FINANCIAL MARKET VOLATILITY INCREASES AS NEW RISKS EMERGE

SAFE HAVEN DEMAND

Safe-haven asset classes received a major boost this week, with US equity markets tumbling across the board and the benchmark US ten-year bond yield sinking to its weakest trading level since September this year. The Japanese yen currency strengthened against all major counterparts as US equity markets plummeted, following Canadian authorities arrest of the Chinese tech giant Huawei’s Chief Financial Officer. Gold also benefitted from its safe-haven status this week, with the yellow metal trading above the $1,2400 level, marking its highest levels since July this year.

• The USDJPY is only bullish while trading above the 113.15 level, key resistance is located at the 114.02 and 114.54 levels.

• If the USDJPY pair trades below the 113.15 level, key support is found at the 112.20 and 111.40 levels.

CRYPTOCURRENCIES HIT NEW 2018 LOW

Ethereum, Bitcoin and Litecoin all crashed to fresh 2018 trading low this week, with the popular cryptocurrencies failing to attract buying interest from already depressed levels. Ethereum broke below the $97.00 support level, amidst a raft of heavy technical selling, with the ETHUSD pair sinking below the $85.00 level. Etheruem settled into its ranking as the third largest cryptocurrency by market capitalization, with Ripple looking increasingly comfortable as the second largest cryptocurrency. Bitcoin’s losses were less severe than Ethereum’s, with the number one cryptocurrency by market capitalization pressured towards the $3,300 level, while Litecoin sunk towards the $25.00 level.

• The ETHUSD pair is bearish while trading below the $97.00, further losses towards the $80.00 and $75.00 levels seems possible.

• If the ETHUSD pair trades above the $97.00 level, further gains towards the $105.00 and $115.00 resistance levels remains possible.

STERLING SUBDUED

The British pound fell to a fresh 2018 trading low against the US dollar this week, as the ruling UK Conservative party were found to be in contempt of parliament. British PM Theresa May faced a backlash, after withholding vital legal advice about the United Kingdom’s eventual departure from the European Union. The UK economy also posted much weaker than expected PMI Services data and traded on the back foot for much of the week, as traders awaited the meaningful vote on British PM Theresa May’s proposed Brexit bill, which is planned to take place on December 11th in UK parliament.

• The GBPUSD pair is bearish while trading below the 1.2700 level, key support is found at the 1.2550 and 1.2400 levels.

• If the GBPUSD pair moves above the 1.2840 level, key resistance is found at the 1.2882 and 1.3000 levels.

CANADIAN DOLLAR SLUMPS

The Canadian Dollar fell to a fresh 2018 trading low against the US dollar this week, as the Bank of Canada kept rates on hold and struck a more bearish tone towards the domestic economy than expected. The USDCAD pair soared above the 1.3400 level, as the Bank of Canada noted that the Canadian economy faces risks from falling oil price and dwindling investment. Market participants have now significantly trimmed bets that the Bank of Canada will hike interest rates at the next monetary policy meeting, as Canadian policymakers adopt a new wait-and-see approach.

• The USDCAD pair is bullish while trading below the 1.3300 level, key resistance is found at the 1.3460 and 1.3550 levels.

• If the USDCAD pair trades below the 1.3300 level, key support is found at the 1.3220 and 1.3170 levels.