David Long

November Market Overview

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Monthly Currency Trading News

$Us Dollar: The month started with greatly improved Non-Farm Employment Change, increased Unemployment Claims with Unemployment Rate down from 5.1 to 5%. Average hourly earnings m/m increased 0.4% which doubled the expectations. ISM manufacturing and non-manufacturing PMI came above expectations, ADP Non-Farm below, followed by improved Trade Balance. Second week brought disappointing PPI m/m, Core Retail Sales m/m and Retail Sales m/m which followed by improved UoM Consumer Confidence. CPI m/m, Core CPI m/m and Building Permits came as expected. FOMC minutes confirmed the committee expects to increase the interest rates in December. This was followed by Fed announcement on 24 November confirming the same. Filly Fed Manufacturing Index and Preliminary GDP q/q came above expectations, Unemployment Claims below. CB Consumer Confidence fell below expectations. Forth week brought improved Core Durable Goods Orders m/m and much reduced Unemployment Claims.

CNY: The month started with unchanged China Manufacturing PMI but slightly below expectations, and well improved Caixing Manufacturing PMI. Second week brought Trade Balance well above expectations and disappointing CPI y/y. Second half of the month saw reduced Industrial Production y/y. The main news is that Chinese Yuan is joining the Selected IMF Currency Basket used as yardstick along Dollar, Euro, Pound and Yen.

EurUsd: The Euro remained under pressure due to the strengthening of US Dollar and ECB Mario Draghi stating that economic risk to currency block are ‘clearly visible’ and that policy makers’ asset purchase plan will be extended if needed to reach their inflation goal. German Preliminary GDP q/q reduced as expected while Zew Economic Sentiment came well above expectations. Second half of the month saw French and German Flash Manufacturing PMI improved above expectations as did German Info Business Climate.  ECB Financial Stability review report for November 2015 points out that the Euro area financial system weathered challenges on several fronts in second half of the year outlining the four key risks to financial stability at play.

Hammered by aggressive selling due to the strength of the $US and Draghi’s comments to expand their QE asset purchasing program as needed, EurUsd broke through 1.06 support. Note boolish divergence on MACD and Stochastic.


GbpUsd: Manufacturing, Manufacturing Production m/m and Services PMI came above expectations, Construction PMI below. BOE kept interest rates on hold and lowered the forecast for near term inflation. Second week followed with disappointing Average Earnings Index 3m/y and Claimant Count Change. CPI y/y came unchanged as expected but Retail Sales were disappointing.


On the strength of $US Pound is retesting 1.5 support. Hidden Bearish Divergence on the Stochastic Oscilator, double bottom.


AudUsd: The month started with much improved Building Approvals. Interest Rates remained on hold. Retail sales came unchanged as expected which was followed by improved Trade Balance. Employment Change came well above expectation and Unemployment Rate reduced to 5.9%. The month ended with disappointing Private Capital Expenditure q/q.

AudUsd broke out of the triangle to the up through the monthly trendline and is retesting 15 year trendline and the all-time 61.8 Fib support level.


UsdCad: The month started with improved Trade Balance and Employment change, while Unemployment Rate down to 7%. Second half of the month brought disappointing Manufacturing Sales m/m and Core Retail Sales m/m while Core CPI m/m came slightly improved.


UsdCad is stuck in the nose of the triangle, best to wait for the breakout before the next move.


Month ahead in the News

Lots of news in the coming week and busy session expected before the quiet time over the Christmas Break. ECB meeting on 3 December and Yellen testifies to Congress ahead of Jobs data this week.

USD: All Eyes are on the FOMC Interest Rate announcement 17 December. It is widely expected that Fed will increase the Interest Rates. The usual main economic data,  ADP Non-Farm Employment Change, Non-Farm Employment Change, Trade Balance, Unemployment Claims, Unemployment Rate and FOMC Economic projections.

CNY: Manufacturing PMI, Caixin Manufacturing PMI, Trade Balance, CPI y/y; EUR:  Min Bid Rate, Targeted LTRO, German Zew Economic Sentiment, German Ifo Business Climate, French and German Flash Manufacturing PMI; GBP: Manufacturing, Construction and Services PMI, Official Bank Rate; CPI y/y, Average Earnings Index 3m/y, Claimant Count Change,  CPI y/y and Retail Sales;  AUD: Mid-year Economic and Fiscal Outlook, Cash Rate, GDP q/q, Trade Balance, Retail Sales, Employment Change and Unemployment rate; CAD: Overnight Rate, Trade Balance, Employment Change, Unemployment Rate, Building Permits m/m, Manufacturing Sales m/m, Core CPI m/m, GDP m/m; NZD: GDT Price Index, Official Cash Rate, GDP q/q, Trade Balance.

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