Yesterday, the stock market went down and the spiral of risk aversion spilled over to the commodity and currency market. The sale of assets gave the impression of reducing the position before the long weekend in the face of Thursday Thanksgiving. After the Red Tuesday ended with falls on Wall Street (SP500 -1.82%), The Asian session brings some calmness: Japanese Nikkei225 ended the day with a 0.35% drop, the Chinese Shanghai Composite loses 0.1%.
On the currency market, the USD is in the correction so it most strongly reflects in NZD and AUD which fell to 0.6820 and 0.7240, respectively. GBP / USD is trying to return over 1.28. EUR / USD approaches 1.14, reflecting to 1.1355. Only USD / JPY remains relatively unchanged at 112.80.
On Wednesday, the 21st of November, the event calendar is not rich in important data releases. Only the UK will present Public Sector Net Borrowing data during the London session, then all the data will be published during the NY session: Durable Goods Orders data, Unemployment Claims and Continuing Claims data, UoM Consumer Sentiment data, Existing Home Sales data and Crude Oil Inventories data.
EUR/USD analysis for 21/11/2018:
The Durable Goods Orders data are scheduled for release at 01:30 pm GMT today and the market participants expect a decrease from 0.8% a month ago to -2.2%. Durable Goods are expected to last more than three years. Such products often require large investments and usually reflect optimism on the part of the buyer that their expenditure will be worthwhile. Because orders for goods have large sway over the actual production, this figure serves as an excellent forecast of US output to come. Durable Goods are typically sensitive to economic changes. When consumers become skeptical about economic conditions, sales of durable goods are one of the first to be impacted since consumers can delay purchases of durable items, like cars and televisions, only spending money on necessities in times of economic hardship. Conversely, when consumer confidence is restored, orders for durable goods rebound quickly.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market bounced from the technical support at the level of 1.1359 and now the price is heading towards the level of 1.1400 which is a local technical resistance. The golden trend line support is still not hit wich so far is a good indication of the possibility of another leg up towards the level of 1.1456. The momentum bouncing slightly from its neutral level as well, but the stochastic is still pointing to the south, so there is no clear signal here. The key short-term support zone is seen between the levels of 1.1359 - 1.1335.
