Morning Brief, Nov 26 – Top Forex Trade Setups, Carney & Draghi Speak Today
Arslan Butt • 2 min read
- The dollar surged versus its major peers, as traders sought shelter in safe-haven currencies.
- Worries of a global growth slowdown and US-Sino trade tensions undermine risk appetite.
- The market is looking to hear BOE Mark Carney and ECB President Draghi today.
EUR/USD – Bullish Channel Breakout & Bearish Crossover
The single currency weakens against the buck as traders sought shelter in safe-haven currencies. Unlike normal Monday, the markets can remain to violate on the back of high impact qualitative and quantitative fundamentals.
ECB President Draghi Speaks – He is due to testify about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee, in Brussels at 15:00 (GMT).
German Ifo Business Climate – At 10:00 (GMT), Ifo Institute for Economic Research is due to release numbers on the business climate. In case you are following this event for the first, let me tell you it’s a survey of about 7k businesses which asks respondents to rate the relative level of current business conditions and expectations for the next 6 months.
Economists are expecting a slight drop to 102.3 vs. 102.8 previously. But I don’t think it will cause much movement in the EUR/USD.
Technically, the EUR/USD is trading around $1.1335 after placing a low below $1.13264. On the hourly chart, it’s about to form a bullish engulfing pattern above a strong support level of $1.1326. Above this, the EUR/USD is likely to continue trading higher until $1.1340. While the bullish breakout of $1.1340 may lead it towards $1.1365.
Daily Technical Levels
Key Trading Level: 1.1362
EUR/USD – Trade Plan
The idea is to stay bullish above $1.1350 with a stop loss below $1.1335 and take profit at $1.1390 and $1.1435. While selling is preferred below $1.1320.
GBP/USD – BOE Mark Carney Speaks Today
The GBP/USD plunged to $1.2799 support area on Brexit uncertainty. Rejecting the Brexit deal will be risky and lead to “division and uncertainty”, Prime Minister Theresa May will say to MPs who oppose her plan. The statement came after 27 other EU leaders approved the terms of the UK’s exit at a summit on Sunday.
For now, all eyes are on the BOE Mark Carney but I’m afraid his agenda of speech isn’t specifically related to monetary policy or Brexit issue. Mark Carney is due to discuss the new book by Alan Greenspan and Adrian Wooldridge: “Capitalism in America: A History” at the Policy Exchange event, in London at 19:30 (GMT).
On the technical side, the pair holds above a support level of $1.2799. On the upper side, there’s a bearish trendline which is providing a strong resistance to the cable near $1.2880. A bullish breakout can lead the GBP/USD towards $1.2975.
Daily Technical Levels
Key Trading Level: 1.2831
GBP/USD – Trade Plan
It will be nice to trade sideways by selling at $1.2890 and buying at $1.2790 until a breakout occurs.
Stay tuned to FX Leaders for more updates!