· Dollar loses some bounce as focus shifts to Fed
An under pressure U.S. dollar handed back part of its month-end bounce on Tuesday, as investors reckoned on more monetary easing by the Federal Reserve and a gathering recovery elsewhere.
The risk-sensitive Australian and New Zealand dollars edged higher, with the Aussie up 0.3% and the kiwi up 0.5%. The euro rose 0.3%, though all three currencies remained below where they sat before Monday’s dollar bounce.
Sterling crept higher as traders clung to hopes for a Brexit trade deal before the year’s end and the yen edged down to a week low as equities rose with the broadly upbeat mood.
Investors are heavily short dollars as optimism about promising vaccine trials drives buying of riskier currencies and higher yielding assets outside the United States.
Even worries about rising coronavirus cases have not offered too much support to the greenback, as speculation grows that the Federal Reserve might act to support the economy through a tough winter before vaccinations can turn the tide on the pandemic.
Against a basket of currencies the dollar was a fraction softer at 91.825, after struggling to find traction above 92.000 on Monday.
Elsewhere in Asia, the Chinese yuan was back on the front foot – holding firm onshore and snapping three sessions of losses in offshore trade after decade-high factory activity growth figures underscored China’s remarkable recovery.
It last traded at 6.5751 per dollar onshore.
The Reserve Bank of Australia, meanwhile, left policy settings unchanged on Tuesday, as expected.
Governor Philip Lowe’s statement was cautiously optimistic but said it would take until the end of next year for gross domestic product to recover 2019 levels and emphasized that the rebound’s momentum depended on policy support.
FED in Focus
The Fed meets to set policy on Dec. 15 and 16, though before then – on Tuesday and Wednesday – Fed Chair Jerome Powell will appear before Congress and his remarks will be closely watched for any clues as to the next moves.
The policymakers gather as authorities mull approving two effective vaccines, developed by Pfizer and Moderna for distribution, while at the same time surging virus cases have put the brakes on the U.S. economic recovery.
Powell, in prepared remarks released on Monday, said a “challenging” few months lie ahead and that it is difficult to assess the economic implications of vaccine developments yet.
“A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities,” he said.
· BITCOIN The Bullish Megaphone worked and shows $21000 next!
The Bullish Megaphone I posted on my last analysis seems to have best captured Bitcoin's current rebound:
*The Double Top*
The price managed to keep the 4H MA200 (orange trend-line) intact and rebounded exactly on the Higher Lows trend-line. So far it hasn't only crossed above the 4H MA50 (blue trend-line), but is about to test the November 24/25 19450 High. Even if that is a Double Top , the price action within this Megaphone has showed that the 4H MA50 is always there to support wide Double Tops (not narrow such as the November 24-25).
*The RSI*
So if this Resistance breaks, what's next? According to this pattern (others show slight variations) we target $21000. Keep an eye on the RSI which (on this 4H chart) is being rejected on a Lower Highs trend-line, but that doesn't necessarily mean that a rejection will be the Megaphones top. As with the November 18 RSI High, the price didn't make a Top, it made a High and then it slowed down to a more stable Higher Highs/ Higher Lows sequence. So in essence the RSI making a new top on the Lower Highs trend-line may just show tha the trend could slow down and on a lower pace rise towards 21k . Which won't be abnormal as so far the rise from the November 26 bottom of the Megaphone has been very aggressive.
*The 1.000 Fibonacci extension*
So why $21000 in particular? This is due to an underlying Fibonacci sequence within the Megaphone. As you see every time BTC touches the Top of the Megaphone, it is roughly on the 1.000 Fibonacci extension from the previous High (bottom on the measurement being of course the last price contact on the Higher Lows trend-line of the Megaphone). And that Fibonacci extension is around $21000 next.
· Biden to introduce top economic advisers as pandemic threat worsens
U.S. President-elect Joe Biden will formally introduce his top economic policy advisers on Tuesday as his administration prepares to take power amid a slowing economic recovery hampered by the resurgent coronavirus pandemic.
Biden will appear at an event in his hometown of Wilmington, Delaware, alongside his selections for senior roles, including his nominee for U.S. Treasury secretary, former Federal Reserve Chair Janet Yellen.
The team’s makeup reinforces Biden’s view that a more aggressive approach to the pandemic is required. The advisers have all expressed support for government stimulus to maximize employment, reduce economic inequality and help women and minorities, who have been disproportionately hurt by the economic downturn.
Other picks include Cecilia Rouse, an economist at Princeton University, as chair of the Council of Economic Advisers; economists Heather Boushey and Jared Bernstein as council members; and Neera Tanden, chief executive of the liberal Center for American Progress think tank, as head of the Office of Management and Budget.
· CORONAVIRUS UPDATES:
Global Cases: 63.63M
Global Deaths: 1.47M
U.S. Cases: 13.92M
U.S. Deaths: 274,332
· Moderna files for U.S. vaccine authorization, will seek EU nod
Moderna Inc said on Monday it has applied for U.S. emergency authorization for its COVID-19 vaccine after full results from a late-stage study showed it was 94.1% effective with no serious safety concerns.
· California at COVID-19 'tipping point' as Trump administration hopes for vaccines by ChristmasCalifornia’s governor said on Monday the state was at a “tipping point” in the COVID-19 pandemic that would soon overwhelm hospitals as political leaders nationwide turn to increasingly aggressive measures to hold back the latest surge.
