Today will be a relatively quiet day in relation to the economic data releases from around the world. With the US markets having a half day due to the ongoing Thanksgiving celebrations, this means that the volatility could remain very modest.
Some European Data
This morning we have already received a few data sets of some individual states from the European continent. Norway delivered its core retail sales figure for the month of October, together with the non-seasonally adjusted unemployment rate number for November. The first set came out +1.2%, which is much better than the initial forecast of -0.1% and the previous +0.3%. The n.s.a. unemployment rate is expected to have increased from 3.5% to 4.0%, which could be a disappointment for the Norwegian economy. That said, the headline unemployment number, which was released by Norway on Wednesday, showed a slightly improvement of one tenth of a percent, which went from the 5.3% to 5.2%.
Sweden already released its Q3 GDP figures on a QoQ and YoY basis. Initially, the forecasts indicated a possible improvement in the numbers. The YoY reading was believed to have risen from-7.7% to -3.6%, but showed up even better, at -2.5%. The QoQ wass forecasted to go up from -8.3% to +4.4%. The actual number came out at +4.9%. Sweden also delivered its retail sales numbers for the month of October on a MoM and YoY basis. The two figures managed to beat their initial expectations. But only the YoY figure was better than its previous reading of +2.7%, showing up at +3.6%. Nevertheless, no major movement was seen in SEK after the data release.
Vaccine Issues
In regards to the global events, yesterday, the spotlight fell on AstraZeneca and the University of Oxford, whose vaccine efficacy results were questioned. The two parties confirmed that the announced results in the beginning of this week, were not as accurate as they initially thought to be. This was because of the inconsistency of the doses that were given to patients during the vaccine trials. Also, there were issues with how the results were interpreted, as the 90% efficacy was achieved on a group of people below the age of 55. Also, the better result was achieved from the smaller group of patients of about 2741, whereas the other group with 8895 showed only 62% efficacy. This is one of the first so-called “hiccups” in the big-pharma world, regarding the coronavirus treatment. This month we have seen other major pharmaceutical companies coming out with their vaccines, however, it is still unclear if their results could be trusted too.
Today, the Asian markets did not move much, as investors were digesting the news of the recent vaccine hiccup. It seems that market participants are waiting for the next big news in regards to the coronavirus and its vaccine. If we start seeing more headlines of increased infections across the globe and not enough of good news in relation to a possible vaccine, that’s when the equity market could turn south again.
Brexit Saga Continues
Brexit continued to be in the spotlight this whole week and yesterday it was no exception. As we have mentioned this week in our reports, fishing, governance and dispute resolution remain the biggest issues between the two sides. In fact, today, Michel Barnier is holding an urgent meeting with the EU fisheries ministers to find a possible solution on the fishing issue. Will the meeting be as productive as it is expected to be? Well, we will have to wait and see. Until then, the problem remains, and it doesn’t look like it may get sorted out any time soon.
EUR/GBP – Technical Outlook
EUR/GBP continues to form lower highs, while trading below a short-term tentative downside resistance line taken from the high of September 11th. Recently, the pair went for a lower low and got held near the 0.8865 hurdle, marked by the lows of June 2nd, 9th and by the lowest point of September. Although the current short-term trend is to the downside, we would need to see a clear move below that 0.8865 hurdle first. Hence our cautiously-bearish approach for now.
If we do see EUR/GBP moving below 0.8865 area, that would confirm a forthcoming lower low, potentially opening the door to some further declines. The rate may then drift to the 0.8825 obstacle, a break of which could set the stage for a move to the 0.87200 zone, which is the low of May 11th.
Alternatively, if the aforementioned downside line breaks and the pair climbs above the 0.9004 barrier, marked by the high of November 13th, that could change the direction of the current short-term trend and attract more buyers. EUR/GBP might travel to the 0.9070 obstacle, which is the current highest point of November, a break of which might open the door for a push towards the 0.9148 level. That level is marked by the high of October 20th.
The Crypto World
One of the main topics discussed yesterday was Bitcoin and other cryptos, which wiped out their weekly gains and around half of gains made the week before. This morning, we are seeing a rebound in the crypto world, however the biggest question on everyone’s mind is, was this a one-off a kind explosion, or will it have a continuation? For now, it is difficult to say, given that Bitcoin came very close this week to testing its all-time. Unless the crypto overcomes that barrier and goes for a higher high, that’s when we might get comfortable with the idea of a possible further upmove.
ETH/USD – Technical Outlook
From the beginning of November up until the start of this week, ETH/USD was seen exploding to the upside, following its other major counterparts. However, during the second half of this week, the crypto started selling off heavily and made its way back to its steep short-term upside support line drawn from the low of November 3rd. For now, the price continues to balance above that upside line, which supports the bullish case. That said, due to Ethereum’s proximity to that line, we will take a cautiously-bullish approach for now.
If ETH/USD continues to balance above the aforementioned upside line and then moves back above the 546.50 hurdle, marked by the high of June 19th 2018 and the low of November 23rd, that may attract more buyers back into the game. The crypto might then drift towards the 585.70 zone, a break of which could open the door for a move to the 624.50 barrier, marked by the highest point of June 2018 and near this week’s high.
Alternatively, if the previously-discussed upside line breaks and the price falls below the 487.50 area, marked by the highest point of September, that could clear the way towards lower levels. The next possible support levels we could consider might be at 438.00 and 420.50, which are marked by the low of November 15th and the high of October 22nd respectively.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.57% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.