EURUSD bear trend resumption threat

  • We stressed in our last report to clients that “the midweek plunge post-FOMC has eroded 1.2614/05 supports and aims for the lower end of the range at chart and retrace support at 1.2583. The growing threat this week is for a break below here and a more bearish shift”.
  • The push below 1.2583 has seen a shift to a more negative theme and sees bearish extension pressures into early November and maybe even for a test to 1.2500 today
  • We now see the bias lower in November through 1.2500 for a key 1.2460 retrace target, .maybe for 1.2295 and 1.2240.

WHAT CHANGES THIS?

  • Above 1.2630/40 eases bear risks; through 1.2771 signals a neutral tone, only shifting positive above 1.2840/45.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/EURUSD.pdf

4 Hour EURUSD Chart

 

 

Weekly EURUSD Chart

 

 

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GBPUSD bear trend resumption threat

  • We have stressed in our recent reports to clients that “the previous roll back from the 1.6186 level ahead of the solid barrier at 1.6228 see bias for a roll back to the rebound range for 1.5995 and 1.5940 later this week”.
  • The plunge back from 1.6186 through 1.5995 aims for 1.5940 into Thursday and still lower through month-end.
  • We still see a more negative theme into late October/ early November for extension below 1.5875 to the 1.5854 weekly swing low from Q4 2013.
  • Below here, sees threat lower to aim for chart/ 61.8% retrace support 1.5750/20.

WHAT CHANGES THIS?

  • Above 1.6186 signals a base and neutral tone, now shifting positive above 1.6228.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/GBPUSD.pdf

Daily GBPUSD Chart

 

Weekly GBPUSD Chart

 

 

 

 

 

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For many babyboomers, one of their earliest movie recollections was of Yul Brynner playing the part of the King of Siam in the “The King and I”. He was a Russian-born United States-based film and stage actor with stage presence to the hilt. When confronted with a modern world, changing at a record pace way back in the 1860s, the King muttered in a solo song his bewilderment at not knowing what to do. His last line bundled everything together, as if all of life “is a puzzlement.” The plight of the Euro is the same today, a puzzlement that defies accurate prognostication.

There have been a multitude of articles written about the current Euro drama, since, as we all know, the “EUR/USD” pair is the undisputed volume leader in the forex world. As such, it is near impossible to hide from public scrutiny, but most of these opinionated pieces are sanguine in nature. The blood literally drips from the page, since the latest drop from grace revealed a weak underbelly that no one had seen before in public view. It had previously bounced between a tight range for five months, but in April, it obeyed gravity and plummeted from 1.37 down to 1.25. In October, it has been stuck between this low point and 1.29, as the chart below illustrates:

 

Despite a month-long ranging period of indecision, the Euro appears to be forming an upward recovery trend line, a modest rebound from the pounding it took from the U.S. Dollar. The recovery, however, has been weak, never able to penetrate stiff resistance at 1.29 or the 23.6% Fibonacci line for its major decline. Volatility has also subsided, and the Stochastics indicate an overbought condition. From a technical perspective, the new bottom has a temporary nature about it, as if waiting for the next round to start.

Will the Euro get pummeled again after the bell starts the next round? Our community of analysts does smell blood in the water at present. According to recent CFTC reports from the futures markets, gross long positions remained unchanged at 60K contracts, but short positions increased 4% to 220K, a decided bias for more downside risk. These large investors have been wrong on the Euro many times, but a nearly 4:1 ratio is hard to ignore in the scheme of things.

When one reviews the fundamentals, the picture begins to dim even more. Tensions in the Ukraine and Middle East will threaten natural gas and oil imports for the winter to come. Quantitative easing can only dilute the value of the combined currency. Inflation refuses to budge upward from its 2-year downward slide, and even the stronger member states (Germany, France and Italy) are reporting poor economic performance of late. The IMF recently modified their forecasts for the region to include the possibility for another recession, not good in relative terms when other regions are gradually rising.

