Weekly Technical Analysis For October 30th to November 3rd, 2017
EUR/USD: The ECB kept interest rates unchanged at 0% last Thursday. They extended QE program by 9 months and cut QE to €30BN from January until September 2018. After the ECB Press Conference, US dollar extended gains versus the Euro. Also, US data released over the past week; the GDP (Q3) growth, Jobless claims, Durable goods, New-home sales, all of them were better than expected. Additionally, the Republican Party made important progress on tax reform with the House passing the budget.
The week ahead brings us October’s Employment Numbers and The FOMC Monetary Policy Meeting. No change is expected in monetary policy. Also, there is no press conference associated with this FOMC meeting but we should focus on the Fed outlook for rates. Recent economic data support for rate hikes once more this year.
Investors will focus to next week’s U.S. Non-Farm Payrolls. Jobs report expected to 315k jobs created in October after falling -33K the previous month. Unemployment Rate is expected to remain flat at 4.2% compared to a month ago. Average hourly earnings will be another release to be followed closely at the same time and are expected to ease 0.2% from 0.5% a previous month. An upbeat employment report will point to an improving economy and support the case for higher interest rates in December.
The EUR/USD pair dropped significantly last week. The price closed just above the main level of 1.1607. If the price remains above that level on a daily basis, the downward movement may be limited. At this point, we will face resistance levels at 1.1660 and 1.1720. On the other hand, if the price breaks down the 1.1607, next support levels will be at 1.1570 and 1.1531
Support: 1.1607 – 1.1570 - 1.1531
Resistance: 1.1660 - 1.1720 – 1.1812
GBP/USD: The Bank of England will announce its rate decision this week. The market expects the BoE hikes interest rates by 25 basis points and doubles the benchmark UK Bank Rate to 0.5%. Note though that no change is expected in either the bank’s £435 billion government bond-buying or its £10 billion corporate bond purchases. We will also receive the BoE’s quarterly Inflation Report in the upcoming week.
The GBP/USD pair closed last week below the 1.3152 key resistance level. As long as the price stays below that level on four hourly bases, the dollar may gain more value against the sterling, At this point, we will watch again support levels at 1.3103 and 1.3050. Although, if the price rises above 1.3152, the resistance levels will be at 1.3199 and 1.3241
Support: 1.3103 – 1.3050 – 1.3007
Resistance: 1.3152 – 1.3199 – 1.3241
USD/JPY: The BoJ Monetary Policy Decision be announced on this Tuesday. No change is expected in monetary policy. The Dovish BoJ outlook is most likely dominate in the market. we should focus on the BoJ inflation forecasts. If the BoJ continues to cut inflation forecasts. It would provide another push of weakness into the Yen.
The USD/JPY pair dropped to the 113.63 key support level last Friday. If the price able to break below 113.63 and stay below that level on a four-hourly basis, the pullback may continue. In this case, next support levels will be at 113.63 and 112.94. On the other hand, if the price rises above 113.63, we will watch resistance level at 114.11 and 114.63.
Support: 113.63 – 112.94 – 112.46
Resistance : 114.11 – 114.63 – 115.61
GOLD: The Gold price closed last week just above the 1272 key support level. In the event that the price shows an upward movement above 1272, we will follow the daily resistance level at 1276. However, as long as the price remains below 1276, on a daily basis. the price remains below 1272, the bearish action is most likely dominate. On the other hand, if the price drops below 1272, we will face 1266 and 1256 as support levels.
Support: 1272 - 1266 - 1256
Resistance: 1276 – 1283 - 1291