November 26, 2021 12:10:14
Safe havens are soaring and risk assets tanking on Black Friday. It’s an early close in the US for major markets so volumes are less than normal as traders take an extended Thanksgiving break. This will potentially exacerbate price action.
Any new information on the spread of variant will be the main driver for markets. The potential to evade current vaccines is crucial going forward. Weekend gap risk is high. Essentially, this means any news over the weekend may see prices open alot higher or lower than their Friday close.
EUR/JPY pulls back from support
This pair has dropped sharply since hitting highs in late October at 133.48. Last Friday saw prices tumble to 127.97. This level is just shy of the support zone around the August and September lows at 127.93.
A mild correction took us back to a Fib level at 129.24. But the medium-term downtrend kicked in again with the fall today again taking us near to the summer support area. If we can break this, next support comes in at 127.49 and 127.07. Buyers will need to get above 130 to change the bearish momentum.
NZD/JPY sinks below 200-day SMA
This cross is very much a “risk-on/off” currency pair. After topping out at 82.50, prices have fallen steadily in a bearish channel. Sellers took out the 50-day SMA a couple of days ago.
Today’s plunge has broken through the 100-day and 200-day SMAs. The latter becomes initial resistance to a correction at 78.10. The midpoint of the August to October move sits at 78.53. Downside levels if the risk mood continues to sour include 76.33/43.
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