Can Germany pull its neighbors away from the brink? Germany in the past has been the stalwart economic performer, always bringing the EU’s averages up. Unfortunately, business confidence has been waning for the past six months in Deutschland. Exports fell 6% in September, not a good sign when exports account for nearly half of its GDP growth statistic. While other member states were struggling with domestic issues, Germany was riding high on demand from China for its products. That demand has decidedly dampened, thereby removing Germany’s big claim to fame. When Germany falters, there is no one left to pick up the slack.

The Euro outlook may seem bleak, but forex reserve managers have yet to weigh in.

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Euro Up but Correction Looming

 

Figure: Hourly chart for EUR/USD

The EUR/USD continues to trade in a very narrow trading range, but still maintains a positive bias. Yesterday, the Euro climbed higher against the dollar after reports circulated that U.S. Durable Goods data had failed to meet expectations. According to the report, durable goods fell by over 1.3 % as opposed to gaining 0.5%.

Thanks to a weakening Greenback, the Euro is in the midst of a strong upwards trend. Analysts though continue to urge caution, as economic reports continue to forecast an overall slowdown in all of Europe.

Traders should shift their focus to the upcoming release of the FOMC Statement that will be presented at 19:00 GMT. Any mention about a hike in interest rates within a given time line will send the USD surging and the Euro tumbling. Most analysts however, expect the Federal Reserve to be on board with discontinuing its Quantitative Easing program.

When looking at the hourly chart for EUR/USD, the currency pair continues to trade with resistance at approximately $1.27640 and support at around $1.27190. The momentum indicator continues to trade in bullish territory, indicative of strong buying interest at the current moment.   Additionally, the relative strength index is displaying its first sign of an imminent reversal, which will be closely monitored for any impending downtrend. Lastly, it is imperative to state that the currency pair is trading above its daily moving average.

Actionable Insight:

Short the EUR/USD if it moves below $1.27190 for a short-term target at $1.26980 with a strict stop loss at $1.27640

Long the EUR/USD if it moves above $1.27640 for a short term target at $1.2800

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USDCAD defensive range tone, but risk of a bear swing

  • We have retained a negative outlook into this week and stated in our last report that “for Tuesday, we again see a cap at 1.1296/98, likely 1.1265/70 and a negative bias for chart supports at 1.1185/84 and maybe to 1.1159”.
  • The break below 1.1185/84 leaves risk through 1.1159 through midweek within the late October range theme between 1.1298 and 1.1125, neckline support.
  • The growing threat for late October is to test the neckline and for a more bearish shift.

WHAT CHANGES THIS?

  • Downside: Below 1.1125 sees risk lower for 1.1080/70 and 1.1053.
  • Upside: Above 1.1298 aims higher for 1.1362/86 and 1.1435.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/USDCAD.pdf

2 Hour USDCAD Chart

 

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The moaning and groaning has stopped in financial markets, at least those cries of anguish caused by a total lack of volatility over the summer months. Volatility has returned in a big way in October, and now a cacophony of new moans and groans are filling the hallways because of its reappearance. Sounds like traders are always a complaining lot, even when they get what they want – more volatility generally means more opportunity for trading gains, if you are an accomplished trader.

As we all know, financial markets are heavily correlated, since the same fundamentals are always at work, no matter the venue. Forex pairs dance in tandem with the S&P 500 index, as well as with bond prices in general. The intensity of the dancing is in direct proportion to associated risk parameters, a fact that is beginning to raise eyebrows. Yes, there have been a plethora of recent articles on this topic, foreshadowing doom and gloom on the horizon, but, when a central banker goes on the record publicly, then it is time to look a little closer.

Guy Debelle, an Assistant Governor of the Reserve Bank of Australia, recently spoke before a gathering of bankers in Sydney, Australia and highlighted his concerns in a compelling speech. The chart below introduced an historical perspective on the topic of volatility in financial markets and how well correlated they are:

The sources of the data were drawn from Bloomberg and Reuters data bases. You should also note that the “Three-month rolling average” aspect of the chart has severely dampened the spike that is underway in October, but a simple visual trend upwards appears to be forming, nonetheless. In some regards, volatility has a way to go before hitting historical mean values.

