Despite the depressing headline figure, the September US NFP Jobs report was another breakthrough on the road to the Federal Reserve’s tapering asset purchases. Hawkish expectations for the Federal Reserve per bond and rates markets are now the most aggressive they’ve been all year.
A quiet week ahead for the EU, with data releases primarily made up of tier two and three releases. The only exception being the ZEW economic sentiment figures on Tuesday.
Looking ahead, all the major economic data that are due will be released in the second half of the week.
On Monday, Canadian banks will be closed in observance of Thanksgiving Day and US banks will be closed in observance of Columbus Day.
On Wednesday, the weekly US MBA mortgage applications and the September US CPI inflation report will be released in the morning, while the September FOMC meeting minutes and a speech by Fed Governor Lael Brainard will in the afternoon.
On Thursday, Fed Governor Michelle Bowman will deliver a speech in the morning before of the releases of the weekly US jobless claims figures, the September US produce price index (PPI), and a speech from Atlanta Fed President Raphael Bostic. Later in the day, Richmond Fed President Tom Barkin will deliver remarks and the September US budget statement will be released.
On Friday, the September US retail sales report, the preliminary October US Michigan consumer sentiment survey, and the August US business inventories report will be released. In the afternoon, NY Fed President John Williams will give a speech.
Major Currencies Performance and Signals
EUR/USD
The euro fell again hard last week and, in the week, ahead, the only number of note is the ZEW index of German economic sentiment due on Tuesday. We remain bearish.
FORECAST: SELL
Resistance: 1.1600, 1.1650, 1.1700,
Support: 1.1550, 1.1500, 1.1450,
GBP/USD
As several fears are faded, the Cable has continued its rebound. Next week, markets will be influenced by US inflation statistics, UK employment figures, energy costs, and Brexit. Bears are in control of the daily chart as of mid-October.
FORECAST: SELL
Resistance: 1.3650, 1.3700, 1.3750
Support: 1.3600, 1.3550, 1.3500
AUD/USD
The Aussie pair kept the most recent rebound, just above the 0.73 price line. The pair seems indecisive still and we remain neutral the coming week.
FORECAST: NEUTRAL
Resistance: 0.7350, 0.7400, 0.7450,
Support: 0.7300, 0.7250, 0.7200
USD/JPY
USD/JPY’s rally resumed last week by breaking 112.07 temporary top and hit as high as 112.24. The initial bias stays on the upside this week and we expect the trend to continue.
FORECAST: BUY
Resistance: 112.50, 113.00, 113.50
Support: 112.00, 111.50, 111.00
USD/CAD
The US Dollar was hit hard against the Canadian dollar reaching the 1.2450 support level. We remain bearish for the next week as we expect the momentum to continue.
FORECAST: SELL
Resistance: 1.2650, 1.2700, 1.2750
Support: 1.2600, 1.2550, 1.2500
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