FxWirePro: Currency Weekly Outlook

US Dollar index recovered sharply more than 50 pips, hits a high of 97.75 on better than expected economic data. President Trump has been impeached by the House of Representatives yesterday for abuse of power and obstruction of Congress investigation. But markets reacted slightly positive after the impeachment especially US equity markets reached a new high previous week.

US housing data came better than expected with building permits rose 1.4% m/m at 1.4.482m in Nov vs forecast of 1.410m, housing starts at 1.365m vs 1.340m. Canadian retail sales dropped sharply by 1.2% much lower than the estimate of 0.5%, this has increased hopes of rate cut by BOC.

With Christmas holiday mood markets are expected to trade in a narrow range, major data to be focused are US Durable goods order and Canadian GDP data.

The yellow metals continue to trade bullish and surged more than $10 in the previous week, markets eye US-China trade deal for further direction. Any break beyond $1485 confirms slight bullish continuation.

US 10-year yield is trading higher for the past 3-week and jumped more than 7% from a low of 1.77%. The spread between US 10-year and 2-year has narrowed to 27.3 bps.

Weekly Technical:

EURUSD:

Major trend reversal level- 1.1216

Near term support- 1.10680/1.1000

Near term resistance – 1.1216/1.12885

USDJPY:

Major trend reversal level- 110

Near term support- 108.30/107.80

Near term resistance – 110/112

USDCHF

Major trend reversal level- 1.0030

Near term support- 0.9770/0.9715

Near term resistance – 0.9880/0.99780

USDCAD

Major trend reversal level- 1.3270

Near term support- 1.3100/1.3040

Near term resistance – 1.3185/1.3270

Gold

Major trend reversal level- $1445

Near term support- $1445/$1415

Near term resistance – $1485/$1500

WTI Crude

Major trend reversal level- $61.50

Near term support- $58.90/$57

Near term resistance – $61.50/$63.50.