The British pound has been all over the place during the work week, but it looks like we are seeing signs of hesitation more than anything else, with the 1.34 level offering a bit of resistance. At this point, this looks like a market where we could see US dollar strength. It would not surprise me at all to see the British pound trade down to the 1.32 level below. Anything below opens up the possibility of the 1.30 level. A break above 1.35 could change things, but right now this looks like a soft market.
Much like the British pound, the euro tried to break out, but it has failed. At this point, it looks like the 1.18 level is holding significant resistance and acting as a major ceiling. The euro rolling over here would make a certain amount of sense, perhaps continuing the overall range that it has been in for months. Add to that the fact that this upcoming week features Christmas and a severe lack of volume, and it is a perfect recipe to continue the overall sideways action.
The US dollar has fallen against the Canadian dollar during the trading week but has turned around to show signs of life. With that being said, the market looks as if it is trying to bounce and break back above the 1.38 level, but I also recognize that with the upcoming holiday trading action, this could be essentially “dead money” for the next several sessions. Either way, it looks like we are trying to find the floor in order to bounce. With the US dollar strength against other currencies starting to return, perhaps this one does have momentum, but I would anticipate very sluggish movement.
The US dollar tried to rally against the Swiss franc, but continues to struggle a bit. This does make a certain amount of sense, considering that there are a lot of concerns out there, and of course, the Swiss franc is considered to be a safety currency. Ultimately, I do think that the Swiss National Bank will keep the Swiss franc from appreciating too much, as they have made several comments about not liking its behavior. With that being said, I believe we remain in consolidation. That being said, you will need to be very patient to buy the US dollar against the Swiss franc, but you also get paid at the end of every day so it does make the trade a little more palatable.
Bitcoin has a significant amount of downward pressure on it, but at the end of the week, it managed to turn things around and form a bit of a hammer. That being said, the market is likely to continue to see a lot of questions asked of it as the risk appetite for cryptocurrencies has been significantly damaged as of late, but it is worth noting that the $80,000 level seems to be holding as support, and as long as we can stay above there I think there is at least a chance that bitcoin starts to turn things around eventually.
The US dollar initially fell against the Japanese yen during the trading week but has found enough support at the ¥155 level to turn things around and show signs of life. After the Bank of Japan meeting, it looks like the US dollar is ready to continue its march higher against the Japanese yen and has the ¥158 level in its sights. If we can break above there, then ¥160 would be the next target. Short-term pullbacks continue to be buying opportunities at this juncture.
The US dollar has been a little bit negative against the Mexican peso at the beginning of the week, but did come back a little bit to show signs of life. As things stand right now, the market is hanging around the 18 MXN level, and therefore, we could be on the precipice of a pretty big drop. Short-term rallies at this point in time continue to be selling opportunities, as the interest rate differential will continue to favor the Mexican peso, and of course, the better the US economy does, the more Mexican goods are brought into the US, helping the Mexican peso strengthen.
The NASDAQ 100 fell to test a major uptrend line during the week, but has turned around to show signs of life. If we can stay above the 25,000 level, that would be a very bullish sign for the NASDAQ 100, and it could send this market higher. We are getting close to Christmas, and of course, Christmas will be on Thursday, so it’ll be interesting to see whether or not there is a “Santa Claus rally” on the way out the door, or if we just go sideways. Regardless, this is still a bullish market, and I believe that eventually, the NASDAQ 100 will go higher.
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