Is October any different than any other month? One might think that the “Sell in May and go away” crowd might influence seasonal trends, and the following chart confirms this hypothesis:

The data may be for stocks, but as noted earlier, forex markets do correlate closely with the S&P 500, since those stocks derive nearly half of their revenue from activities in the global marketplace. October does stand out, almost like the “Head” of an H&S pattern. You might be inclined to expect a decline in volatility in November and December, based on the this chart alone, but these absolute averages span nearly fifty years of market behavior, and the Great Recession and the years that have followed have been anything but average or normal.

Most analysts at this stage are forming a consensus that volatility is here to stay, at least for the foreseeable future through yearend. The support for this assumption is that there are already too many global uncertainties in the market (i.e., GDP growth, interest rate changes, geopolitical tensions, deflation, commodity prices, etc.) that will not resolve themselves in so short a period of time. There is, however, no need to go hide in a cave. Volatility this October is barely over one percent, not nearly as bad as in 2008 and 2009 when 3% daily changes were almost the norm.

What is Debelle’s major concern? He says quite succinctly that, “There are also some misplaced perceptions amongst market participants about the degree of liquidity present in some market segments. That strikes me as a dangerous combination and unlikely to be resolved smoothly.” In other words, if fear and uncertainty run rampant, some markets may seize up, as in 2008/2009 when sell orders could find no buyers.

Is Debelle correct? When and if the selling occurs, the Australian Dollar will have nowhere to go but down.

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EURUSD defensive range tone

  • Despite a modest bounce effort from supports at 1.2605 and more notable 1.2583, we still see a broader range theme into late October, defined by 1.2583 and 1.2840/45.
  • Moreover, we also see narrower range parameters at 1.2740 and 1.2614/05 containing price action into midweek.
  • This leaves the bias for Tuesday for a roll back lower from ahead of 1.2740 towards 1.2665, maybe closer to 1.2614.

WHAT CHANGES THIS?

  • Downside: Below 1.2583 sees risk lower for 1.2500 and 1.2460.
  • Upside: Above 1.2840/45 aims higher for 1.2888 and 1.2902/30 targets.

Download our full report with latest screencast & levels here: http://members.marketchartist.com/Daily/EURUSD.pdf

4 Hour EURUSD Chart

 

 

 

 

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EUR/USD Falling with no End in Sight

 

Figure: Hourly chart for EUR/USD

The Euro dropped significantly against most major currencies in early afternoon trade, a substantial drop-off from its morning opening. The Euro came under intense selling pressure after reports stated that the German IFO index, which calculates the business confidence in the region came in at its lowest level since December 2012, stoking growing concerns regarding the overall health of Europe’s largest economy. The for business confidence level slid to 103.2, substantially weaker than the expected 104.3 reading. This in effect wiped out any gains the Euro may have generated due to positive ECB stress test results.

All eyes should now focus on the European Central Bank, as it is projected to rapidly speed up its bond buying program in order to support a stagnate Eurozone economy. Investors should additionally closely pay attention to the upcoming FOMC minutes, scheduled for release in the latter half of the week.

When looking at the hourly chart for the EUR/USD, it seems to have come under heavy pressure and subsequently broke below a key support level at $1.26904. Additionally, the currency pair has broken below an upward sloping trend-line support with next level of support coming at around the $1.26355 region. The momentum indicator is showing its first signs of a reversal as it is now giving a fresh sell signal. Lastly, the relative strength index is giving a reversal signal which is indicative of the impending downwards-move for the currency pair.

Actionable Insight:

Short the EUR/USD at current levels for a short term target at $1.26355, with a strict stop loss above $1.26904

Long the EUR/USD if it moves above $1.26110 for a near-term target at $1.27140

 

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Key Fundamental Forex Events and Forecasts for the Coming Week

 

The following table lists the key economic data and other events that are due out during the week of October 27th – October 31st, with release times displayed for the GMT time zone.

