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At the end of November, the Euro is feeling very well. A remote possibility of creating a governing coalition in Germany and a strong report published by the European Central Bank supported the main currency pair while the United States of America was celebrating the Thanksgiving Day. The EUR/USD has potential to reach 1.20 and grow higher, unless the news and the German politics throw investors "a curve ball".

Once again, investors have turned to Germany's issue relating to a governing coalition. It's been two months since the parliamentary elections and the Christian Democratic Union of Germany, the party led by Angela Merkel, hasn't been able to strike a deal with any other political line, which didn't get enough seats in Bundestag. Some said that the governing party's political agenda was disappointing; other didn't want to govern in a wrong way. As a result, right now Merkel's CDU is "face to face" with the Social Democratic Party of Germany.

In the past, the SDP said that it had its own political views. Right now, these views are used as conditions that may help to form a coalition with the CDU, but only in case they are met. The conditions include changes of the country's insurance system and other social issues. Merkel is confused: on one hand, the cabinet of ministers really needs this coalition, otherwise the parliament will have to be reelected. However, on the other hand, Merkel has already rejected other parties' conditions, so why switch sides this time?

The report published by the European Central Bank showed that the regulator was no longer focused on the inflation as a major factor for making decision relating to its monetary policy. Investors immediately took these words as another speculations about closing the QE program earlier than it had been expected before. Such conclusions have little in common with the strategy the ECB spoke so many times about, but it's okay for the EUR/USD pair to hit this kind of turbulence.

Hedge funds and the interbank market seem to intend buying the main currency pair. However, a very busy week is ahead, so the instrument will surely "swing" both upwards and downwards.

As we can see at the EUR/USD pair chart, the price has started another uptrend. The current price movement is expected to test the upside border of the current rising channel close to 1.2000 – 1.2020. After testing this area, the trend may transform into a correction towards the support line at 1.1875, which may result in a rebound and a new test of the area between 1.20000 and 1.2020. if the instrument breaks this area, it may continue growing to reach 1.2270.

USD/CHF's technical structure is clearly bearish. The technical structure indicates further downside risks. The pair has failed to hold consistently above the parity. The road is wideopen for further decline.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/JPY has broken short-term uptrend channel and strong support located at 111.12 (20/09/2017 low). The road is wide open for further decline. Expected to decline below 111.00.

We favor a long-term bearish bias. Support is now given at 99.02 (10/08/2013 low). A gradual rise towards the major resistance at 125.86 (05/06/2015 high) seems unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD has been trading mixed over the past few days but the technical structure indicates an extension of bullish momentum. Support is given at 1.3027 (06/10/2017 low). Expected to show continued increase above former resistance at 1.3338 (13/10/2017 high).

The long-term technical pattern is reversing. The Brexit vote had paved the way for further decline. Long-term support can be found at 1.1841 (07/10/2017 low). Long-term resistance given around 1.35 is at stake and indicates a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD is consolidating lower. Hourly resistance is now given at 1.1961 (27/11/2017 high). Hourly support is given at a distance at 1.1554 (07/11/2017 low). Expected to show renewed increase.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance is holding at 1.2252 (25/12/2014 high) while strong support lies at 1.0341 (03/01/2017 low).

WTI oil futures are making a corrective move after outperforming in recent weeks. The underlying uptrend is still intact, with prices peaking at 59.02 on November 24 following a recent strong rally off the key 55 level.

Looking at the 4-hour chart, the market has come under increased pressure after breaking below the shorter-period moving average (20-MA). The RSI has broken below 50, suggesting that the bearish momentum could push prices lower towards the key 57 level. This is expected to act as a strong support level.

As long as the market stays above 57 then there is a possibility of a bounce back towards 58.35. Breaching this soft resistance level would see prices re-test the 59.02 peak and then resume the uptrend. Alternatively, a further decline below the important threshold at 57 would see a start of a reversal of the recent upleg from 54.79.

The fact that prices have fallen out of the rising channel does not bode well for the market’s near-term outlook. A daily close below 57 would give the recent sell-off increased momentum to the downside.

EUR/USD

Current level - 1.1891

The intraday spike to 1.1960 could be a finale of the rise since 1.1710 low and my outlook here is bearish, for a violation of 1.1870 support, towards 1.1770.

USD/JPY

Current level - 111.18

The downtrend is still intact and crucial on the upside is 111.70 high. A violation of the latter will signal, that a rebound is on the run, for 112.70.

GBP/USD

Current level - 1.3319

A reversal pattern is underway after the recent peak at 1.3380 and my outlook is bearish, for a break through 1.3280 support, towards 1.3220.

Lots of chatter from the US but little actions

The potential new head of the Fed confirmation hearing start today. Ahead of the Senate hearing on Tuesday Jerome Powell provided a clear statements indicted that his views were incline with current FOMC strategy. The statement indicated that Yellen’s policy path will be continue under Powell. He went on to stress that the Fed current institutional structured was positive and preserved its “independent and nonpartisan status”. Finally, he provided support for core banking rules such as minimum levels of liquid and capital, living will and stress testing.

