Following the worse than expected retail sales numbers in the morning, GBP struggled throughout Friday's trading session, finishing mostly lower across the board. USD came under pressure going into the evening, with the USD index finishing at a new 2-month low. EUR remained strong, with inflation numbers coming in line with expectations and credit rating agency Moody’s raising their outlook on Italian debt from negative to stable.
* Daily move - against G10 rates at 7:30am, 20.11.23
** Indicative rates - interbank rates at 7:30am, 20.11.23
USD has started the week lower, with EURUSD hitting a new two-month high and coming into a strong level of resistance, meaning additional gains could well be limited on the pair. The week itself could prove to be less volatile from last week, given the US will be closed for Thanksgiving on Thursday and then partially closed on Friday. Tomorrow's FOMC minutes could be pivotal for USD, to see how Fed members discussed their recent interest rate decision. On Wednesday we have the UK Autumn Budget, where Jeremy Hunt is set to reveal plans to cut the UK’s tax burden. Over Thursday and Friday we have November PMI numbers from UK, EU, and US.
EURUSD has enjoyed an almost 5% run since the start of the October, as a combination of US treasury yields tracking lower as well as broader risk on sentiment in markets. However, further gains could well be limited if we look at things from a technical perspective. Firstly, current rates are fast approaching a strong level of resistance marked from the levels seen in August/September. Secondly, the relative strength indicator (RSI) has now moved about the 70 mark, which highlights that the currency pair is now relatively overbought. Should both these technical points play out, then we could well be seeing the top end of rates on EURUSD.
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