Forex. Euro/dollar forecast (EUR/USD)
The quotations of the euro/dollar pair continued to decline at the beginning of the new trading week and reached a new low since July last year at 1.1242.
The uncertainty over the Italian draft budget for 2019 puts strong pressure on the euro. Already today, the Italian government should give a final answer to the European Commission about the readiness to meet European requirements. Prime Minister Di Maio's comments point to heightened tensions between Italy and the EU. The spread of Italian and German bond yields continues to grow. ECB Vice-Chairman Luis de Guindos said yesterday that Italy remains the main cause for concern of the regulator.
Rising interest rates in the U.S., trade war between America and China and political risks of Europe will contribute to strengthening the dollar against the euro and in the near future according to many experts. The pair has already overcome the annual minimum and maintains a downtrend. It is likely that the decline will continue until the December meeting of the Fed, at which the interest rate is likely to be raised. At the same time, it is unlikely that the pair will maintain the taken rate of decline. The main benchmark of the euro/dollar exchange rate at the moment remains the key support level of 1.1000.
In our forecast for Tuesday, we expect the euro/dollar pair to decline to support levels of 1.1220, 1.1200 and 1.1175.
Forex. Pound/dollar currency pair forecast (GBP/USD)
The British currency also continued to decline against the US, the pound/dollar pair fell to 1.2850 by the end of Monday's trading session.
No new details about the Brexit negotiations were made public on Monday. According to michel Barnier, the chief negotiator from the European Union, the main provisions of the agreement on the terms of the UK's exit from the EU are ready and will be presented to the British Cabinet today. At the same time, Barnier noted that the final agreement has not been reached yet. The main issue of negotiations now remains the issue of customs regime on the border between the remaining in the EU Ireland and leaving the European Union as part of the United Kingdom Northern Ireland.
Meanwhile, British Prime Minister Theresa May has cancelled an emergency cabinet meeting scheduled for Monday to discuss a Brexit deal with the European Union. The move could lead to the cancellation of an extraordinary summit with the EU scheduled for the end of November, at which the parties are going to conclude a final deal. Theresa May's proposed plan to leave the European Union does not suit many European officials and is strongly criticized by some members of the UK Conservative Party.
In our forecast for today we assume high volatility of the British currency and the decline of the pound/dollar quotations to the support levels of 1.2830, 1.2800 and 1.2760.
Forex. Gold price forecast
Gold prices continued to decline at the beginning of the new trading week and almost reached the key support level of 1200 dollars per troy ounce.
The main trend in the currency markets in recent days has again become a strong US dollar, which automatically led to a fall in the price of gold. Traders are waiting for an interest rate increase by the Federal Reserve in December, and the recent inflation data for October and the last meeting of the FOMC confirmed the intentions of the regulator. At the same time, gold will not be easy to break through the key support level of 1200 dollars per ounce, so probably the quotes will be in a narrow lateral range for some time.
After the midterm elections in the United States, stock markets showed significant growth, which led to pressure on gold. But this growth is projected to be short-term. Democrats are likely to fail to influence Donald Trump's trade policies. Therefore, we can assume that the escalation of trade conflict between the two countries will continue, and in this situation the world economy and the U.S. stock market will suffer primarily. That is why many experts assume that the growth of the stock market will be short-lived. However, such forecasts are permanent, and the price of gold in the meantime has already reached a low, starting in October this year.
In our forecast for the upcoming trades, we expect a slight recovery of gold quotes to resistance levels of 1203, 1206 and 1210 dollars per troy ounce.
Forex. North American Oil Forecast (WTI)
WTI crude oil prices fell sharply at the end of monday's trading session, lost more than two dollars in price at the end of the day and reached the mark of 58.75 dollars per barrel.
At a meeting of OPEC ministers in Abu Dhabi, a general decision on a new oil production strategy next year failed to reach a general decision. A final decision on a possible increase in raw materials production will be made in December. Saudi Arabia has announced that it will reduce oil supplies to the world market by 0.5 million barrels per day as early as next month. Most members of the monitoring committee tend to support Saudi Arabia and also reduce production. Russian Energy Minister Novak said that Russia has not yet reduced production, but did not rule out the possibility of such a scenario. Russia has been ramping up oil production in recent months. Since June, production has grown to a record 11.4 million barrels per day.
Immediately after the meeting in Abu Dhabi, US President Donald Trump spoke and predictably criticized the statement of the OPEC countries. Trump spoke in the hope that OPEC would not cut production, allowing oil prices to continue to decline. Recall that the quotes have already reached the minimum value since February this year.
In our forecast for Tuesday, we expect the price of WTI crude oil to recover to resistance levels of 59.00, 59.40 and 59.80 dollars per barrel.
Forex. Cryptocurrency forecast
Cryptocurrency market recovered on Monday, most of the main assets ended the trading session with growth. Bitcoin strengthened slightly to $6,440. Ethereum was little changed in price, traded around $210, and the XRP price rose significantly to $0.5260.
Bitcoin quotes continue to remain in a narrow side range. The amplitude from a one-week high to a minimum is just over $200, which is extremely small for such a volatile instrument as bitcoin.
Yesterday it was reported that Iran has completed the development of its state cryptocurrency, which will be supported by the national currency riyal. Once the Central Bank of Iran approves its use, a new digital currency will be issued to banking institutions to test payments, domestic and interbank payments. The main goal of the development of the national cryptocurrency is the expansion of banking services and circumvention of U.S. economic sanctions against a number of Countries of the Middle East.
According to the new patent application, the American company IBM is creating a new blockchain system that will allow research to be more efficient. The patent application describes a system of dynamic cooperation in research. The benefits of distributed registry technology to track research are the absence of institutional or national boundaries. The initial patent application was filed in December 2017, but development is still under way.
In our forecast for today we expect further growth of the cryptocurrency market, including the strengthening of Bitcoin to the levels of 6460, 6480 and 6525, Ethereum to the levels 214, 216 and 220, as well as the growth of XRP to the levels of 0.5300, 0.5340 and 0.5380.