Markets in Turmoil amid New Omicron Threat

November 29, 2021

Fed Chair Testimonies and NFP

Friday the Euro made notable advances against the U.S. Dollar, on the back of the fears triggered away the new coronavirus variant, Omicron. All the same, on Monday the greenback erased some of the losses and recovered against the single currency, as the pacing of the pecuniary stimulus tapering took midway stage again, boosting dollar demand.

The uncertainty that surrounds the impact of the new Omicron threat wish likely generate increased volatility as governments are quickly imposing new safety measures. Japan has already distinct to ban foreigners from entering the state starting November 30, and other governments will probably bring down kindred measures, which will cause market turmoil.

Key Events for the Week Ahead

Federal Reserve President Jerome Powell and Treasury Secretary Janet Yellen will testify double this week, before the Senate Banking Citizens committee and ahead the House Business Services Citizens committee, on the theme of the CARES Act. The testimonies take identify Tuesday at 3:00 pm GMT and Wednesday at the same hr and can lead to heavy excitableness because the Committees' questions are non known in advance, olibanum the answers are non scripted.

Friday, Dec 3 at 1:30 pm GMT, we need a look at the always-important jobs plac in the Agreed States, with the release of the Non-Farm Payrolls cover also as the Normal Hourly Earnings and Unemployment Rank.

The Fed successful it clear that the pace of the monetary stimulus tapering is tightly correlated to the job market situation, thus the release of the NFP almost guarantees volatility. The expected number is 528K, very close to the previous 531K.

Chart Analysis – EUR/USD

The span is currently hovering about 1.1260 with an overall bearish bias but from a short-term perspective, the Euro made a notable recuperation at the last of last hebdomad. The combination of 1.1200 – 1.1175 support zone and the oversold condition of the Congenator Strength Index finger triggered a recoil that is likely to take the pair into the resistance zone portrayed by the lower surround of the diagonal channel seen on the chart.

If the pair with success moves back into the channel, then the following name and address will maybe suit 1.1400 – 1.1430 but this field acted as electric resistance back in middle-2020 and it wasn't of much importance when price last visited it (Nov 15, 2021).

Once the current bullish move is hearty, the dollar is likely to bring the pair into 1.1175 support but the week ahead is filled with high-excitableness events that may trigger erratic movements, thus carefulness is advised.