 

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

 

Sunday, October 26th

  • 3:00am CHF Daylight Saving Time Shift
  • 3:00am EUR Daylight Saving Time Shift
  • 3:00am GBP Daylight Saving Time Shift
  • 12:00pm EUR EBA Bank Stress Test Results (lower failures = good for currency)
  • 12:00pm EUR ECB Stress Test Results (lower failures = good for currency)
  • All Day NZD Bank Holiday

 Monday, October 27th

  • 10:00am EUR German Ifo Business Climate (104.6 expected, > good for currency)
  • 10:00am EUR M3 Money Supply (2.2% expected, < good for currency)
  • 10:00am EUR Private Loans (-1.3% expected, > good for currency)
  • 12:00pm GBP CBI Realized Sales (29 expected, > good for currency)
  • 3:00pm USD Pending Home Sales (1.1% expected, > good for currency)
  • 7:30pm GBP MPC Member Shafik speaks (hawkish = good for currency)

 Tuesday, October 28th

  • 12:50am JPY Retail Sales (0.9% expected, > good for currency)
  • 1:30pm USD Core Durable Goods Orders (0.5% expected, > good for currency)
  • 1:30pm USD Durable Goods Orders (0.4% expected, > good for currency)
  • 3:00pm USD CB Consumer Confidence (87.4 expected, > good for currency)
  • 6:30pm GBP MPC Member Cunliffe speaks (hawkish = good for currency)

 Wednesday, October 29th

  • 12:50am JPY Preliminary Industrial Production (2.3% expected, > good for currency)
  • 1:00am NZD ANZ Business Confidence (13.4 expected, > good for currency)
  • 10:30am GBP Net Lending to Individuals (2.8B expected, > good for currency)
  • Tentative EUR German 10-year Bond Auction (< average yield and > bid to cover ratio = good for currency)
  • 1:30pm CAD RMPI (1.5% expected, > good for currency)
  • 3:30pm USD Crude Oil Inventories (last 7.1M expected, > good for currency)
  • 6:30pm GBP MPC Member Haldane speaks (hawkish = good for currency)
  • 7:00pm USD FOMC Statement (hawkish = good for currency)
  • 7:00om USD Federal Funds Rate Decision (unchanged at <0.25% expected, > good for currency)
  • 9:00pm NZD Official Cash Rate Decision (unchanged at 3.50% expected, > good for currency)
  •  3.50% NZD RBNZ Rate Statement (hawkish = good for currency)
  • 9:15pm CAD BOC Governor Poloz speaks (hawkish = good for currency)

 Thursday, October 30th

  • 1:30am AUD Import Prices (0.3% expected, > good for currency)
  • 8:00am GBP Nationwide HPI (0.4% expected, > good for currency)
  • All Day EUR German Preliminary CPI (-0.1% expected, > good for currency)
  • 8:45am GBP MPC Member Cunliffe speaks (hawkish = good for currency)
  • 9:00am CHF KOF Economic Barometer (99.2 expected, > good for currency)
  • 9:00am EUR Spanish Flash CPI (0.0% expected, > good for currency)
  • 9:00am EUR Spanish Flash GDP (0.5% expected, > good for currency)
  • 9:55am EUR German Unemployment Change (4K expected, < good for currency)
  • Tentative EUR Italian 10-year Bond Auction (< average yield and > bid to cover ratio = good for currency)
  • 1:30pm USD Advance GDP (3.1% expected, > good for currency)
  • 1:30pm USD Weekly Initial Jobless Claims (277K expected, < good for currency)
  • 1:30pm USD Advance GDP Price Index (2.0% expected, > good for currency)
  • 2:00pm USD Fed Chair Yellen speaks (hawkish = good for currency)
  • 10:45pm NZD Building Consents (0.0% expected, > good for currency)

