Weekly forecast’s Hot Topics:
- DOLLAR – US GOVERNMENT SHUTDOWN STILL WITHOUT A DEAL.
- EUR – WHAT TONE WOULD DRAGHI TAKE IN THE NEXT ECB MONETARY POLICY DECISION?
- GBP – COULD IT BE MAKING A TERMINAL PATTERN?
The past week, the best performer was the Aussie with an advance of 1.18% supported mainly by the stronger employment change data released on Thursday 18th, where it was forecasted 9K and the change reported was 34.7K. The worst performer was the Loonie which fell -0.33% after the BoC decision that kept the interest rate at a 1.25%.
DOLLAR – US GOVERNMENT SHUTDOWN STILL WITHOUT A DEAL.
This week the US agenda will be driven by the Government shutdown and the deal expectation that the Republican Senate could achieve with Democrats. On the economic side, the main macroeconomic events will be from the housing market, in both Existing Home Sales and New Home Sales, a moderated decrease is expected.
Technically, the US Dollar Index is in a range between 89.99 and 90.8. RSI is showing bullish divergence signals. The price could make a new low to the 89.6 area before it starts a new bullish cycle.
EUR – WHAT TONE WOULD DRAGHI TAKE IN THE NEXT ECB MONETARY POLICY DECISION?
This Thursday 25th, the market volatility will be led by the Mario Draghi tone in the ECB Monetary Policy Decision Conference. Investors are expecting answers to the following questions: When will the first interest rate hike be? When will the QE end? What is his opinion about the strength of the Euro and the inflation level due to the climb in oil prices? Also, the market is expecting news about his successor in the ECB Presidency.
On the technical side, in the short term, the price remains bullish. Our vision is a limited appreciation of the common currency to 1.239 area for then start a new bearish cycle that could reach the 1.15 area.
GBP – COULD IT BE MAKING A TERMINAL PATTERN?
The Sterling has a gaining momentum as it approaches 1.40 level. In this area, we find the 2nd weekly resistance level (1.406); our vision is that in this area the pound could find resistance and start a corrective structure in the first instance to 1.384, and the second instance to 1.373 level.