· Wisconsin confirms result handing state's presidential contest to Biden
· COVID-19 drives 40% spike in number of people needing humanitarian aid, U.N. says
The COVID-19 pandemic has fueled a 40% increase in the number of people needing humanitarian assistance around the globe, the United Nations said on Tuesday, as it appealed for roughly $35 billion to help many of those expected to be in need next year.
“If everyone who will need humanitarian aid next year lived in one country, it would be the world’s fifth largest nation,” U.N. aid chief Mark Lowcock said.
“The pandemic has wreaked carnage across the most fragile and vulnerable countries,” he added.
· U.S. coronavirus adviser Scott Atlas resignsDr. Scott Atlas has resigned as special adviser on the coronavirus to President Donald Trump, a White House official said on Monday, after a controversial four months during which he clashed repeatedly with other members of the coronavirus task force.
· China gave COVID-19 vaccine candidate to North Korea's Kim - U.S. analyst
China has provided North Korean leader Kim Jong Un and his family with an experimental coronavirus vaccine, a U.S. analyst said on Tuesday, citing two unidentified Japanese intelligence sources.
· UK says Brexit talks still stuck as EU wants too much
British Prime Minister Boris Johnson’s Brexit supremo, Michael Gove, said on Tuesday that trade deal talks with the European Union were still stuck on fishing, dispute resolution and governance rules.
“The EU still wants to take the lion’s share of the fishing in our waters - that’s not fair,” Chancellor of the Duchy of Lancaster Gove told Sky. “The EU still want us to be tied to their way of doing things.”
· UK house price inflation hits highest in almost six years: Nationwide In annual terms, prices rose by 6.5%, Nationwide said.
Prices rose by 0.9% from October, a slight acceleration in the monthly growth pace.
· Irish PM hopeful Brexit deal can be done this week - report
· China's November factory activity growth hits decade high: Caixin PMI
Activity in China’s factory sector accelerated at the fastest pace in a decade in November, a business survey showed on Tuesday, as the world’s second-largest economy recovers to pre-pandemic levels.
The Caixin/Markit Manufacturing Purchasing Managers’ Index(PMI) rose to 54.9 from October’s 53.6, with the gauge staying well above the 50-level that separates growth from contraction for the seventh consecutive month.
· Asian factories recover further from COVID-19 crisis in November as China booms
Asian factories recovered further in November from the COVID-19 crisis, surveys showed on Tuesday, thanks to a boom in economic powerhouse China which has enabled the region to withstand the pandemic better than many of its peers.
China’s factory activity accelerated at the fastest pace in a decade in November, a private sector survey showed, a sign the world’s second-largest economy is rebounding to pre-pandemic levels.
But a global resurgence in coronavirus infections has made the outlook highly uncertain, keeping governments and central banks under pressure to maintain or ramp up their massive stimulus programmes, analysts say.
· Japan plans to temporarily slash aviation fuel tax by 80%
Japan plans to temporarily cut its aviation fuel tax by 80% at most to help the airline industry, which is struggling with the impact of the coronavirus pandemic, the Kyodo news agency reported on Tuesday.
The nation is considering lowering the tax from 18,000 yen ($172.58) per kiloliter to 4,000 yen during fiscal 2021, the report said.
· Singapore and Hong Kong push back their travel bubble again, this time beyond 2020
Singapore and Hong Kong have delayed the start of their bilateral “travel bubble” again — deferring the plan beyond 2020, authorities from both cities said on Tuesday.
The latest postponement followed an earlier decision to push back the launch of the air travel bubble by two weeks after Hong Kong reported a resurgence in new Covid-19 cases. Inaugural flights under the arrangement — which initially allowed travelers to skip quarantine — was supposed to start on Nov. 22.
· Jakarta governor contracts COVID-19 as Indonesia infections spike
· Chinese embassy says Australia 'misread' offending social media post
China’s embassy in Australia said politicians there had “misread” a tweet showing a digitally-altered image of an Australian soldier holding a bloodied knife to the throat of an Afghan child, and were trying to stoke nationalism.
Australia’s Prime Minister Scott Morrison on Monday called the tweet posted by China’s foreign ministry spokesman, Zhao Lijian, “truly repugnant”, and called for an apology.
· Oil drops as OPEC+ delays talks, raising supply alarm
Oil prices fell on Tuesday as concerns over mounting supply returned to the fore after leading producers delayed talks on 2021 output policy that could extend cuts as the coronavirus pandemic continues to sap fuel demand.
Brent crude was down 26 cents, or 0.5% at $47.62 a barrel by 0550 GMT, after dropping more than 1% on Monday. West Texas Intermediate was down by 23 cents, or 0.5% at $45.11 a barrel, having dropped 0.4% in the previous session.
Still, both contracts surged around 27% in November after COVID-19 vaccine developments raised hopes of an economic recovery that could boost fuel demand.
OPEC+ delayed talks on output policy for next year until Thursday, three sources told Reuters, as key players still disagreed on how much oil they should pump amid weak demand.
The grouping, including the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, had been scheduled to hold its meeting on Tuesday after discussions of key ministers on Sunday failed to reach a consensus.
Reference: CNBC, Reuters, Trading View
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