Week Ahead November 4th – 8th
EURUSD pair closed last week’s trading session higher on disappointing US non-farm payroll and hawkish ECB officials’ comments. US Non-farm payroll came out at only 14K new jobs, a number that haven’t seen since the covid 19 pandemic. Economist are blaming Boeing and hurricane, although this should be reconsidered in the next nonfarm payrolls as is not balancing with ADP employment and jobless claims. From Euro side, ECB’s President Lagarde highlighted that Eurozone should continue to show a sustainable inflation before reconsidering another rate cut. The same line was followed by other ECB’s officials highlighting that the central bank should not follow aggressive rate cuts.
As for this week, traders and investors will mainly focus on the outcome of the US presidential election, due to be starting coming out early hours on Wednesday and FOMC interest rate decision, due to be released on Thursday. FED is expected to cut interest rates by 0.25% on this meeting, finalizing its rate cuts policy for 2024. The rated cut is generally anticipated and priced-in the current exchange rate of the pair, although, following the press conference comments for 2025 interest rate policy will generate some volatility. The light economic calendar will most probable overshadowed by the election’s results. From Euro side ECB’s officials including president Lagarde are due to speak throughout the week. We do not expect any change int their interest rate stance, although is good to hear what they have to say.
On the economic calendar we have on Tuesday, the US ISM services PMI pointing lower at 53.3 On Thursday, European retail sales higher at 0.3% On Friday, US Michigan consumer sentiment expected lower at 70.
Technically the picture is neutral after last week’s close just on (61.8%) at 1.0833 In this week’s trading session if pair trades on the upside will re-test 1.0908 (50%) If trades on the downside will re-test 1.0760 last week’s lowest level. Our traders are net long with positions between 1.0767 – 1.0930 targeting profits above 1.1000 We are expecting new short positions above 1.0913 and more aggressive long positions on the way down.
GBPUSD pair closed last week’s trading session lower on UK governmental decision to add VAT on education and rise taxes in order to boost government’s problematic budget. The significant higher increase is short term borrowing weighted negative on GBP. After the sharp decline in GBP chancellors try to play down the new Taxes, highlighting that are necessary to restore fiscal stability. By the end of the week the pair manage to recover almost all of lost ground after disappointing US Non-farm payroll release.
As for this week, traders and investors will mainly focus on the outcome of the US presidential election, due to be starting coming out early hours on Wednesday. The FOMC interest rate decision, due to be released on Thursday. FED is expected to cut interest rates by 0.25% on this meeting, finalizing its rate cuts policy for 2024. The rated cut is generally anticipated and priced-in the current exchange rate of the pair, although, following the press conference comments for 2025 interest rate policy will generate some volatility. BOE interest rate decision is due to be released on Thursday. The central bank is expected to cut rates by 0.25% Although given the recent decline in GBP due to additional taxes, may affect the policy and the central bank will pull back for now.
On the economic calendar we have on Tuesday, the US ISM services PMI pointing lower at 53.3 On Friday, US Michigan consumer sentiment expected lower at 70.
Technically the pair’s overall picture is negative after last week’s close below (61.8%) at 1.2920 As for this week, if pair trades on the upside, will test 1.2973 (61.8%) Alternative, if trades on the downside, will re-test 1.2842 last week’s lower level. Our traders are net long between 1.3038 and 1.2867 targeting profits above 1.3200 We are expecting new short positions above 1.3200 and more aggressive long positions on the way down.
Per un calendario economico più dettagliato, visitate il nostro calendario economico in tempo reale su:
https://tentrade.com/economic-calendar/
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