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Euro edges higher in APAC trading

The EURUSD pair closed slightly higher on Thursday, November 25, up by 0.09% to 1.1209. Buyers jumped in around 1.1185 and pushed the price up to 1.1229.

Market participants reacted sluggishly to the release of the latest ECB minutes. Price action rebounded to 1.1205 by the close on the back of holiday-muted volumes (Thanksgiving Day stateside).

Today’s macro agenda (GMT+3) 

  • 11:00 Switzerland: 3Q GDP
  • 11:00 ECB President Christine Lagarde speech
  • 12:00 Eurozone: loans to households and companies (October)
  • 14:00 UK: CBI distributive trades (November)
  • 16:00 EU: BoE MPC member Pill

Current outlook

Major currencies have been showing mixed performance in APAC trading. The yen (+0.74%), the franc (+0.53%) and the euro (+0.16%) are trading in positive territory. The aussie dollar fell 0.78%, the loonie and the kiwi dollars are off 0.60%, while oil is down 2.92%.

Risk aversion has taken hold in the markets. Investors are spooked by news that the WHO convened a special meeting to discuss a new variant of the coronavirus and confirm its status. This is a version of the B virus, 1.1.529, which was identified in South Africa. It has 32 mutations in the spike protein and could be vaccine resistant.

British and Israeli authorities have imposed restrictions on flights from several countries in Southern African countries after the discovery of the new Covid strain. The authorities of other countries are silent.

Experts write that for now "there is no cause for concern", since the unprecedented number of mutations could make the strain "unstable" and prevent it from spreading widely.

Today’s economic calendar is essentially a blank slate. The lineup of speakers includes ECB President Christine Lagarde. She has delivered so many speeches over the past two weeks that she could hardly move the markets.

Technical analysis

The euro has depreciated 0.52% against the dollar since the beginning of the week. By the time of writing, the euro was trading at 1.1229. The TF of the price action pattern looks favorable due to a rise in the EURUSD pair. That said, we are doubtful that the key pair will lock in gains at the end of the week due to a decline in the AUDUSD and NZDUSD pairs.

Resistance is located in the range of 1.1230-1.1238. Buyers could draw support from the softer UST10Y yield, which dropped to 1.511 (-6.3%) since the opening. Gold may also brush off news about the coronavirus and trade higher due to lower UST yields.

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