Risk Aversion Continues on China, Euro Support by Yields
| Action Insight Mid-Day Report 11-28-22 |
Risk Aversion Continues on China, Euro Support by Yields |
Risk aversion is the theme of the day as protests in China spread to multiple cities. There might be talks that pressure is mounting on the government to exit zero-Covid policy early. Investors are clearly more pessimistic on guard of escalations, which could further disrupt the economy. Australian Dollar continues to lead commodity currencies as the worst performing ones. Dollar, Yen and Swiss Franc are firm. But Euro outshines on divergence of benchmark yields with the US and the UK. Technically, EUR/CAD accelerates to as high as 1.4084 today and it's now pressing an important fibonacci level at 38.2% retracement of 1.5991 (2020 high) to 1.2867 at 1.4060. Sustained break there will add the chance of medium term bullish reversal, and target 61.8% retracement at 1.4798. In any case, near term outlook will stay bullish as long as 1.3694 resistance turned support holds. Also, if happens, further rally in EUR/CAD could help EUR/USD break through corresponding level at 1.0609. In Europe, at the time of writing, FTSE is down -0.53%. DAX is down -0.97%. CAC is down -0.96%. Germany 10-year yield is up 0.0083 at 1.985. Earlier in Asia, Nikkei dropped -0.42%. Hong Kong HSI dropped -1.57%. China Shanghai SSE dropped -0.75%. Singapore Strait Times dropped -0.14%. Japan 10-year JGB yield dropped -0.0022 to 0.258. |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0359; (P) 1.0394; (R1) 1.0433; More... EUR/USD's breach of 1.0481 resistance indicates resumption of rise from 0.9534. Intraday bias is back on the upside. Further rally should be seen to 1.0609 fibonacci level. For now, outlook will remain bullish as long as 1.0222 support holds, in case of retreat. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 00:30 | AUD | Retail Sales M/M Oct | -0.20% | 0.50% | 0.60% | | 09:00 | EUR | Eurozone M3 Money Supply Y/Y Oct | 5.10% | 6.50% | 6.30% | | 13:30 | CAD | Current Account (CAD) Q3 | -11.1B | -4.0B | 2.7B |
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