Considering the timing and circumstance, I wouldn’t read too much into the moves we’re seeing today. Not only is it month-end but also liquidity conditions are more sapped amid the Thanksgiving holiday break. Sure, US markets are open for a half-day today but it doesn’t take away from the fact that most flows will have already been settled before yesterday.
So far today, the dollar is keeping slightly firmer with EUR/USD down 0.3% to 1.1558 and GBP/USD down 0.2% to near the 1.3200 mark. The former is tripping lower after four consecutive days of gains with the drop today nearly halving the declines. That sees the pair now fall back to test its 200-hour moving average (blue line) as seen below:
Keep above and the near-term bias holds more neutral but break below and the near-term bias turns to being more bearish instead. The price action argues that despite the dollar’s struggles earlier this week, there’s still some potential for a bounce back to close things out before December trading begins next week.
The same applies for USD/JPY as the pair continues to knock on the door of key near-term levels:
After a drop back under the 100-hour moving average (red line) last week, dollar buyers are trying to push back against that level all through trading this week. They haven’t quite found that breakthrough but if they can get above that and the 200-hour moving average (blue line) nearby, that will see the near-term bias switch back to being more bullish.
That especially with the Japanese yen continuing to be pressured from Takaichi’s fiscal policy and lack of boldness by the BOJ.
Besides that, AUD/USD is also down 0.1% today to 0.6525 in keeping just under its 100-day moving average of 0.6531. Meanwhile, NZD/USD is down 0.4% to 0.5707 as the jump higher from the post-RBNZ rally cools a little. That said, the pair continues to keep a break above the mid-November highs around 0.5691 and that is keeping the upside bias in ending this month for now.
This article was written by Justin Low at investinglive.com.