KEY POINTS OF THE ARTICLE:

• Key facts: The market is looking for new catalysts
• Today's currency: The dollar's rebound against the yen is up against a bearish slant

Currency Table-Time Horizon: Daily

RESISTANCE

SUPPORT

Restangle break: Horizontal_obj 1,5685 reached, then 1,5350

Correction-Return on support

0.7

HIGHLIGHTS: THE MARKET IS LOOKING FOR NEW CATALYSTS

The market reaction resembles the “Buy the rumor, sell the news” logic, as risk assets have risen sharply in preparation for the announcement of the Biden stimulus package and now seem to have stalled, with operators looking for new catalysts to stimulate price action

The dollar index reached its highest level in three and a half weeks on Friday despite weaker-than-expected retail sales, as weakness in equities boosted cash demand for the dollar. The dollar also rose after EUR/USD hit its lowest level in a month, due to concerns that new restrictive measures in Europe would weaken economic growth in the eurozone. USD/JPY was virtually unchanged

The dollar was also boosted this morning by a Wall Street Journal report that the candidate for Secretary of the Treasury, Janet Yellen, must affirm her commitment to market-determined exchange rates.

EUR/USD fell to its lowest level in a month on Friday as economic growth in Europe is likely to weaken, with France imposing a daily 18:00 curfew across the country, while Germany and Italy seek to strengthen and extend their lockdown measures. EUR/USD is still suffering from political uncertainty in Italy after members of former Prime Minister Renzi's party left the coalition on Wednesday, leaving Prime Minister Conte without a majority in Parliament. A new phase of political crisis cannot be ruled out.

USD/JPY remained unchanged and finally finished with modest gains. A bearish factor for the yen was the announcement on Friday that the November Japan tertiary industry activity index fell unexpectedly by -0.7% m/m, lower than expectations of +0.3% m/m, and the largest drop in 6 months. USD/JPY gains were limited by rising Japanese government bond yields. The Japanese 10-year bond yield peaked at 0.043% on Friday, improving currency interest rate differentials with the yen. Equity weakness on Friday also boosted demand for safe havens for the yen and was negative for

Ocean currencies have entered corrective mode, with AUD remaining above an upward slant without progressing while NZD has broken an intermediate support at 0.7145 which could extend its correction without calling the uptrend into question. This morning, good growth figures in China could support ocean currencies

TODAY'S CURRENCY: THE DOLLAR'S REBOUND AGAINST THE YEN IS UP AGAINST A BEARISH SLANT

The yen dollar has been in a bearish dynamic since July. The bullish divergence has allowed the greenback to gain momentum but the pair is unable to cross the downward slope with the manifestation of a reversal candlestick at its contact last Monday. Overflow attempts during the week ended

Prices could therefore return to the south in the coming days with a target of 101.20, which corresponds to the lowest in March during the Covid crisis. An overturn would invalidate this scenario and allow for a larger rebound towards the 200-period moving average at 105.28

Evolution of the dollar against the yen in daily data: