Last Week Recap
with the lack of important economic news from the US last week, the U.S dollar ticked down against a basket of the other major currencies as we expected before, anyway; before we continue let’s take a quick look at the U.S dollar index, to see the strength of the US dollar against major currencies.
U.S Dollar Index; Consolidates With Upside Bias!
As long as 94.51 resistance holds on a daily closing basis, the U.S dollar index remains on the downside to the 93.85 levels, a halt is likely and it may turn higher from here, however; below 94.51 sees a fall risk to the 93.32/93.02 levels, further down, support comes at the 92.45 levels.
On the upside, above 94.51 will attack the 95.02 levels, a halt is very likely and it may turn lower but a break will extend gains to the 95.57 levels, further upside will aim the 96.21 levels.
Conclusion: The U.S dollar index sees fall risks below 94.51 level with caution.
Notes: 1- We have a double top pattern at the 95.02 levels, so stability below this level will open the door for further downside, the pair is likely to see consolidation below 95.02 levels.
2- On the downside, any downside move is supposed to be contained well by the 92.45/93.00 levels.
In the week ahead, the global financial markets will shift their focus to the U.S, UK, eurozone, and Canada since all set to release CPI numbers in the coming days. Market players will also be focusing on the Central Bank Communications Conference hosted by the ECB, with a panel discussion including the heads of the European, U.S, British and Japanese central banks in the spotlight.
Here is a list of the biggest events on the economic calendar that are most likely to affect the markets this week:
1-UK CPI Figures
The U.K will release data on consumer price inflation for October at 0930 GMT on Tuesday. Analysts expect annual CPI to reach a five-year high of 3.1% from 3.0% a month earlier.
On Wednesday, the U.K will report on Average Earnings Index +Bonus (Sep) & Claimant Count Change (Oct).
On Thursday the U.K will report on Retail Sales for Oct at 09:00 GMT. Analysts expect a rise 0.1%, from -0.8% a month earlier.
2- ECB Conference
European Central Bank President Mario Draghi, Federal Reserve Chair Janet Yellen, Bank of Japan Governor Haruhiko Kuroda and Bank of England Governor Mark Carney are among central bankers due to speak at an event hosted by the ECB in Frankfurt at 10:00 GMT on Tuesday. The panel discussion, titled “At the heart of policy”, volatility is expected…
In the same day, Germany will report on GDP (QoQ) (Q3) & ZEW Economic Sentiment.
3- U.S Inflation Numbers!
The U.S will publish October inflation figures at 13:30 GMT on Wednesday. Market analysts expect consumer prices to rise 0.1%, while core inflation is forecast to jump to 0.2%. On a yearly base, core CPI is expected to jump to 1.7%.
At the same time, the U.S will report on Retail Sales for Oct, analysts expect a decline to 0.1% from 1.6% a month earlier.
On Tuesday, the U.S will report on Philadelphia Fed Manufacturing Index at 13:30 GMT. Analysts expect a decline to 24.1, from 27.9 in the previous month.
On Friday, the U.S will release data on Building Permits, analysts expect a rise to 1.243M, from 1.215M in the preceding month.
4- Euro Zone Consumer Inflation
The eurozone will publish final inflation figures for October at 10:00 GMT on Thursday. Analysts expect that consumer prices will remain unchanged as the previous release at 1.4%, below the European Central Bank’s target.
5- Canada Inflation Data
Canada will release October consumer price inflation data at 13:30 GMT on Friday. The report is expected to show that inflation increased 0.1% last month. On a yearly base, CPI is expected to climb 1.4%.
You can follow the rest of the week’s economic events by visiting:
Conclusion: Since U.S dollar index trades below 95.02 levels, a consolidation is likely this week, only a clear break above 95.02 will advance the U.S dollar further higher. Recommendations remain to buy the U.S.D on dips.