Black Friday News And EUR, USD, GBP Analysis Nov-23, 2021

somrat4030

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Forex Forum Currency Trading Analysis And Forecast

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A small EUR/USD bounce in early trading is only to be expected after the losses of the past two sessions, but intraday bounces have been the cue for more selling of late, and it would not be surprising if this turned out the same way.

Dollar strength continues to carry all before it, putting further pressure on the currency pair; even a rally towards $1.1375 would be an impressive achievement for buyers in this environment.​


The shared currency was further underpinned by the release of better-than-expected German/Eurozone PMIs for November. In fact, the flash German Manufacturing PMI came in at 57.6 for the current month and indicated that the manufacturing sector activity in Eurozone's economic powerhouse continued with its solid pace of expansion.

Adding to this, the gauge for the German services sector reached a two-month high level of 53.4 in November as against expectations for a fall to 51.5 from 52.4 in the previous month. Separately, the flash Eurozone Manufacturing PMI also surpassed market expectations and arrived at 58.6 in November, a two-month high.

On the other hand, GBP is still under declining pressure​

GBP / USD is likely to continue the decline that began last Friday as the U.S. dollar continues to benefit from the re-election of Jay Powell as chairman of the U.S. Federal Reserve. His reappointment is expected to become a formality, and that could mean a quicker abolition of U.S. monetary stimulus and a slight increase in interest rates next year.

Elsewhere, The Pound to Dollar exchange rate (GBP/USD) remains firmly on the defensive amid wider US currency strength and is trading just below the 1.3400 level in early Europe.

The dollar posted further gains on Monday following US President Biden's announcement that Federal Reserve Chair Powell would be nominated for a second term.

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On the other hand, Black Friday's influence on the economy is more debatable.​
Some argue in favor of the Keynesian effect of spending driving economic activity, which puts more money into circulation and potentially buoys the economy. At a time when the US economy has shown signs of recession, consumer spending might be welcomed. But others say that the influence of the event is negligible, with only short-term effects observed. This is due in part to lessons from previous years, when many retailers have seen poor sales figures once the discounting has ended.

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