 Friday, October 31st

  • 12:30am JPY Household Spending (-4.0% expected, > good for currency)
  • 12:30am JPY Tokyo Core CPI (2.5% expected, > good for currency)
  • 1:30am AUD PPI (-0.1% expected, > good for currency)
  • Tentative JPY Monetary Policy Statement (hawkish = good for currency)
  • 7:00am JPY BOJ Outlook Report (hawkish = good for currency)
  • Tentative JPY BOJ Press Conference (hawkish = good for currency)
  • 8:00am EUR German Retail Sales (-0.8% expected, > good for currency)
  • 8:45am EUR French Consumer Spending (-0.3% expected, > good for currency)
  • 11:00am EUR EZ CPI Flash Estimate (0.4% expected, > good for currency)
  • 11:00am EUR EZ Core CPI Flash Estimate (0.8% expected, > good for currency)
  • 11:00am EUR EZ Unemployment Rate (11.5% expected, < good for currency)
  • 1:30pm CAD GDP (0.0% expected, > good for currency)
  • 1:30pm USD Core PCE Price Index (0.1% expected, > good for currency)
  • 1:30pm USD Employment Cost Index (0.6% expected, > good for currency)
  • 1:30pm USD Personal Spending (0.2% expected, > good for currency)
  • 2:45pm USD Chicago PMI (60.2 expected, > good for currency)
  • 2:55pm USD Revised University of Michigan Consumer Sentiment survey (86.4 expected, > good for currency)

 Saturday, November 1st

2:00am CNY Manufacturing PMI (51.1 expected)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Mildly Lower

Resistance:

Initial: 1.2676, 1.2692/98, 1.2715, 1.2744/54. 1.2791/1.2805, 1.2815/21, 1.2834/79, 1.2900/04, 1.2919/21, 1.2978/98, 1.3000/03, 1.3047, 1.3059/66, 1.3077, 1.3093/1.3109, 1.3126, 1.3130, 1.3152/65, 1.3172/77, 1.3187/1.3206, 1.3220/42, 1.3294/99, 1.3305/08, 1.3318/24, 1.3332/35, 1.3344/53, 1.3366, 1.3376/89, 1.3398/1.3416, 1.3432/44, 1.3451, 1.3473/82, 1.3489/1.3524, 1.3538, 1.3546/88, 1.3597, 1.3602/15, 1.3621/31, 1.3639/50, 1.3663/76, 1.3682/86, 1.3685/1.3710, 1.3714/16, 1.3731/39, 1.3748, 1.3758/74, 1.3784/98, 1.3807, 1.3810/20, 1.3824, 1.3832/36, 1.3845/54, 1.3864, 1.3875/78, 1.3888/92, 1.3905/14, 1.3937, 1.3947 and 1.3966/69.

Above: 1.3993/1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.2661/63, 1.2623/25, 1.2613, 1.2605, 1.2588/89, 1.2570, 1.2514/19, 1.2500/01, 1.2407/96, 1.2381/91, 1.2323/33, 1.2241/55, 1.2162, 1.2143 and 1.2133.

Below: 1.2041 and 1.1938.

 

USDJPY: Higher

Resistance:

Initial: 108.24, 108.42, 108.98, 109.45, 109.53, 109.90 and 110.08.

Above: 110.39/47, 111.60 and 111.78.

Support:

Initial: 108.00, 107.38/39, 107.18, 107.05, 106.80, 106.24, 105.70, 105.41/43, 105.30/33, 105.18, 104.83/91, 104.63/68, 104.36, 104.07/26, 103.91, 103.82, 103.73/75, 103.37/43, 103.30, 102.92/103.08, 102.57/82, 102.49/52, 102.33/40, 102.26, 102.13/14, 101.90/102.04, 101.60/83, 101.50/56, 101.42/43, 101.30/32, 101.08/27, 100.82/86, 100.75, 100.60/65, 100.38/48, 100.22 and 100.00.

