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Currencies

The Dollar's Mixed Performance as North American Session Begins

2024-11-21

As the North American session commences, the dollar finds itself in a state of mixed fortunes. The USDJPY has dipped by approximately 0.60%, emerging as the most significant mover of the day. Simultaneously, the EURUSD has also shown a downward trend following a failed attempt at a higher move ahead of the 100-hour MA resistance target. The GBPUSD too is on a downward path with the USD showing an upward trend. Despite this, the DXY dollar index remains nearly unchanged at -0.04% overall. Let's take a closer look at the technicals of some major currency pairs against the USD.

Unraveling the Dollar's Dance in the North American Session

US Yields and Fed Speeches

The US yields start the trading day with little change. Yesterday, the US treasury auction of 20-year bonds faced poor demand. Fed's Collins adopted a more bearish stance. Overnight, Fed's Barkin emphasized not wanting to prejudge the December meeting, while Fed's Williams remained confident about the continuation of disinflationary moves but highlighted the strength of the labor market and the economy.

This indicates the complex interplay between the bond market and the Federal Reserve's policies, influencing the overall economic sentiment.

Such fluctuations in yields and Fed statements have a significant impact on various asset classes, including the dollar and other currencies.

Bitcoin and Crude Oil

Bitcoin is trading at $97500, showing an increase of $3100 on the day and getting closer to the $100K mark. Crude oil has also witnessed a rise and is back above $70 at $70.03.

The upward movement in Bitcoin reflects the growing interest and confidence in the cryptocurrency market.

Crude oil's resurgence is likely influenced by various global factors such as supply and demand dynamics and geopolitical events.

US Stock Futures and Nvidia Shares

US stock futures are indicating a higher open. Nvidia shares are trading near unchanged after initially falling following earnings. Although the earnings beat expectations, it wasn't by a significant margin. As a result, the price is back trading near unchanged on the day. The major indices closed mixed yesterday, with the Dow rising 139 points or 0.22%, the S&P closing unchanged, and the Nasdaq falling -21.32 points or -0.11% due to a late-day rally ahead of Nvidia earnings.

The performance of US stock futures and individual stocks like Nvidia provides insights into the market's sentiment and the impact of specific company events.

The mixed closing of major indices highlights the volatility and uncertainty in the stock market.

European Major Indices

European major indices are rebounding, with the German Dax looking to snap a 4-day slide. The German Dax is up 0.42%, France's CAC is down -0.11%, the UK FTSE 100 is up 0.40%, and Spain's Ibex is up 0.25%.

The rebound in European indices indicates a potential shift in market trends and investor sentiment.

Differences in the performance of individual European indices reflect the diverse economic and market conditions across the continent.

Technical Analysis of Major Currency Pairs

EURUSD: Yesterday, the EURUSD traded within the weekly range. It extended below the Tuesday low at 1.0523 and broke the Friday low at 1.05158, reaching a low at 1.0506. However, it still remained above the all-time low at 1.04956. To add to the bearish bias, it needs to stay below these lows. Today, the price moved higher in the Asian Pacific session but fell short of the 100-hour MA above at 1.05612. Getting above this level is crucial for the buyers to regain control.

The technical analysis of the EURUSD shows the ongoing battle between buyers and sellers and the significance of key moving averages in determining the currency pair's direction.

Even a small break above or below these levels can have a significant impact on the market sentiment and the currency pair's future走势.

USDJPY: The USDJPY moved higher yesterday and broke above the 100-hour MA. Later, it tested the 100-hour MA and bounced, indicating that the buyers were in control. Today, the price moved lower in the Asian Pacific session and bounced again, but the 100 and 200-hour MAs were broken. If the price stays below these two MAs at 154.79 and 154.86 currently, the sellers will be in control. Conversely, if the price moves above these MAs, the buyers will take back control. A target on the downside that traders will be eyeing is 153.88, which is the near highs from October 28 and 29 and was near swing levels on November 11, 15, and 18.

