We have an extremely interesting week ahead, during which we can witness stronger fluctuations in the markets. The most important figure of the week is the last, this year's meeting of the ECB, which will take place on 13 September. Market observers assume that the governing council will decide to end the ongoing QE program. Interest rates are also expected to remain unchanged and (probably) remain at current levels by autumn 2019. The ECB will also present new macroeconomic projections for the next year. In this case, investors expect a decline in GDP forecasts, due to the ongoing trade war on the US-China line. Just after the meeting, Mario Draghi will note his speech at the press conference and will answer journalists' questions.
When writing about the events of the next week, it is impossible to ignore recent events that are directly related to the thread of the trade war. Market participants will be trying hard to follow the attempt to resolve differences between the two largest economies in the world. (At the moment, both countries give themselves 90 days to reach a consensus). Investors will also pay attention to the side thread concerning the detention in Canada, the Vice President of the Management Board of Huawei Meng Wanzhou.
Another political event that may weigh on the markets will be the Brexit vote in the British parliament that will take place next Tuesday. In the case of Theresa May's failure, the confusion that arises around this topic may weigh heavily on the pound and the euro. At present, it is assumed that the parliament can opt out against the agreement, which may eventually lead to another referendum or the exit of Great Britain from the EU structures without agreement. The consequence of such a solution would be chaos, which would translate into a strong decline in GDP.
The upcoming week is also a series of important readings on both sides of the ocean. In the foreground, we have consumer inflation and retail sales in the US. Solid readings can rekindle the imagination of investors, who will assume that in 2019, FED will decide to raise interest rates again. However, it is worth remembering that after the last words of the president of FED J. Powell, expectations fell to just one raise, which is not so sure until the end. Nevertheless, the data will allow to outline the tone in which the last FED meeting will be held, which is scheduled for 19 December.
The most important readings from the USA will also be worth checking: JOLT reading, producer inflation index, index of import and export prices, industrial production and PMI index for industry and services.
On the Old Continent we will get to know the economic mood of ZEW in Germany, industrial production in the euro area and a series of PMI indices for the industry.
The situation on the eurodollar market has not changed much in the last two weeks. The side trend can be entered in building the right arm oRGR. However, it should be remembered that the next two weeks are packed with important macroeconomic readings, policies and meetings of central banks that can completely change the balance of power on the market. In this case, the technique may give erroneous signals.
Assuming that the demand side "presses" and leads to breaking over the last resistance, ie 1,1403-25, it will face the chance to reach the peaks of November 19 and 20, which are at the level of 1.1467-73. (Indirect resistance will be the summit of November 22 at 1.1433). In the case of the implementation of the above scenario, there is a growing chance of achieving the ORGR formation, whose target we can set, at 1.1511-86 or even 1.1621 (the peak of October 16).
On the other hand, the inability to overcome resistance, will contribute to the return to the last minima 1.1309-21, which open the way towards 1.1266-73, (minima of 28 November). Further domination of the supply side will result in drops towards 1.1216, which is located in the support zone of 1,1200-25. In case of overcoming this year's minimum, the supply will strive to reach the level of 1.1176-78 (pits from 25 and 26 June of the current year) or 1.1140 (the minimum from 22 June).
I will not be original if I say that the chances are 50/50 at the moment, but I silently hope that the single currency will strengthen against the dollar and the ORGR formation will take place.
That's what you can now write about the main currency pair. I invite you to the discussion.
When writing about the events of the next week, it is impossible to ignore recent events that are directly related to the thread of the trade war. Market participants will be trying hard to follow the attempt to resolve differences between the two largest economies in the world. (At the moment, both countries give themselves 90 days to reach a consensus). Investors will also pay attention to the side thread concerning the detention in Canada, the Vice President of the Management Board of Huawei Meng Wanzhou.
Another political event that may weigh on the markets will be the Brexit vote in the British parliament that will take place next Tuesday. In the case of Theresa May's failure, the confusion that arises around this topic may weigh heavily on the pound and the euro. At present, it is assumed that the parliament can opt out against the agreement, which may eventually lead to another referendum or the exit of Great Britain from the EU structures without agreement. The consequence of such a solution would be chaos, which would translate into a strong decline in GDP.
The upcoming week is also a series of important readings on both sides of the ocean. In the foreground, we have consumer inflation and retail sales in the US. Solid readings can rekindle the imagination of investors, who will assume that in 2019, FED will decide to raise interest rates again. However, it is worth remembering that after the last words of the president of FED J. Powell, expectations fell to just one raise, which is not so sure until the end. Nevertheless, the data will allow to outline the tone in which the last FED meeting will be held, which is scheduled for 19 December.
The most important readings from the USA will also be worth checking: JOLT reading, producer inflation index, index of import and export prices, industrial production and PMI index for industry and services.
On the Old Continent we will get to know the economic mood of ZEW in Germany, industrial production in the euro area and a series of PMI indices for the industry.
The situation on the eurodollar market has not changed much in the last two weeks. The side trend can be entered in building the right arm oRGR. However, it should be remembered that the next two weeks are packed with important macroeconomic readings, policies and meetings of central banks that can completely change the balance of power on the market. In this case, the technique may give erroneous signals.
Assuming that the demand side "presses" and leads to breaking over the last resistance, ie 1,1403-25, it will face the chance to reach the peaks of November 19 and 20, which are at the level of 1.1467-73. (Indirect resistance will be the summit of November 22 at 1.1433). In the case of the implementation of the above scenario, there is a growing chance of achieving the ORGR formation, whose target we can set, at 1.1511-86 or even 1.1621 (the peak of October 16).
On the other hand, the inability to overcome resistance, will contribute to the return to the last minima 1.1309-21, which open the way towards 1.1266-73, (minima of 28 November). Further domination of the supply side will result in drops towards 1.1216, which is located in the support zone of 1,1200-25. In case of overcoming this year's minimum, the supply will strive to reach the level of 1.1176-78 (pits from 25 and 26 June of the current year) or 1.1140 (the minimum from 22 June).
I will not be original if I say that the chances are 50/50 at the moment, but I silently hope that the single currency will strengthen against the dollar and the ORGR formation will take place.
That's what you can now write about the main currency pair. I invite you to the discussion.