Market -Weekly Outlook Oct 29 2018

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In the week ahead, the global financial market will shift their focus to Friday’s U.S. jobs data for October for further indications on the health of the U.S economy at a time when concerns over rising interest rates. The focus will also be on meetings of central banks in the UK and Japan, without any changes expected.

Before we continue, let’s highlight U.S Dollar index technical analysis for the week ahead, for further information about the strength of the U.S dollar…

U.S Dollar Index, Outlook Remains Higher!

As long as 96.00 support holds on a daily closing basis, the U.S dollar index remains on the upside to 96.50 level, a halt is likely, a test to 96.00 before going up is suggested, however; above 96.50 will aim 97.00 levels, further upside, resistance comes at 97.45 ahead of 97.70 level.

On the downside, below 96.00 sees a corrective pullback risk to 95.70/95.18 levels before another rise, anyway; If 95.18 fails to hold, the risk will be shifted to the downside to 94.58/94.15 levels.

Conclusion: The U.S dollar index continues to face upside threats above 96.00 levels.

Support: 96.00, 95.70, 95.18, 94.58

Resistance: 96.50, 97.00, 97.45, 97.70

Here is a list of the most important events that are likely to affect the market:

Tuesday, October 30

Germany will release data on consumer price inflation for Oct at 08:55 GMT. The forecast is to go up -12K, from -23K a month earlier.

The U.S will release data on consumer confidence for Oct at 14:00 GMT. The forecast is to fall to 136.0, from 138.4 in the preceding month. Above forecast will support the USD.

Wednesday, October 31

The Bank of Japan will announce its benchmark interest rate and publish a rate statement. The announcement will be followed by a press conference. The central bank is expected to keep its short-term interest rate target at minus 0.1% and the 10-year government bond yield target at around zero percent at the conclusion of its two-day meeting on Wednesday.

Thursday, November 1

The UK will release data on Manufacturing PMI (Oct) at 09:30 GMT. The forecast is to dip a little bit to 53.1, from 53.8 a month earlier. Above forecast will support the GBP which means a selling opportunity for GBPUSD.

The Bank of England will announce its latest monetary policy decision and Governor Mark Carney will hold a press conference at 12:30 GMT. The central bank is expected to keep its short-term interest rate target at 0.75% as the previous month.

Remember, any news or rumors have to do with Brexit will have a strong impact on GBPUSD or GBP in general…

The U.S will report on ISM Manufacturing PMI for Oct at 14:00 GMT. The forecast is to slip to 59.0, from 59.8 in the preceding month. Any reading above forecast will support the USD.

Friday, November 2

Germany will report on its Manufacturing PMI for Oct at 08:55 GMT. The forecast is to remain unchanged as the previous month at 52.3.

The UK will report on Construction PMI for Oct at 09:30 GMT. The forecast is to dip a bit 52.0, from 52.1 a month earlier.

The U.S will report on Nonfarm Payrolls for Oct at 12:30 GMT. The forecast is to jump to 191K, from 134K a month earlier. Above forecast will support the U.S dollar.

The U.S will also report on the Unemployment Rate for Oct at 12:30 GMT The forecast is to inch up to 3.8%, from 3.7% in the preceding month. Below-forecast will support the U.S dollar. Above forecast us negative for the USD.

How both reports (Nonfarm Payrolls & Unemployment Rate) will affect the market?!

Scenario # 1: If both reports are positive, the USD will rise…

Scenario # 2: If both reports are negative, the USD will fall…

Scenario # 3: One report is positive and the other is negative?!! The USD will consolidate with an upside bias, mostly the market won’t make a big move.

Conclusion: U.S jobs report is likely to bring a buying opportunity for the USD.

You can follow the rest of the week’s economic events by visiting:

Live Economic Calendar

 

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