Forex. Euro/dollar forecast (EUR/USD)
The euro/dollar pair fell slightly on Friday, reached a new local low at 1.1316 and recovered to the level of 1.1333 by the end of the trading session.
According to Italian Prime Minister Di Maio, Italy has no plans to revise the draft budget for next year in accordance with the requirements of the European Commission. In addition, Di Maio expressed confidence that Italy will remain in the Eurozone. The Italian government is due to submit a revised draft budget to Brussels by November 13. Earlier, the European Commission rejected the draft budget of Italy with a deficit of 2.4% of GDP in 2019. The European Commission is expected to approve its position on the revised document on November 21.
The crisis related to the approval of the budget in Italy led to the fact that the quotes of the euro/dollar pair decreased to a two-week local minimum in just two days.
The growth of the US currency was supported by macroeconomic data published in the United States. The U.S. producer price index rose 2.9 percent year-on-year in October, its highest since September 2012. The basic producer price index excluding food and energy prices increased by 0.5% in October. The index's growth forecast was 0.3% and the base 0.2%. The main component of the increase in U.S. producer prices in October was a 0.7 percent increase in service prices, the most significant monthly increase since early 2016.
In our forecast for Monday, we expect a correctional reversal and an increase in the euro/dollar pair's quotations to resistance levels of 1.1345, 1.1370 and 1.1390.
Forex. Pound/dollar currency pair forecast (GBP/USD)
The British currency fell sharply against the US in Friday's session, the pair reached the mark of 1.2957 at the end of trading.
The pair's quotations fell below the key level of 1.3000 after the resignation of Jo Johnson, who was Minister of Transport. Johnson said the Brexit deal was a terrible mistake and that the treaty option being proposed now was radically different from the one discussed two years ago. In addition, the leader of the Democratic Unionist Party, Foster, said she did not support Prime Minister Theresa May's proposals in their current form. Irish Unionists are members of a coalition with the Conservatives, which has a majority in parliament. Thus, May continues to face strong resistance to the current version of the agreement among her own party.
Gross domestic product grew in the UK in the third quarter by 1.5% year-on-year. This growth rate was the fastest since the fourth quarter of 2016. The increase in exports was on the back of a decrease in imports, mainly of cars. Company investment declined during the quarter, which negatively affects the future growth prospects of the British economy.
In our forecast for today we expect a further decline in the quotations of the pound/dollar pair to the support levels of 1.2940, 1.2920 and 1.2900.
Forex. Gold price forecast
Gold prices fell sharply on Friday and ended the next trading week at 1209 dollars per troy ounce.
The end of the week was a bad one for gold, and the asset lost more than $20 in value at the end of trading. The US dollar is recovering again after the midterm elections to Congress and the Senate and after the tough statement of the Federal Reserve at the end of the November meeting.
Venezuelan President Nicolas Maduro has announced the start of an increase in gold production in the country. According to him, the second gold reserves in the world may be located in the territory of the state. Venezuela has long been in a severe economic crisis. The state needs foreign currency in order to be able to purchase the necessary goods and equipment abroad. Plans to use Petro's own cryptocurrency, which will be provided with oil and gold, have been discussed for a long time. Nicolas Maduro is sure that there are huge reserves of gold on the territory of his state. At the same time, it is unlikely that production in Venezuela will be able to take such a large scale that it will significantly affect prices on the world market.
In our forecast for today's trading we expect a further decline in gold quotations to support levels of 1207, 1204 and 1202 dollars per troy ounce, after which, with a high probability, there will be a reversal and corrective price growth.
Forex. North American Oil Forecast (WTI)
WTI crude oil prices continued to decline on the last trading day of last week and reached a key support level of $60.00 per barrel.
The fall in WTI oil prices continued for the last ten days in a row, which was the record series since 1984. Oil prices are falling due to rising supply in the global market, as well as investor fears that the increase in oil demand may slow down. OPEC officials have already expressed their concern about falling prices by more than 20% in the past two weeks. The oil ministers of Iraq and Saudi Arabia met on Saturday and discussed cooperation between the countries in preparation for the December 4 OPEC meeting in Vienna, as well as the process of stabilizing the global oil market and commodity prices.
An extraordinary meeting of oil ministers was held in Abu Dhabi on Sunday. The meeting resulted in the announcement that most of the countries participating in the global agreement on the regulation of oil production support the idea of reducing production next year. It is about removing from the market about a million barrels of oil per day. According to some reports, OPEC may make an official statement on this issue at the meeting on December 4.
In our forecast for Monday, we expect a reversal and the beginning of the recovery of WTI crude oil prices to resistance levels of 60.20, 60.40 and 60.75 dollars per barrel.
Forex. Cryptocurrency forecast
Major cryptocurrencies continued to decline at the end of last trading week. Bitcoin quotes reached $6,375. Ethereum fell to $210 and the XRP price fell to $0.5000.
On Friday, the developers of Ethereum announced the date of the second stage of the hard fork Metropolis, which will be called Constantinople. The update originally scheduled for October has already been postponed to the following month, but now the developers have announced a new date for the hard fork – January 16. Constantinople should significantly increase the speed of the Ethereum blockchain, but when testing the update, unexpected problems were revealed that required additional code modifications. The developers also touched on the problem of "bomb complexity" – a process where the complexity of ether extraction gradually increases as blocks are created. The Constantinople update will delay the "complexity bomb" by 18 months. In addition, after the upgrade, miners will receive a reward for the extraction of the block in the amount of not three Ethereum, but only two.
On the EOS blockchain, CarbonUSD, a cryptocurrency token pegged to the US dollar in a 1:1 ratio, was launched as the first staplekoin. This was announced by the developers of the token on Friday, also noting that Carbon, available for use in key networks, in the long term will have a positive impact on the cryptocurrency industry. The EOS blockchain has a high bandwidth that allows you to make thousands of transactions per second, which is much higher than the ethereum network. In this regard, CarbonUSD, which has been in existence for about two months in the ethereum blockchain, was decided to move to the EOS blockchain, which will significantly reduce the commission and processing time of transactions on the network. Institutional investors, hedge funds and exchanges will have early access to the token and will be able to interact with it through the Nevada-based Bank Prime Trust, which is a partner of Carbon and provides an opportunity to exchange dollars for CarbonUSD.
In our forecast for Monday, we expect a slight recovery of cryptocurrencies and the growth of Bitcoin to resistances of 6400, 6430 and 6475, strengthening of Ethereum to the marks 212, 215 and 218, as well as the increase in the price of XRP to the levels of 0.5150, 0.5175 and 0.5200 dollars.