As we head into Thursday, November 28, 2024, global markets remain cautious, with focus shifting toward a quieter trading day due to the U.S. Thanksgiving holiday. However, economic releases from Europe and Canada, combined with lingering reactions to U.S. economic data, are expected to maintain some volatility in the currency markets.
In the U.S., mixed economic data earlier this week provided traders with conflicting signals. While Core Durable Goods Orders and Core PCE Prices showed signs of slowing, Personal Spending beat expectations, reflecting resilience in consumer activity. The EUR/USD pair gained traction following these releases, while the USD/CAD pair faced downward pressure amidst recovering crude oil prices and anticipation of Canadian GDP figures. Meanwhile, NZD/USD exhibited strong upward momentum, buoyed by renewed risk sentiment.
EUR/USD
Technicals in Focus
The EUR/USD pair showed a steady climb, reaching highs near 1.0578, supported by weaker U.S. economic data and improving Eurozone sentiment ahead of the ECB Non-Monetary Policy Meeting. On the technical front, the MACD indicator is now firmly in bullish territory, indicating rising momentum. The Stochastic Oscillator has entered overbought levels, suggesting caution for potential short-term pullbacks. The 14-day RSI is trending higher, confirming the pair’s upward trajectory.
Trading Strategy: Neutral to Buy
- Buy above 1.0570 with targets at 1.0600-1.0625 and 1.0650-1.0675, with a stop loss below 1.0540.
- Alternatively, consider short positions below 1.0540 with targets at 1.0510-1.0490, with a stop above 1.0570.
USD/CAD
Technicals in Focus
The USD/CAD pair dropped sharply, testing lows around 1.4028 as crude oil prices rebounded and traders positioned ahead of Canadian GDP data. The MACD has crossed into bearish territory, signaling increased selling pressure. The Stochastic Oscillator remains in oversold territory, raising the possibility of a short-term corrective bounce. The 14-day RSI shows a slight bearish bias, confirming ongoing downward pressure.
Trading Strategy: Neutral to Sell
- Sell below 1.4040-1.4020 with targets at 1.3990-1.3960 and 1.3930-1.3910, with a stop loss above 1.4070.
- Alternatively, consider buying above 1.4070 with targets at 1.4100-1.4130, with a stop below 1.4040.
NZD/USD
Technicals in Focus
The NZD/USD pair rallied strongly, reaching highs near 0.5900, driven by a combination of renewed risk appetite and supportive domestic data. The MACD indicator shows strengthening bullish momentum, while the Stochastic Oscillator is edging into overbought territory, signaling caution for additional upside. The 14-day RSI confirms the bullish sentiment, indicating room for further gains in the near term.
Trading Strategy: Neutral to Buy
- Buy above 0.5890 with targets at 0.5920-0.5940 and 0.5960-0.5980, with a stop loss below 0.5860.
- Alternatively, consider short positions below 0.5860 with targets at 0.5840-0.5820, with stops above 0.5890.
Market Outlook
Looking ahead, Canadian GDP data on Friday will be pivotal for USD/CAD as traders seek confirmation of the Canadian economy’s resilience. For the EUR/USD pair, the ECB Non-Monetary Policy Meeting remains a key focus, as traders gauge the central bank’s outlook on inflation and growth amidst mixed economic signals. Finally, the NZD/USD will closely track global risk sentiment and commodity market movements.
While the U.S. Thanksgiving holiday may dampen liquidity, the potential for sudden volatility remains, particularly as traders position for the end of the week.