Euro gets support from flight into defensive assets

On Monday, November 29, by the end of the day, the euro fell by 0.35%, to 1.1291. Moving away from Friday's shock, risky assets opened with growth. Calm returned to world markets. Investors have revisited their worst-case scenarios for the new coronavirus strain. Stock indices closed higher, while US bonds fell.

Since the euro rose to 1.1331 on Friday, the pair dropped to 1.1258 on Monday as part of the correction. The price bounced off the balance line (sma55) in the American session.

Scheduled statistics (GMT +3):

• At 11:55 in Germany, there are data on the change in the number of unemployed in October, the consumer price index for November.
• At 13:00 Eurozone will publish the consumer price index for November.
• At 16:30, Canada will present data on changes in GDP for September.
• Federal Reserve Chairman Jerome Powell will deliver a speech at 18:00
• At 18:00 in the US, the consumer sentiment index from The Conference Board will be released in November.
• US Treasury Secretary Janet Yellen will deliver a speech at 18:00.
• John Williams, President of the Federal Reserve Bank of New York, will deliver a speech at 6:30 pm.
• Fed Governor Richard Clarid will deliver a speech at 21:00.

Current situation:

At the auctions in Asia, we see a picture similar to Friday. Oil, AUD / USD and NZD / USD have renewed lows. Market sentiment has deteriorated after the Financial Times (FT) shared comments from Moderna CEO Stefan Bansel that the South African variant of the coronavirus, dubbed Omicron, is exacerbating the problem.

Stefan Bansel said COVID-19 vaccines are unlikely to be as effective against Omicron as they used to be. Due to the large number of mutations, existing vaccines may need to be modified. Vaccine resistance could lead to more illness, hospitalizations and prolong the pandemic.

President Biden said the US has not yet closed its borders, although the omicron raises concerns. Treasury Secretary Janet Yellen recalled that a new vote on the national debt ceiling is approaching in Congress.

The economic calendar is empty for today. Among the speakers, it is worth highlighting the speeches of J. Powell and J. Yellen.

Technical analysis:

From the balance line, the price increased to 1.1327. The euro again acts as a defensive asset today along with the yen and the franc. If the Aussie and New Zealander fail to bounce back from today's lows, the euro will gain strength from a flight into defensive assets.

Futures on the SP500 index fell, but did not update the low. It is believed that market participants will wait for the opening of the American session. For buyers, resistance is the level of 1.1337. After him the road opens to 1.1386.

Summary: on Monday, the euro closed slightly in the red. The pair corrected after Friday's rally to the balance line (sma55). The euro recovered to 1.1327 on Tuesday. The flight into defensive assets was triggered by Moderna CEO S. Bansel. In an interview with the FT, he said COVID-19 vaccines are unlikely to be as effective against Omicron as they used to be. The situation has become similar to Friday. Buyers are determined to bring the rate back to the 1.1386 level.