In investing what is comfortable is rarely profitable.
USD
EUR/USD
The common currency nosedived to a 16-month low at $1.1250 last Friday on growing anxiety over the impact of surging COVID-19 infections in Europe, with Austria reimposing a complete lockdown and Germany considering following suit.
GBP/USD
The cable tumbled to $1.3442 on Brexit woes as the European Commission Vice President Šefčovič accused the UK Brexit Minister Frost of 'political posturing' over the Northern Ireland protocol, citing more urgency required in negotiations.
USD/JPY
The Japanese yen plunged to 114.14 per dollar, on broad dollar strength as Federal Reserve officials Clarida and Waller on Friday suggested a faster pace of stimulus tapering may be appropriate amid a quickening recovery and heated inflation.
USD/CAD
The commodity-linked Loonie cascaded to 1.2640 per dollar, pressured by a slump in crude oil as a slowdown in Europe could hit energy demand dented crude oil.
AUD/USD
The Aussie recovered from $0.7225 to $0.7250 despite Fed's hawkish expectations heading into this week's FOMC minutes.
USD/ZAR
The South African rand fell to 15.72 against the greenback as S&P's non-review of credit rating indicated that South Africa remained on BB-rating with a stable outlook.
USD/MUR
The dollar-rupee soared to 43.42(selling) on the local market.
12:30 - GBP - Composite PMI(Oct)
19:00 - USD - Existing Home Sales (Oct)
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
