It could be surprising, but the single currency was the main gainer last week, as it advanced 1.08% versus other major currencies. Such a performance looks unreasonable, when taking into account fundamental data from Europe. Region's industrial output, inflation, payrolls and the economic output as a whole, disappointed market participants. The main jump in Euro was registered on Tuesday, November 12, with EUR/GBP rocketing 84 pips. Moreover, the cable was highly volatile, fluctuating in a 130-pip range on Tuesday and Wednesday. The main reasons for such a behaviour were weaker-than-expected inflation data from the U.K. and welcoming signs from Britain's labour market, while on Wednesday the BoE lowered its inflation estimates. Among other major gainers stood the greenback, Swiss Franc and British Pound, that inched up 0.71%, 0.61% and 0.52%, respectively.
In contrast, the Japanese Yen lost 1.60% over the week, and hit three-digit level against the U.S. Dollar, after weaker-than-expected growth in the third quarter. On Friday, USD/JPY traded at 100.38, penetrating key resistance at 100, represented by a strong psychological level and an uptrend-resistance. Moreover, the pair is no longer trading in rising wedge pattern boundaries, meaning, higher prices to come. The rally is likely to continue, as 72% of traders are holding long positions, while 64% of pending orders are placed to buy the pair, providing additional support for further appreciation. From the perspective of fundamental analysis, the pair has strong potential for another rally, as on Thursday, November 21, Bank of Japan members may signals additional stimulus measures, in case the majority of policymakers would be able to assure Haruhiko Kuroda current measures will not provide stable growth and 2% inflation. In a longer perspective, potential targets for long traders could be weekly resistance and September 11 high at 100.69, while at 101.54 is located July's high.
Another pair worth paying attention this week, is AUD/USD, as on Thursday, November 21, RBA's Governor Glenn Stevens testifies. During the speech titled "The Australian Dollar: Thirty Years of Floating", he may provide some hints on whether the easing cycle is over, or the resource-rich economy needs additional boost. Based on the latest fundamental data, some dovish comments could be expected, hence, AUD/USD is likely to turn lower. At the moment of writing the pair stood at 0.9334, just 70 pips above the strong support represented by 23.60% Fibonacci Retracement. Moreover, since October the pair has been trading in boundaries of a channel down pattern, and a move to 0.9374 is unlikely. Moreover, there is a bunch of strong resistances around 0.95 (200—day SMA, 38.20% Fibonacci Retracement and weekly resistance).