The movement of the USDJPY highlights the importance of short-term moving averages in gauging the market sentiment and potential price movements.

Traders closely monitor these levels to make informed decisions about their positions in the currency pair.

GBPUSD: The GBPUSD moved higher yesterday and tested the high from last Thursday's trading but fell short. Buyers turned to sellers with the rise in the USD, and the 100-hour MA was broken. In today's trading, the 100-hour MA has stalled the price rises, with small breaks but lacking momentum. The price moved to a low of 1.2622, which was below yesterday's low at 1.2630 but above the lows from Tuesday and Monday near 1.2613. Close resistance will be eyed at the 100-hour moving average at 1.26532. On the downside, getting below 1.2613 and then the low price from last week at 1.2596 would take the price to the lowest level since May.

The GBPUSD's performance showcases the sensitivity of the currency pair to changes in the USD and the significance of key moving averages in determining its price movements.

Traders need to pay close attention to these levels to anticipate potential price reversals or continuations.

USDCHF: The USDCHF held resistance at the 100-hour moving average yesterday and support against its 200-hour moving average. Today in the early Asian hours, the price broke below the 200-hour moving average and continued down toward the next target at the 200-day moving average at 0.88199. Support buyers leaned against the moving average, and the price bounced back higher but found resistance against its 200-hour moving average, which is now near converged with the 100-hour moving years near 0.8845. The price has moved back lower. The 200-day MA is key support at 0.88199, and the 100 and 200-hour MAs form key resistance at the 0.8845 area. A move below or above these levels should see more momentum in the direction of the break.

The technical analysis of the USDCHF reveals the complex interplay between different moving averages and the potential for significant price movements.

Traders need to be vigilant and adapt their strategies based on these technical levels.

The University of Virginia's recent announcement of its sixth university-level institution has sparked significant interest. Leaders from Albemarle County were drawn to the Rotunda Room, where the UVA National Security Data and Policy Institute's founding director, Phil Potter, acknowledged personnel from Rivanna Station in Albemarle County, which is the U.S. Army National Ground Intelligence Center. Albemarle County's purchase of 426 acres of land, named Rivanna Station Futures, is for the expansion of military and intelligence operations. County Executive Jeff Richardson, along with Deputy County Executive Trevor Henry and Economic Development Director Emily Kilroy, attended the ribbon-cutting ceremony.

Aligning for Future Success

Richardson informed CvilleRightNow that the county is actively collaborating with the federal and state governments, as well as the University of Virginia. They are all working towards finding the appropriate level of alignment for Rivanna Station to ensure its future success. While formulating the Rivanna Station Futures plan, the county was not initially aware of these new institute efforts. However, this new UVA initiative has brought more attention to the proximity of Charlottesville to DC, facilitating federal government support. Richardson and Potter both emphasize that this area is conveniently close for a daytrip to and from the DC area while being far enough away from the Beltway noise. They envision Rivanna Station Futures housing various entities such as academic institutions, private partners, or federal government DOD agencies. The UVA and DOD ventures are the two top industry employers in the Charlottesville-Albemarle area.

Expanding Military and Intelligence Operations

The acquisition of 426 acres of land by Albemarle County for Rivanna Station Futures marks a significant step in expanding military and intelligence operations. This expansion not only provides a dedicated space for these activities but also creates opportunities for collaboration between different entities. The U.S. Army National Ground Intelligence Center's presence at Rivanna Station adds to the strategic importance of the area. It allows for the integration of advanced data and policy research, enhancing the capabilities of both the military and intelligence sectors. The proximity to Charlottesville and its proximity to DC also offer unique advantages, enabling seamless communication and cooperation between different levels of government and institutions.

