November 26, 2021
EUR/USD: The European currency rose a little against the US dollar on Thursday. The US celebrated Thanksgiving Day yesterday, so the market was closed. Today we don’t expect any big market moves either. The euro has lost around 3% this month due to expectations that the European Central Bank will be more dovish than the Fed, as well as, more recently, a new wave of COVID-19 restrictions in Europe. A surge in coronavirus infections in Germany and unusually high inflation rates are weighing on consumer morale in Europe’s largest economy, a survey showed on Thursday. Today the European Central Bank President Christine Lagarde is speaking at the ECB Legal Conference 2021 and Switzerland is publishing the Gross Domestic Product data for the third quarter. The local resistance level can be seen at 1.1240. If the pair reaches this level and rebounds from it, it can trigger a further decline towards 1.1185.
USD/JPY: The US dollar fell against the Japanese yen yesterday and at the beginning of today’s trading session due to a drop in the benchmark 10-year Treasury yields. Japan’s Tokyo Consumer Price Index jumped to 0.5% in November while the CPI ex. Fresh Food was 0.3%, worse than market expectations. Other than the mixed inflation data, gossip that the Japanese Prime Minister is up for pushing a 3% wage hike this spring adds strength to JPY. The pair can correct to the 114.55 level and after that, the price will probably continue its upward movement towards 115.20.
XAU/USD: Gold prices were a little changed on Thursday. Further rise in bullion is limited by the expectations that the US Federal Reserve may speed up its monetary tightening sooner to tame rising prices. These bets were reinforced by Wednesday’s release of the US PCE Price Index, which accelerated to a 30-year high in October. The minutes of the November FOMC meeting showed the Fed was open to speeding up the tapering of the bond-buying program and moving quickly to raise interest rates if high inflation persists. The local support level can be seen at $1775. A breakout below could take the pair to an immediate target of $1760.