Below: 99.94, 99.66, 99.40, 99.25, 99.13/14, 99.00, 98.84/92, 98.63/72, 98.48/53, 98.28, 98.20, 98.08, 97.75/83, 97.49/63, 96.90/97.05, 96.81, 96.65/70, 96.55/56, 96.05, 95.79/80, 95.44, 94.90/95.07, 94.87, 94.55, 94.19, 94.05, 93.76, 93.78 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

 

GBPUSD: Lower

Resistance:

Initial: 1.6096/98, 1.6109/21, 1.6130/36, 1.6155, 1.6161, 1.6177/83, 1.6195/98, 1.6204/15, 1.6215/16, 1.6222/26, 1.6237/46, 1.6251/62, 1.6280/86, 1.6290, 1.6298/1.6309, 1.6336, 1.6348, 1.6357, 1.6376, 1.6380/83, 1.6394, 1.6400, 1.6415/18, 1.6441/44, 1.6458/65, 1.6484, 1.6496, 1.6516, 1.6524, 1.6534, 1.6548, 1.6576/86, 1.6592, 1.6611/17, 1.6624, 1.6640/56, 1.6665/67, 1.6683, 1.6692/98, 1.6716/24, 1.6730/37, 1.6745, 1.6755, 1.6765/68, 1.6777, 1.6785, 1.6800/02, 1.6812, 1.6819/22, 1.6831/44, 1.6874/87, 1.6902/09, 1.6919/20, 1.6951, 1.6960, and 1.6995.

Above: 1.7000, 1.7010, 1.7035, 1.7042/51, 1.7058/62, 1.7084, 1.7094/99, 1.7107, 1.7130, 1.7167, 1.7176/78, 1.7190 and 1.7440.

Support:

Initial: 1.6071/83, 1.6051/66, 1.6001/08, 1.5975/94, 1.5956/61, 1.5948/51, 1.5900/27, 1.5886/93, 1.5874/77, 1.5853, 1.5844, 1.5825, 1.5803/07, 1.5775/81, 1.5750, 1.5714/17, 1.5683/92, 1.5673, 1.5624/56, 1.5601/15, 1.5591, 1.5561/68, 1.5538/45 and 1.5514/16.

Below: 1.5498/99, 1.5476/79, 1.5458, 1.5434, 1.5427, 1.5403/21, 1.5313/92, 1.5304, 1.5293, 1.5260/62, 1.5237/39, 1.5208/23, 1.5198, 1.5173/87, 1.5164, 1.5152/57, 1.5130, 1.5123, 1.5101, 1.5092, 1.5081, 1.5072/75, 1.5026/32, 1.5013, 1.5007. 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4856, 1.4830, 1.4812 and 1.4785, 1.4345 and 1.4232.

 

AUDUSD: Lower

Resistance:

Initial: 0.8812, 0.8819/25, 0.8842/47, 0.8857/61, 0.8869, 0.8887/97, 0.8906/12, 0.8918/20, 0.8923/36, 0.8951/57, 0.8967/69, 0.8981/87, 0.8994/0.9010, 0.9035, 0.9041, 0.9042/48, 0.9054/57, 0.9061/66, 0.9072/79, 0.9102, 0.9110/19, 0.9127/37, 0.9147, 0.9162/67, 0.9179/89, 0.9200/08, 0.9214/26, 0.9232/74, 0.9286/94, 0.9304, 0.9311, 0.9328/34, 0.9343/53, 0.9359, 0.9386/0.9410, 0.9420/24, 0.9428/33, 0.9440/47, 0.9455/57, 0.9469 and 0.9483/86.

Above: 0.9500, 0.9524/27, 0.9536/42, 0.9571, 0.9585, 0.9592, 0.9620, 0.9640, 0.9664, 0.9676, 0.9689/96, 0.9710, 0.9732, 0.9757, 0.9791/94, 0.9841/96, 0.9900, 0.9925/83, 1.0000/18, 1.0052, 1.0099/1.0100, 1.0114/17, 1.0148/51, 1.0165/77 and 1.0181/82.

Support:

Initial: 0.8784, 0.8762/73, 0.8747, 0.8729, 0.8693, 0.8651/62, 0.8641, 0.8578 and 0.8512.

Below: 0.8066 and 0.7674.

 

USDCAD: Mildly Higher

Resistance:

Initial: 1.1269/77, 1.1295 and 1.1384.

Above: 1.1723, 1.2985, 1.3007/14 and 1.3062.