Attracting Federal Government Support

The establishment of the UVA National Security Data and Policy Institute and the expansion of Rivanna Station have attracted significant attention from the federal government. The close proximity to DC makes it easier for federal agencies to provide support and collaborate with local institutions. This not only benefits the military and intelligence operations at Rivanna Station but also contributes to the overall economic development of the Charlottesville-Albemarle area. The presence of top industry employers like the UVA and DOD ventures creates a vibrant ecosystem that attracts other businesses and investments. It showcases the region's potential and positions it as a hub for national security-related activities.

Potential for Diverse Partnerships

Rivanna Station Futures holds the potential for diverse partnerships between academic institutions, private companies, and federal government agencies. The collaboration between the University of Virginia and the U.S. Army National Ground Intelligence Center can lead to groundbreaking research and innovation. Private partners can bring in their expertise and resources, further enhancing the capabilities of the operations at Rivanna Station. Federal government DOD agencies can benefit from the academic research and expertise available at UVA, while also providing practical applications and funding opportunities. This diverse range of partnerships can create a mutually beneficial environment that drives growth and development in the area.

On Tuesday night, U.S. stock futures showed only minor changes as traders eagerly await the release of the Federal Reserve's preferred inflation gauge. Futures linked to the Dow Jones Industrial Average saw an increase of 24 points, equivalent to 0.05%. Meanwhile, S&P 500 futures hovered near the flatline, and Nasdaq-100 futures declined by 0.06%. In the corporate world, several companies disclosed their quarterly results. Dell Technologies experienced a significant drop of 11% in extended trading due to a disappointing forecast for the current quarter. The company reported $24.37 billion in revenue for the fiscal third quarter, which was lower than the $24.67 billion expected by analysts. However, adjusted earnings surpassed Wall Street's expectations.Looking ahead to Wednesday, the personal consumption expenditures price index (PCE) is scheduled for release at 10:00 a.m. ET. Economists polled by Dow Jones anticipate a year-over-year increase of 2.8% for the core reading, which excludes food and energy. Investors will closely examine the data to gain insights into the Fed's rate policy decisions at its December meeting.Indeed, the Fed released the minutes from its November meeting on Tuesday. Central bank officials indicated that they expect more interest rate cuts in the future but emphasized that the pace of cuts will be gradual. Stephen Stanley, Santander U.S. Capital Markets chief U.S. economist, told CNBC's "Power Lunch" that he believes the Fed will cut rates again in December. He believes that the Fed still has some distance to reach neutral and wants to make further progress on rate adjustments.Other important data to be released on Wednesday includes personal income and consumer spending for October, which is also scheduled at 10:00 a.m. ET.This is a shortened trading week in the U.S., with the market closed on Thanksgiving Day on Thursday and set to close early on Friday. Trading volume is expected to remain relatively low. Despite this, stocks ended the day in the green across the three major averages. Both the S&P 500 and the Dow reached new intraday and closing highs.The Russell 2000 had a less-than-stellar session on Tuesday as it ended a six-day winning streak. The small-cap index lagged behind the three major averages, falling by about 0.7%, while the S&P 500 and the Dow Jones Industrial Average reached new record closes. However, the Russell 2000 is having a strong November as investors have been buying cyclical stocks since Donald Trump won a second term in the White House earlier this month. The Russell is on track for a 10.4% increase this month, outperforming the 5.5% gain of the S&P 500 and the 7.4% jump of the Dow.Some stocks are making significant moves in extended trading. Dell Technologies' stock tumbled more than 10% after reporting weaker-than-expected revenue for the fiscal third quarter. HP's shares slid 7% after providing weaker-than-expected earnings guidance for its fiscal 2025 first quarter. Workday's stock also dropped 10% after announcing that its subscription revenues and operating margin for the fourth quarter will be lower than expected.Stock futures opened with little change on Tuesday evening. Futures tied to the Dow Jones Industrial Average gained 20 points, or 0.04%. S&P 500 futures also rose by 0.04%, while Nasdaq-100 futures fell by 0.03%.For more information and the full list of stock movements, please read here.