Intraday Forex Friday, November 26 (EURUSD, USDJPY, etc). Dollar headed for weekly gain. New virus variant spooks market.


Hi everyone. This observation is made around 06:45 UTC today, with 30 minutes time frames. The Resistance and Support Line were constructed according to Fibonacci retrenchment. Any discussion is welcomed.

Investors scurried toward safe-haven, on fears over a new COVID-19 variant with many mutation found in South Africa.
The variant, called B.1.1.529, has been detected in South Africa in small numbers, according to the WHO.

The dollar headed for weekly gains against most major currencies, on a hawkish tilt from U.S. Federal Reserve policymakers.

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  • The euro rose 0.16% to $1.12239, stabilizing after hitting its lowest level in nearly 17 months earlier in the week at $1.11863. The pair is now headed for 0.65% weekly losses.​
  • The euro rebounded above 1.1200 in what seems to be a technical correction of this week's decline. Markets are likely to remain calm for the remainder of the day due to the Thanksgiving holiday in the US and the shared currency could stay resilient against the greenback.​
  • Concern of recent surge in COVID-19 infections in Europe that lead to additional restrictions continue to weigh on EUR/USD.​
  • The greenback meanwhile was supported amid expectations for a faster tapering process and possible rate hikes by the Fed compared to the ECB. Overnight, minutes from the ECB's October meeting showed most policymakers leaning toward continued stimulus and a cautious approach to any policy changes, despite the pressure from heated inflation.​
  • The EUR/USD has stalled at the 1.119 support line and appears to be making a bullish recovery. Small-bodied candles reflect low conviction, and more support will be required to facilitate a rally.​
Important Levels to Watch for Today:​
  • Resistance line of 1.13150 and 1.13765.​
  • Support line of 1.11920 and 1.11305.​

  • The yen leapt as much as 0.66% to 114.542 per dollar, as concern flared about the B.1.1.529 variant, which might make vaccines less effective.​
  • The dollar, however, was still headed to more than 1.2% weekly gains against the Japanese yen.​
  • Divergent central bank policies continue to undercut the yen. The greenback was supported throughout this week after several U.S. Fed policymakers have said in recent days that they would be open to speeding up the tapering of the central bank's bond-buying programme if the high rate of inflation held, and move more quickly to raise interest rates, an action that is faster compared with the BoJ.​
  • If the COVID situation worsens, then dollar-yen could go down further, but otherwise the monetary policy divergence is definitely going to be weighing on the yen in the medium term.​
Important Levels to Watch for Today:​
  • Resistance line of 115.097 and 115.636.​
  • Support line of 113.353 and 112.814.​

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