Support:

Initial: 1.1221/29, 1.1194, 1.1168/73, 1.1158, 1.1152, 1.1141, 1.1116/32, 1.1102/09, 1.1097/99, 1.1081/89, 1.1069/70, 1.1030/53, 1.0982/1.1001, 1.0962/66, 1.0954/59, 1.0941/45, 1.0934, 1.0925/28, 1.0915, 1.0903/09, 1.0894,1.0873/86, 0852/59, 1.0849, 1.0839/40, 1.0820/27, 1.0813, 1.0793/96, 1.0742/85, 1.0736, 1.0726, 1.0717, 1.0702/09, 1.0693, 1.0668/79, 1.0646/60, 1.0619/29, 1.0608,1.0580/87, 1.0567/71, 1.0558/59, 1.0546, 1.0519/22, 1.0506, 1.0496/1.0502, 1.0471/87, 1.0459, 1.0441/44, 1.0414/18, 1.0401/04, 1.0390/92, 1.0379, 1.0355/68, 1.0333, 1.0324, 1.0309/12, 1.0283/1.0305, 1.0270/76, 1.0262, 1.0244/55, 1.0233/35, 1.0199/1.0226, 1.0172/82, 1.0165, 1.0151/56, 1.0148, 1.0128/42, 1.0103/05, 1.0081/99, 1.0050/56, 1.0029/34, 1.0018 and 1.0012.

Below: 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26, 0.9724/99, 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

 

NZDUSD: Lower

Resistance:

Initial: 0.7856/57,  0.7872/75, 0.7888, 0.7903/06, 0.7927/32, 0.7967, 0.7989/0.8013, 0.8030, 0.8040, 0.8049/60, 0.8075/82, 0.8100/09, 0.8114/37, 0.8147/53, 0.8160/76, 0.8186, 0.8195/97, 0.8204/14, 0.8221/41, 0.8250/55, 0.8263, 0.8268/71, 0.8280, 0.8285/87, 0.8291/95, 0.8302/16, 0.8322/66, 0.8376, 0.8389, 0.8406, 0.8413, 0.8421/61, 0.8472/79, 0.8487/89 and 0.8499.

Above: 0.8504/18, 0.8523/37, 0.8542/53, 0.8560/61, 0.8571/78, 0.8584/90, 0.8602/05, 0.8633/41, 0.8647/53, 0.8660/67, 0.8671/74, 0.8693/0.8700, 0.8712/18, 0.8734, 0.8744, 0.8764/77, 0.8789, 0.8792, 0.8821, 0.8834 and 0.8840.

Support:

Initial: 0.7838/46, 0.7829, 0.7819, 0.7804, 0.7791/95, 0.7783, 0.7760, 0.7751/58, 0.7731/35, 0.7705/23, 0.7697 and 0.7681/86.

Below: 0.7605/76 and 0.7500/85.

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Key Fundamental Forex Events for the Week of October 20th through October 24th
The following table lists the key economic data and other events that came out during the week of October 20th through October 24th, with release times displayed for the GMT time zone.
The list also indicates how much each release deviated from the market consensus forecast upon release, as well as what the affected major currency pair or pairs did after each event or set of events.
Monday, October 20th
1:30pm CAD Wholesale Sales 0.2% versus 0.2% expected.  The currency fell.

Tuesday, October 21st
1:30am AUD Monetary Policy Meeting Minutes noted that, “The decisions of the FOMC and the ECB were followed by sizeable movements in exchange rates, with the US dollar appreciating across the board, including against the Australian dollar. While an appreciation of the US dollar had been anticipated for some time, the exact timing of the appreciation was difficult to explain. The appreciation was associated with an increase in volatility in the main currency pairs, albeit only back towards typical levels. The euro had depreciated by 9 per cent since early May to be at its lowest level against the US dollar in two years, while emerging market currencies had generally depreciated against the US dollar as well. The notable exception was the Chinese renminbi (RMB), which had been little changed against the US dollar and had appreciated in trade-weighted terms by 5 per cent over the preceding year.”  The currency fell.
3:00am CNY GDP 7.3% versus 7.2% expected.
3:00am CNY Industrial Production 8.0% versus 7.5% expected.

