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GBP/AUD has been trading in a flat channel down since mid-2016. Also, two additional channels up have prevailed within this senior pattern. After halting near the 1.62 mark and thus failing to reach the lower boundary of the senior channel in August, the Pound has since pushed up to the 1.76 area. This level coincides with the upper boundaries of both long– and medium-term channels. Despite testing 1.76 last Tuesday, the pair has since remained near this mark. This suggests that bulls might not yet be ready to give up their positions. Moreover, technical indicators likewise favour further advance during the next week. If the 1.76 area is breached, the rate might push up to 1.78 mark where the weekly R3 and the monthly R2 are located. On the other hand, a reversal of the 1.76 area is likely to guide the Pound towards the monthly PP at 1.7134.

Even though the Euro climbed more sharply than expected amid the news that Merkel agreed to form coalition with the SD, the movement remained in line with general expectations. As long as the pair stays within the ascending channel that is backed up by the rising 55-, 100- and 200-hour SMAs, it is likely to continue advancing against the Dollar towards the 1.2000 mark that represents an intersection of the pattern’s upper boundary and the monthly R2. In shorter perspective bears might try to gain a momentum, although the plunge is unlikely to exceed the 1.1870 level, as this area is secured by the 61.8% retracement level, one of the above MAs and the weekly PP. However, the red scenario is unlikely due to formation of a minor pennant pattern, which presupposes further surge.

On hourly chart the British Pound is continuing to gain value against the Dollar in a two-week long ascending channel. Generally, the cable is projected to continue heading to the top in the above pattern using support continuously provided by the rising 55- and 100-hour SMAs. The ultimate goal is located near the 1.3430 level and presents location of the upper boundary of a long-term dominant descending channel. However, before that the surge of the currency rate is likely to be stopped in the 1.3370-1.3380 resistance area. In case of retreat, strengthening of the buck in unlikely to exceed the 1.3300 mark, as this support zone is backed up by the updated weekly PP and the above 100-hour SMA. Finally, the only macro release, which might cause notable volatility will the US Prelim GDP.

In line with expectations, by the end of the previous trading session the currency rate has reached the upper boundary of a currently active descending channel. As this barrier was additionally backed up by the 38.2% Fibonacci retracement level as well as the falling 100-hour SMA, the pair was forced to rebound. During first half of the day the pair is likely to get back to the 11.60 mark amid the push made by the 55-hour SMA. But subsequently the pair is expected to test support area between the 111.20-111.10 levels. Unless the Yen receives a proper impulse this barrier might ruin the pattern. However, such scenario unlikely to lead to rapid recovery of the buck, as on daily chart road to north is blocked by a combination of the 100- and 200-day SMAs.

During the previous trading session the rate formed and made a breakout from junior symmetrical triangle pattern. Fortunately, a combined support formed by the 100-hour SMA and the updated weekly PP at 1,286.16 managed to turnaround the pair. In short run, the surge of the yellow metal once again is likely to be halted near the 1,293.00 and 1,295.00 resistance levels, which might lead to formation of a minor ascending triangle. But in larger perspective the pair is projected to reach the upper boundary of a medium-term ascending channel near the 1,300-1,302.00 marks. In support of this assumption, 55% of traders remain bullish on the given pair. Moreover, since that area is backed up by the 23.6% Fibonacci retracement level there is little chance that the pair will manage to breakout to the top.

The Euro strenghtened against the Greenback on a survey indicating businesses felt more optimistic about their outlook. The EUR/USD rate rose 16 base points or 0.13% to 1.1874. Then, the European single currency rose further agains the US dollar on the speculation that German major opposition SPD party was considering another coalition government with Chancellor Angela Merkel’s Union parties.

The Munich-based Institute for Economic Research Ifo revealed that business confidence in Germany hit another high, as companies reported stronger optimism about the future, while being slightly pessimistic about current situation. The report showed the Business Climate Index at 117.5 in November, following 116.8 in the previous month.

South Africa's credit rating cut further into 'junk'

The South African rand took a hit on Friday following the downgrade of the country's credit rating. Standard & Poor's lowered further the long-term foreign currency sovereign rating into 'junk' territory, to 'BB' from 'BB+'. The rating agency also slashed the country's local currency investment grade as it lowered the rating to 'BB+' from 'BBB-'. In addition, Moody's placed the Baa3 rating on review for downgrade. According to Moody's, 'The decision to place the rating on review for downgrade was prompted by a series of recent developments which suggest that South Africa's economic and fiscal challenges are more pronounced'.

USD/ZAR rose almost 2.60% in a matter of minutes and hit 14.4656 before the closing bell. However, the currency pair reversed losses on Monday morning, with USD/ZAR easing to 13.90. South Africa's sovereign yields barely reacted to the news with both the 2-year and 10-year yields rising only 6bps. The lack of reaction from investors suggests that the downgrade doesn't change anything right now. Given that the country had already been stripped of its investment grade rating in April this year. However, it still sends a negative signal to investors and acts as another warning for the country. Indeed, little has changed since the last credit rating cut: the growth prospects remain weak and the debt burden keeps increasing. A downgrade to junk by Moody's would exclude South Africa from the World Government Bond index, which will eventually add further pressure on bonds' price. We expect further weakness in the rand as the government will likely takes its time to come with a clear plan. USD/ZAR should continue moving towards 14.75.

EUR/USD: Markets cautious with the Fed strategy

The Euro-dollar is back to two-month high despite the fact that the Fed will almost certainly raise rates in December. The pair is now trading above 1.19 dollar for one single euro coin. The ongoing political crisis in Germany did not have any impact yet on the single currency. In other words, markets give the sentiment that the economic impact that could stem from a political change in Germany is not relevant at this stage.

Concerning the US bond market, the 2-year US government bond continues to raise and is now at levels unseen since 2009 at 1.75%. However the back-end of the curve remains somewhat flat above 2.25% meaning that the inflation's expectations are still very low.

In our view we believe that the inflation is underestimated and that the Fed should actually raise rates even higher, but the US central bank is perfectly aware that increasing rates would trigger turmoil in the bond market. This is why we believe that markets are very cautious concerning the dollar. The US monetary policy is likely to be back on the wait-and-see mode in 2018. For the time being, we believe that the Eurodollar has then more room for further appreciation.

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).

Silver is heading higher. Hourly support can be found at 16.60 (27/10/2017 low). Hourly resistance is given at 17.46 (13/10/2017 high). Additional support can be found at 16.13 (06/10/2017 low).

In the long-term, the trend is rater negative. Further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Gold is pushing higher. The technical structure confirms the end of the consolidation phase. Support lies at a distance at 1251 (08/08/2017 high). Resistance is located at 1288 (20/10/2017).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).