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Currencies & Possibility of Thanksgiving Breakouts (charts)

  • Kathy Lien
  • 27 November 2019

 

 

Daily FX Market Roundup 11.26.19

 

By Kathy Lien, Managing Director of FX Strategy for BK Asset Management

 

It is a holiday week here in the United States and today's muted moves has investors looking forward to a quiet rest of the week for currencies. The forex market will trade continuously over the next few days but the equity and bond markets in the U.S. will be closed on Thursday with a half day on Friday. However with President Trump expected to make a decision on the HK bill and trade headlines ramping up, we would not be surprised if low liquidity during the holidays led to an expansion in volatility. In fact, currencies actually have a history of breaking out or reaching new milestones the week of Thanksgiving. Just take a look at the charts below.

 

In 2017 EUR/USD and GBP/USD hit a 1 month high Thanksgiving day while USD/JPY fell to a 2 month low the day before Thanksgiving. In 2016, the EUR/USD dropped to an 11 month low the week of Thanksgiving while USD/JPY rose to a 7 month high. There was no meaningful movement in sterling that year. In 2015, EUR/USD and GBP/USD fell to a 7-month low the week of Thanksgiving as USD/JPY consolidated. In most cases, the trend that was in place immediately before the holidays continued. No major milestones was reached in 2018 but if there's a breakthrough on trade, we could see USD/JPY hit fresh 5 month highs above 109.50 and EURUSD slip to 1 month lows below 1.10. Risk appetite remains bid as Trump said today the US and China are nearing a trade deal but he wants to see things go well in HK.

 

Fundamentally, there's not much on the US calendar but nothing matters more than the headlines. The euro and Canadian dollar will be in focus with confidence and labor market numbers scheduled for release from the Eurozone and GDP numbers from Canada Thursday and Friday. Comments from Reserve Bank of New Zealand Governor Orr could also inspire a big move in the New Zealand dollar. NZD was the best performer today thanks to strong retail sales - spending grew 3 times more than expected in the third quarter.

 

 

 

 

 

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About the Author
Kathy Lien
Kathy Lien is Managing Director and Founding Partner of BKForex. Having graduated New York University’s Stern School of Business at the age of 18, Ms. Kathy Lien has more than 13 years of experience in the financial markets with a specific focus on currencies

Ms. Kathy Lien is Managing Director of FX Strategy for BK Asset Management and Co-Founder of BKForex.com. Her career started at JPMorgan Chase where she worked on the interbank FX trading desk making markets in foreign exchange and later in the cross markets proprietary trading group where she traded FX spot, options, interest rate derivatives, bonds, equities, and futures.

In 2003, Kathy joined FXCM and started DailyFX.com, a leading online foreign exchange research portal. As Chief Strategist, she managed a team of analysts dedicated to providing research and commentary on the foreign exchange market.

In 2008, Kathy joined Global Futures & Forex Ltd as Director of Currency Research where she provided research and analysis to clients and managed a global foreign exchange analysis team. As an expert on G20 currencies, Kathy is often quoted in the Wall Street Journal, Reuters, Bloomberg, Marketwatch, Associated Press, AAP, UK Telegraph, Sydney Morning Herald and other leading news publications.

She also appears regularly on CNBC’s US, Asia and Europe and on Sky Business. Kathy is an internationally published author of the bestselling book Day Trading and Swing Trading the Currency Market as well as The Little Book of Currency Trading and Millionaire Traders: How Everyday People Beat Wall Street at its Own Game all published through Wiley. Kathy’s extensive experience in developing trading strategies using cross markets analysis and her edge in predicting economic surprises serve key components of BK’s analytic techniques.