LiveWire

The EURUSD has risen significantly since mid-September led by the dollar losing around 6%. Looking at technicals, the EURUSD could reach 1.0465 in the short term, and a daily close above it should be encouraging for more upside potential. 

The euro-dollar index has fallen about 2% from its three-month peak recorded last week, with market activity indicating that the EUR may suffer further losses. With prices now trading below the 2.025 support level, EUR bears are expected to seek a retest of the 1.01 level.

The S&P500 could see higher volatility upon the release of the November FOMC meeting minutes on Wednesday, which should offer insights into how the Fed is thinking about the path of rate increases. Tech companies HP and Dell (today in after-hours) will report earnings, offering a glimpse of the state of demand for PCs. And retailers Best Buy and Dollar Tree will report earnings, ahead of "Black Friday", which is historically one of the year's biggest shopping days. This morning S&P500 futures are lower as the number of China Covid cases jumped over the weekend, worrying traders about the global growth outlook. 

Chancellor Jeremy Hunt will speak today, facing the difficult task of reassuring markets that he can stabilizee public finances without devastating damage to the UK economy. Britons are already facing a record squeeze on living standards and seeing turbulence in public services such as the NHS would make things worse. Nonetheless, a look at the strong momentum in the GBPUSD tells an encouraging story, with an optimistic outlook on the new UK leadership. But could GBPUSD break the psychological level of 1.20? That level was tested on Wednesday and rejected lower. But traders should prepare in case the outlook improves. A decisive break above 1.20, could see the pair visit 1.2250 again. 

Recent dollar weakness has given the euro a strong relief rally. But also the improving Russia-Ukraine situation which is showing signs of not escalating as previously feared. The energy situation in Europe is also not as dramatic as previously feared. More importantly to watch, are signs that the economic slowdown will not meaningfully deteriorate in Europe, leading to the ECB to ease monetary policy again, which would weigh on the euro. Looking at the technical picture, as long as the EURUSD remains above 1.0360 its positive momentum remains intact.