FOREX: Currency Markets Brush Off Weaker Equity Sentiment

No change in yesterday's reference rates, released earlier today. No sign of a further drift higher in SOFR towards the earlier effective month-end with Thanksgiving on Thursday. 

REPO REFERENCE RATES (rate, change from prev. day, volume):

• Secured Overnight Financing Rate (SOFR): 4.58%, no change, $2214B
• Broad General Collateral Rate (BGCR): 4.57%, no change, $804B
• Tri-Party General Collateral Rate (TGCR): 4.57%, no change, $777B

New York Fed EFFR for prior session (rate, chg from prev day):

• Daily Effective Fed Funds Rate: 4.58%, no change, volume: $101B
• Daily Overnight Bank Funding Rate: 4.58%, no change, volume: $279B

Reuters reporting comments from Bruno Kahl, the head of the German Foreign Intelligence agency BND, warning that Russian officials doubt that NATO members will stand behind its Article 5 commitment to mutual defence. 

• Kahl says, “the Kremlin sees Germany as an adversary, we are in a direct confrontation with Moscow,” noting that “Russia has started to use kinetic measures against the West, including acts of sabotage against infrastructure... Russia is not only restructuring its military districts but also ramping up its land forces.” Adds that, “Russia is massively disrupting Western satellite navigation systems.”
• Kahl says, “We expect a further escalation of this situation… there is a rising risk this will raise question of invoking NATO Article 5.”
• Kahl warns, “high-ranking officials in Moscow apparently doubt whether NATO will stand united behind its article 5 commitments,” adding that “this increases the risk of a military confrontation with Russia... Russia's is aiming to prove that NATO will not stand united in an Article 5 scenario.”
• The comments come as European intelligence services escalate warnings of increased Russian hybrid warfare tactics, including suspected attacks on underwater cables and pipes connecting Europe’s energy and communications network.
• Danish Prime Minister Mette Frederiksen said at the NATO summit in July, “We are simply too polite. They are attacking us every day now.”
• The International Institute for Strategic Studies (IISS) thinktank notes, “Russia is intensifying its hybrid war in Europe, mounting more frequent operations with a constantly shifting front line. But despite Western governments’ increasingly vocal concerns over Russian activity, they have limited coordinated means to defend against it.”

• RES 4: 1.0937 High Nov 5 and key short-term resistance  
• RES 3: 1.0772 50-day EMA  
• RES 2: 1.0624 20-day EMA
• RES 1: 1.0580/0610 High Nov 27 / 20     
• PRICE: 1.0564 @ 16:14 GMT Nov 27
• SUP 1: 1.0335 Low Nov 22 and the bear trigger   
• SUP 2: 1.0311 1.382 proj of the Sep 25 - Oct 23 - Nov 5 price swing
• SUP 3: 1.0258 1.500 proj of the Sep 25 - Oct 23 - Nov 5 price swing  
• SUP 4: 1.0201 61.8% retracement of the Sep 28 - Juk 18 bull leg     

A downtrend in EURUSD remains intact, however, the pair continues to trade above last week’s low. The Nov 22 price pattern - a hammer candle - highlights a possible short-term base and if correct, the start of a corrective cycle. The trend is oversold and a recovery would allow this condition to unwind. Firm resistance to watch is 1.0624, the 20-day EMA. For bears, a move through 1.0335, the Nov 22 low would resume the downtrend.