Asian markets opened higher, with February oil futures adding more than a percent on Monday morning, and commodity currencies showing good dynamics. The dollar is under strong pressure, which is due to a number of problems.

The CFTC's weekly report is not in favor of the dollar. The total short position rose to 30.436 billion, with the dollar falling against absolutely all G10 currencies, indicating an unusual consensus.

Now, the US dollar is declining. If last week, there was an illusion that Trump would have enough resources to challenge the election results, since the traces of fraud are so obvious that it is time to assert about the color revolution that took place in the US, then the case has apparently come to an end. The US Supreme Court dismissed the claim of Texas and 17 States that joined it, without seeing evidence of fraud.

This decision of the court, despite the fact that the majority in it are Republicans, indicates the existence of collusion between Republicans and Democrats. The unwanted Mr. Trump will be removed, replaced by a person with signs of dementia, and both major parties will have the opportunity to implement their plans.

Hence, the change in forecasts regarding the ability of Congress to reach a compromise on new fiscal stimulus and the Fed's intention to make adjustments to the QE program. Apparently, it is necessary to wait for an agreement on a new stimulus package in the very next few days, especially since the government is running out of money, and a possible lockdown may be added. Such a scenario does not need neither one nor the other.

Similarly, expectations for the Fed meeting are becoming more dovish. Despite the fact that the comments of the FOMC members are mostly neutral, traders are waiting for specific actions that will increase the supply of liquidity, and the only question is what specific forms these actions will take.

EUR/USD

The euro continues to recover. According to the CFTC report, cumulative bullish position rose by 2.559 billion over the reporting week, which indicates confident growth. In turn, some negativity came from the ECB's announced measures to expand stimulus, even though the Central Bank played its game in full accordance with market expectations. The estimated fair price has lost momentum, which increases the chances of a corrective decline. Nevertheless, the trend remains confidently bullish.

The EU crisis, caused by the action of Poland and Hungary over the application of the rule of law, has been temporarily resolved. However, the situation remains deadlocked, which will partially put pressure on the euro until this year ends and lowers the probability of a Christmas rally.

We believe that it is likely to update the high 1.2181, but there will probably be no strong movements before the Fed meeting. On the other hand, Mr. Biden, being recognized as the US president, will pave the way for large-scale injections into the US economy, which will objectively contribute to its weakening, in particular after December 16. The target of 1.2546 is relevant in the medium term.

GBP/USD

The pound continues to move with increasing amplitude. By the end of the week, it fell closer to the lower limit of the range after the head of the European Commission, Ursula von der Leyen, said that the positions of both sides are so far away that it is very unlikely to enter a deal. However, Johnson and Ursula von der Leyen had another constructive conversation on Sunday and agreed to continue negotiations. As a result, the pound began the week with a gap up.

Speculators are trading on a deal, which is the main option for completing negotiations in the eyes of major players at least for now. The weekly growth of $ 1.139 billion is impressive and the estimated price is steadily catching up with the spot price.

The main intrigue in the negotiations is whether the EU will make concessions or not. The question concerns the right of the UK to take unilateral actions. For example, raising taxes or launching subsidies will or will not lead to automatic protection of the EU market by increasing duties on UK products.

Technically, since the base scenario is bullish, we should wait for the pound to recover and make another attempt to update the high. The pound is likely to return to the zone of 1.3470/3534, with the intention of moving higher in case of any positive news.