Elsewhere, Fed speak was rampant on Monday. New York Fed President William Dudley indicated that he felt that inflation was below target. On the ultra-dovish side, Minneapolis Federal Reserve Bank President Neel Kashkari indicated that he was not comfortable hiking interest rate until inflation trend was on a clear path towards 2%. The USD was weaker on news that the Senate vote on the tax reform, which was scheduled to take place on Thursday, is falling short of support. Republicans occupies 52 seat however, two senators have indicated they will vote against the bill. In order to win support from the deficit hawks there is speculation that an automatic mechanism for higher taxes should revenue come up short. Passage of tax reforms should be marginally USD bullish as higher growth should pressure inflation.

Bitcoin: Ready for new highs.

Bitcoin despite being declared dead hundreds of times since its creation in 2009 has now almost reached 10’000 dollars. It represents definitely a lot of money but there are only going to 21 million bitcoins after all the Bitcoin will have been mined after 2020.

We believe the Bitcoin will continue to go up. There are less than a few hundred thousand millionaires in the world. This means that not everyone will own a Bitcoin.
On top of that Bitcoin is the entry door for accessing a lot of other crypto projects. Investing in ICO for example always requests to own Bitcoin and many exchanges do not allow fiat currencies but Bitcoin.

Last but not least it is true that Bitcoin allow people to store and transfer value. Almost anyone now can create its own blockchain but what really matters is the acceptance rate and Bitcoin acceptance rate is very strong and will keep growing.

Bitcoin will remain and we believe the price may reach very high levels in 2018. For example the Bitcoin market capitalization has recently exceeded the McDonald’s market capitalization with $165 billion versus $134 billion.

Views of the new Fed chairman in focus
BOE releases its stress test results, Carney weighs
Brexit Deal depend on Ireland, May still clueless

Investors over in Europe have shrugged off their concerns about the lower energy and mining stocks which pulled the Asian markets lower. The Bank of England released its stress test results and the news was encouraging for most of the banks except Barclays and RBS. Both banks arose as the weakest lenders in the UK under the unfavourable stress test scenarios. This is going to make matters tough for these banks to reinstate the dividend which they were eager to do so for some time.

The BOE applied a lot more stringent measures this year in its test (given the massive loss of currency value, consumer credit losses and the departure of the UK from the EU). The bank of England does reason that none of the UK banks would need to take any remedial actions. The banking system is robust enough to face the loss of £350 billion loss and it can still provide lending to consumers. The other five major UK banks (HSBC, Standard Charted, Nationwide, Lloyds banking group and Santander UK) have a lot to sing about the results because their capital levels remained above the minimum required limit during the stress test.

The governor of the Bank of England thinks that the Fintech innovation opens the UK banking system to risk. Basically, with Brexit on the table, technological innovation could see a massive downturn in the UK and the banks which are leaving the UK would use whatever they could to sustain their business. Therefore, the UK government should keep London as the hub of technological advancement. The government should also make the Brexit transition process smoother and provide clear and concise information for the banks to sustain their business.

Sterling needs to break out if it's consolidation which is between the level of 1.29-1.34 against the dollar. Irish border issue is testing Theresa May and her abilities to think outside the box. However, for the time being, she has decided to dodge the bullet. It appears she doesn't have abilities to persuade her coalition partner to postpone and hasn't made any progress in making a coalition

For the US dollar, the affair which matters the most is the view of the upcoming Federal Reserve's chairperson on inflation. Jerome Powell would have a Senate confirmation during the US trading hours and traders are going to gauge the amount of interest rate hikes for the next year based on his view of the economy and inflation. The dollar index has been on a downtrend throughout this year while the Fed has tightened the screws around its monetary policy- a trade which many didn't see coming this way. The biggest question for investors would be if this trend is going to continue next year?

The heavyweight champions of OPEC are going to decide about extending the production cut during their meeting this week. It is widely anticipated that they are going to extend the production cut despite the fact that currently, Russia doesn't appear to be on the same page as other. The message that they need give to the market is that they are firmly behind their commitment and if the situation demands, they would be willing to extend the production cut beyond 2018. This kind of united front and the strong message would have the ability to push the crude price beyond $60 mark.

Cable stands at the back foot in early Tuesday's trading and attacks 1.3300 support broken bear-trendline connecting former 1.3337/20 highs.

Monday's action ended in Doji candle with long upper shadow, signaling possible stall, as repeated upside rejection (at 1.3357) happened today.

Initial negative signal could be expected on firm break below 1.3300 which would expose next strong support at 1.3276 (daily cloud top).

Slow stochastic is heading south on daily chart after reversing from overbought territory and shows more room at the downside.

Extended dips would find another support at 1.3260 (converged 10/55 SMA's forming bull cross) where corrective action is expected to reverse.

Stronger bearish pressure could be expected on break below daily cloud ( cloud base lies at 1.3214, reinforced by daily Kijun-sen).

Res: 1.3357, 1.3382, 1.3401, 1.3415
Sup: 1.3276, 1.3260, 1.3214, 1.3203