Daily Market Update 28/11/2016

Good morning,

The Japanese Yen is gaining ground today after it had weakened for several trading sessions. The RSI (14) for UsdJpy reached 82 last week, a clear overbought condition; the same indicator for GbpJpy went event higher to 85. UsdJpy is trading at 111.9 (-1.14%) and GbpJpy is down 127 pips to 139.93 (-0.9%).  Profit taking on shorts JPY positions seems a logical consequence of a funding in Yen that for more than 2 week developed after the victory of Donal Trump in US.

The promise of deregulation of financial services and  infrastructure spending lifted the yield in the bond market. The US dollar rally was a consequence of an expected high nominal rate in US.  Many analysts did not consider the dynamics of the bond market when they expected a weak dollar in case of the victory of the Republican nominee. The Greenback could resume its positive trend considering the referendum in Italy next month, and  in the medium/Long term presidential election in France and general election in Germany, both will be held the next year, could trigger an high volatility cycle on the shared currency. EurUsd is trading at 1.0657 (+0.62%).

Crude Oil gapped down on Sunday evening as selling pressure on the commodity could develop this week as the financial community cast doubts regarding an output cut. Crude Oil is trading at 45.68 $/oz (-0.83%). Gold is up 13.7$ at 1,192.1 (+1.6%).

European Indices opened in negative territory and  will be interesting to see if US indices can keep positive momentum after a record high was reached last week.