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08.11.2021 Market Report


EUR/USD seems to have gone into a consolidation phase a little above mid-1.1500s after dropping toward 1.1500 on Thursday. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to stage a minor bounce towards the 1.1675 downtrend.


GBP/USD suffered heavy losses following the Bank of England’s decision to leave its policy rate unchanged last week. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the cable could plummet to 1.3165 on a break below the 1.3411 September low.


The pair attracted some dip-buying on the first day of a new trading week and recovered a major part of Friday’s losses to the 113.30-25 horizontal support. Rebounding US Treasury bond yields underpinned the US dollar and turned out to be a key factor that acted as a tailwind for the USD/JPY pair.


AUD/USD has recently failed at the 200-day moving average (DMA) at 0.7551 and last week broke down further. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the aussie is set to tackle the 55-DMA at 0.7360. A break below here would open up 0.7171.


A combination of factors assisted the NZD/USD pair to attract some dip-buying near the 0.7100 mark on the first day of a new week and build on Friday’s goodish rebound from near three-week lows. Rising bets for another rate hike by the RBNZ acted as a tailwind for the kiwi and provided a goodish lift to the major amid a subdued US dollar price action.


A combination of factors failed to provide any meaningful impetus to the USD/CAD pair, instead led to a subdued/range-bound price action on the first day of a new week. Crude oil prices built on Friday’s goodish bounce from near one-month lows and edged higher for the second successive day. This, in turn, underpinned the commodity-linked loonie and acted as a headwind for the major.


The USD/CHF slides during the New York session, down 0.30%, trades around 0.9117 at the time of writing. On Wednesday, the Federal Reserve decided to keep interest rates at the 0-0.25% range, but most importantly, unveiled the bond taper process is a go, and it will start by the middle of November. Moreover, the monetary policy statement highlights that the Fed would be flexible with the pace of reductions in assets purchases, leaving the door open for a faster or slower QE’s reduction program.


Crude prices climbed by more than 2% on Friday on renewed supply concerns after OPEC+ producers rebuffed a US call to accelerate output increases even as demand nears pre-pandemic levels. On Monday, the bulls remain in control and West Texas Intermediate (WTI) crude oil has added 0.2% so far. WTI has moved from a low of $81.07 to a high of $81.75 as traders continue to price the OPEC+ Group rebuff of the US call to boost supplies beyond its schedule of 0.4-million-barrels per day monthly increases.


Gold price remains on track for additional upside, as buyers seize control above the $1,800 mark after the solid comeback seen in the previous week. The Fed’s dovish stance on interest rates hike combined with lower levels of US labor force participation bolstered gold’s upsurge. However, the latest rebound in the US dollar alongside the Treasury yields, despite the cautious risk tone, could likely threaten gold’s bullish streak ahead of Fed Chair Jerome Powell’s speech.

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