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News recap: WTI crude and Brent are forecasted to potentially print their largest monthly gains

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Last week the greenback continued to experience broad weakness within markets despite statements from Trump outlining that Covid-19 vaccine delivery will start this week as well as soothing comments suggesting that he will leave the White House if the electoral college votes for Biden. The DXY remained subdued beneath the 92.00 handle as EUR/USD closed above 1.1950. Gold selling continued as investors decided to seek riskier plays leading to a slump of over 4.5% for the inflation hedged asset. Looking to the week ahead, attention in the US will turn to the quantitative data set for release as market participants aim to gauge how the labour market has fared in the past month. NFP’s be released on Friday and is set to see another 500K jobs added to the market whilst the unemployment rate is expected to tick lower by 0.1% to 6.8%

The UK and EU are set to be heading into a ‘very significant’ week as talks over a trade deal enter the final days with serious differences yet to be agreed on. The current transition period which expires on the 31st of December is drawing ever nearer with both sides yet to conclude on issues that have been ongoing throughout the past year specifically pertaining to fishing rights and competition policy. In recent weeks talks have been somewhat positive as officials last week pointed to almost 95% of the deal being complete. Within FX markets the bullish rally for sterling subsided as the currency weakened some 0.8% against the Euro in the past week. Against the greenback, the asset continues to reside at 3-month highs though is very much benefiting from the overbearing Dollar weakness that has been seen in recent months. The asset currently sits just beneath the 1.3400 handle after printing a strong Doji on the weekly timeframe.

In other news, the UK has been able to secure an additional two million doses of Moderna’s Covid-19 vaccine candidate which is set to become available in Europe around the springtime. The nation which is currently battling with rising Covid-19 cases has already secured 100 million doses of the vaccine developed by AstraZeneca and 40 million doses from Pfizer and BioNTech as they look to target a rollout to begin before Christmas. Last week PM Johnson and his team announced the new tier-based restrictions that are to follow upon the transition from the most recent lockdown which is set to end on the 2nd of December.

WTI Crude

WTI crude and Brent are forecasted to potentially print their largest monthly gains since the month of May as both commodities are up around 27.5%. WTI Crude gained for the fourth consecutive week as price moved to trade at levels last seen in the month of March. The commodity which has continued to gain on the improved risk tone and global vaccine developments shrugged off worries of increasing virus cases as prices broke above the $44.00/bbl. to push through a 127.2% extension level. The commodity is set to continue to experience some volatility this week as OPEC Meetings take centre stage. Going into the meeting; participants are set to continue deliberations on delaying the output hike that is currently scheduled to take effect in January. At present the next key level to the upside remains around the $48.00 handle as prices stay firmly above both its 8 and 21 Daily EMA.

Cryptocurrency

BTCUSD retreated last week after the strong bullish trend stalled around the $19,500 handle. The asset dropped some 16% as prices slumped beneath $16,500 largely sparked by potential profit taking as the asset nears its all-time highs. The leg lower was seen across all large cap cryptocurrencies as ETHUSD also failed to hold above the $600 level. Going into the week ahead the bullish trend looks set to continue as both assets remain supported by the 21 Daily EMA.

Here is a breakdown of the high impact data releases this week.

Monday

All Day OPEC Meetings. Markets to watch: ALL

Tuesday

03:30 Cash Rate & RBA Rate Statement. Markets to watch: AUD Crosses

15:00 Fed Chair Powell Testifies & ISM Manufacturing PMI. Markets to watch: USD Crosses

Wednesday

00:00 RBA Gov Lowe Speaks. Markets to watch: AUD Crosses

00:30 GDP q/q. Markets to watch: AUD Crosses

15:00 Fed Chair Powell Testifies. Markets to watch: USD Crosses

Friday

13:30 Employment Change & Unemployment Rate. Markets to watch: CAD Crosses

13:30 Average Hourly Earnings, Non-Farm Employment Change & Unemployment Rate. Markets to watch: USD Crosses

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