautious tone with respect to any tightening after that, for instance around the timing of the first planned rate hike.

Note that investors are no longer convinced a 10bps ECB rate hike will materialize in 2019, instead assigning a 84% probability to that scenario, according to EONIA swaps and Euribor futures. Remarks by the ECB’s Coeure (1230 GMT) and Draghi (1600 GMT) today may be pivotal; any hints of a more “measured” rate-hike approach against the backdrop of a slowing economy may spell more troubles for the euro.

In Germany, the Ifo survey for November is due out at 0900 GMT.

Loonie unable to rally on solid data as oil carnage accelerates

In Canada, the loonie was unable to draw strength from a batch of encouraging inflation and retail sales data on Friday. The culprit behind the currency’s underperformance was yet another plunge in oil prices, with WTI falling by nearly 8% on the day to touch a fresh one-year low amid continued concerns around both oversupply and a slowdown in demand. Both the loonie and crude prices are a little higher today, recovering some of their recent losses. It remains to be seen whether speculation around an OPEC supply cut will be enough to support oil prices as we draw nearer to the cartel’s next meeting on December 6. Until crude prices stabilize, any rallies in the loonie may remain relatively short-lived.

Dollar capitalizes on “Black Friday’s” risk-off mood, but sentiment rebounds

As for the dollar, it closed higher overall on Friday, capitalizing on the pullback in the euro and on the broader risk-off mood in markets, which tends to benefit the greenback due to its reserve currency status. US stock indices ended lower, though sentiment looks to have recovered on Monday as Asian markets closed mostly in the green, while futures tracking the major European and US benchmarks are pointing to a higher open as well.

Accordingly, the dollar is a little lower today, though the currency’s short-term direction may be decided mainly by the plethora of Fed speakers that are on the agenda this week, most notably Chair Powell on Wednesday and Vice Chair Clarida on Tuesday.

More on comments from Italy's Deputy Prime Minister Luigi Di Maio as he toned down the stance on budget. He said in a radio interview that "what is important is that the budget contains the goals that we have established." He referred to the measures including citizen's income, and increase in retirement age.

And, he added "then if the negotiation means that the deficit (target) must come down a bit, for us it's not important." Di Maio emphasized that "citizens are more important than numbers."