Wednesday, October 22nd
1:30am AUD CPI 0.5% versus 0.4% expected.  The currency fell.
9:30am GBP MPC Asset Purchase Facility Votes 0-0-9 versus 0-0-9 expected. The currency fell.
9:30am GBP MPC Official Bank Rate Votes 2-0-7 versus 2-0-7 expected. The currency fell.
1:30pm CAD Core Retail Sales -0.3% versus 0.3% expected.  The currency fell.
1:30am USD CPI 0.1% versus 0.0% expected.  The currency rose.
1:30am USD Core CPI 0.1% versus 0.2% expected.  The currency rose.
3:00pm CAD BOC Monetary Policy Report noted that, “Market sentiment has deteriorated in recent weeks, as evidenced by a repricing of riskier assets. Even with this repricing, however, financial conditions remain accommodative. Credit spreads, especially in the lower-rated credits, as well as bond spreads for emerging markets, have widened from their recent compressed levels, but remain tight by historical standards.” The currency fell.
3:00pm CAD BOC Rate Statement noted that, “Canada’s real GDP growth is projected to average close to 2 1/2 per cent over the next year before slowing gradually to 2 per cent by the end of 2016, roughly the estimated growth rate of potential output. As global headwinds recede, confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path. As the economy reaches its full capacity in the second half of 2016, both core and total CPI inflation are projected to be about 2 per cent on a sustained basis.”  The currency fell.
3:00pm CAD Overnight Rate unchanged at 1.00% versus 1.00% expected.  The currency fell.
4:15pm CAD BOC Press Conference: This press conference was officially cancelled due to a shooting at the Canadian War Memorial. The currency fell.
10:00pm AUD RBA Governor Stevens said that, “While the use of cash is declining relative to other payment mechanisms, it will continue to have a role in the economy. Indeed, as the Bank has noted previously, banknotes on issue have for a long period grown broadly in line with the nominal growth in the overall economy. And the consumer use survey suggests the amount of cash in respondents’ wallets grew between 2010 and 2013. Together, this evidence suggests that cash continues to have a significant role – not just for small-value transactions, but also both as a store of value and for precautionary use when other means of payment are not available.” The currency fell.
10:45pm NZD CPI 0.3% versus 0.5% expected.  The currency fell.

Thursday, October 23rd
2:45am CNY HSBC Flash Manufacturing PMI 50.4 versus 50.2 expected.
8:00am EUR French Flash Manufacturing PMI 47.3 versus 48.6 expected.  The currency was virtually unchanged.
8:30am EUR German Flash Manufacturing PMI 51.8 versus 49.6 expected.  The currency was virtually unchanged.
9:30am GBP Retail Sales -0.3% versus -0.1% expected.  The currency fell.
1:30pm USD Weekly Initial Jobless Claims 283K versus 269K expected.  The currency rose.
10:45pm NZD Trade Balance -1350M versus -620M expected.  The currency rose.

Friday, October 24th
9:30am GBP Preliminary GDP 0.7% versus 0.7% expected.  The currency rose.
3:00pm USD New Home Sales 467K versus 473K expected.  The currency fell.

Technical Recap for the Majors This Week

EURUSD:
Forecast: Mildly Lower
Actual: Mildly lower from a 1.2755 open to a 1.2671 close.

USDJPY:
Forecast: Higher
Actual: Mildly higher from a 107.06 open to a 107.29 close.
    
GBPUSD:
Forecast: Lower
Actual: Mildly Lower from a 1.6095 open to a 1.6030 close.

AUDUSD:
Forecast: Lower
Actual: Mildly lower from a 0.8763 open to a 0.8761 close.

USDCAD:
Forecast: Higher
Actual: Mildly lower from a 1.1280 open to a 1.1255 close.

NZDUSD:
Forecast: Mildly Lower
Actual: Mildly lower from a 0.7928 open to a 0.7861 close.

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