Weekly Outlook: 2014 - 2024

USD/JPY forecast for the week of October 27, 2014, Technical Analysis

The USD/JPY pair fell during the course of the week, but found enough support below to turn things back around and form a hammer yet again. This is the second hammer in a row, and as a result it appears of the market will then head to the 110 level. With that, the 110 level will be tested and eventually broken above as we had to the 115 level. The 105 level below should be a bit of a “floor”, as the market should not go below there. If it did, things would change drastically, but at this point in time that looks very unlikely.

USD/CAD forecast for the week of October 27, 2014, Technical Analysis

The USD/CAD pair fell during most of the week, but we found enough support at the 1.12 level to find buyers. That being the case, the market looks as if it’s ready to go higher, and although we formed a shooting star for the previous week, we had two hammers before that so we believe that more than likely the market will grind sideways for the most part in the near term, but ultimately will break out to the upside and head to the 1.14 level. Selling isn’t even a thought.

NZD/USD forecast for the week of October 27, 2014, Technical Analysis

The NZD/USD pair went back and forth during the course of the week, testing the 0.80 level for resistance. It did in fact find it there, and as a result turned back around and formed a negative candle. The negative candle of course suggests that the sellers are starting to get involved again, and that we will ultimately head down to the lows again. The 0.75 level is our next target, and we do recognize that the central bank in New Zealand continues to pressure the Kiwi, making us very bearish.

GBP/USD forecast for the week of October 27, 2014, Technical Analysis

The GBP/USD pair went back and forth during the course of the week, eventually forming a very neutral candle. The neutral candle suggests that the buyers are starting to make a little bit of noise here, and that we could very well see the market go higher. The previous hammer of course was very supportive, so we feel the market should eventually break out to the upside, but we need to clear the 1.62 level on a daily close in order to start buying at this point in time.

EUR/USD forecast for the week of October 27, 2014, Technical Analysis

The EUR/USD pair initially tried to rally during the course of the week, but the 1.28 level offered enough resistance yet again to push the market back down and form a negative candle. That being the case, the market should continue to go much lower, perhaps testing the 1.25 level. That area, if we break through it will have a significant effect on this marketplace as it should push the Euro much lower. We have no interest in buying until we get above the 1.30 handle, as it would show a significant uptick in positive momentum.

Forex - Weekly outlook: October 27 - 31

The euro pushed higher against the dollar on Friday after data showed that German consumer confidence improved, while upbeat U.K. third quarter growth data underpinned investor demand for the pound.

The euro found support after the forward looking Gfk index of German consumer climate ticked up to 8.5 for November from a revised 8.4 in October. The index had fallen sharply in the preceding two months as concerns over geopolitical risks and the ensuing economic slowdown weighed.

EUR/USD was up 0.17% to 1.2668 in late trade, holding below session highs of 1.2695.

Concerns over upcoming European bank stress test results, due for release on Sunday, along with a confirmed Ebola diagnosis in New York City bolstered safe haven demand for the yen and saw the dollar weaken slightly.

USD/JPY was down 0.12% to 108.14 late Friday, after falling as low as 107.77 earlier in the session. At the same time, USD/CHF was down 0.22% to 0.9518.

In the U.K., data on Friday showed that gross domestic product expanded by 0.7% in the third quarter, slowing from 0.9% in the three months to June, but in line with forecasts. Annual GDP was up 3%, also in line with forecasts.

The data underpinned expectations that the continuing economic recovery could prompt the Bank of England to hike interest rates in the second half of next year.

GBP/USD was at 1.6083 in late trade, 0.33% higher for the day.

The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.19% to 85.79 late Friday. The index still ended the week higher, stabilizing following a steep selloff in the previous week.

Fears that a slowdown in global economic growth could act as a drag on the U.S. economic recovery have prompted investors to push back expectations for an increase in interest rates by the Federal Reserve to the second half of 2015.

In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up its asset purchase program.

Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.

Friday’s report on euro zone consumer inflation will also be in focus, amid growing expectations that the European Central Bank will have to take additional easing steps to boost the flagging euro area economy.

Monday, October 27

• The Ifo Institute is to release its report on German business climate. The euro zone is to release data on M3 money supply and private loans.
• The U.K. is to release private sector data on retail sales.
• The U.S. is to publish an industry report on pending home sales.

Tuesday, October 28

• Japan is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.

Wednesday, October 29

• Japan is to publish preliminary data on industrial production.
• New Zealand is to release private sector data on business confidence.
• The U.K. is to report on net lending to individuals.
• Canada is to produce data on raw material price inflation.
• The Federal Reserve is to announce its federal funds rate and publish its rate statement.
• Later Wednesday, the Reserve Bank of New Zealand is to announce its official cash rate and publish its rate statement.

Thursday, October 30

• Australia is to release a report on import prices.
• The U.K. is to publish private sector data on house price inflation.
• In the euro zone, Germany is to produce preliminary data on the consumer price index, which accounts for the majority of overall inflation. The country is also to release a report on the change in the number of people unemployed.
• Elsewhere in the euro area, Spain is to release preliminary data on consumer inflation and third quarter GDP.
• Switzerland is to publish its KOF economic barometer.
• The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.

Friday, October 31

• New Zealand is to release data on building consents.
• Japan is to release reports on household spending and the consumer price index. Meanwhile, the Bank of Japan is to announce its monetary policy decision and publish its rate statement. The bank is also to hold a post-policy meeting press conference.
• The euro zone is to release what will be closely watched preliminary data on consumer inflation, as well as a report on the unemployment rate. In addition, Germany is to report on retail sales, while France is to publish data on consumer spending.
• Canada is to publish its monthly report on GDP growth.
• The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.

USD/JPY weekly outlook: October 27 - 31

The dollar ended slightly lower against the traditional safe haven yen on Friday as concerns over a confirmed Ebola diagnosis in New York City spurred increased demand for the Japanese currency.

USD/JPY was down 0.12% to 108.14 late Friday, after falling as low as 107.77 earlier in the session.

The dollar slid against the yen after a doctor in New York tested positive for the Ebola virus after returning from Guinea. The news fuelled concerns that a widespread outbreak of the virus could derail global economic growth.

The dollar later pulled away from session lows after data showed that U.S. new home sales rose 0.2% from a month earlier to hit a six year high of 467,000 in September.

The pair still ended the week with gains as the diverging monetary policy stance between the Federal Reserve and Japan’s central bank continued to underpin dollar demand.

The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.19% to 85.79 late Friday. The index still ended the week higher, stabilizing following a steep selloff in the previous week.

Fears that a slowdown in global economic growth could act as a drag on the U.S. economic recovery have prompted investors to push back expectations for an increase in interest rates by the Federal Reserve to the second half of 2015.

The Bank of Japan looks likely to stick to a looser monetary policy stance amid signs that the economic recovery in the world’s third-largest economy is faltering.

Japan’s government downgraded its assessment of the economic outlook for the second consecutive month last week, and a report earlier in the month showed that sentiment in the services sector deteriorated in the third quarter after a sales tax hike in April hit consumption.

Elsewhere, the euro was almost unchanged against the yen on Friday, with EUR/JPY trading at 137.01.

The single currency found support after the forward looking Gfk index of German consumer climate ticked up to 8.5 for November from a revised 8.4 in October.

The index had fallen sharply in the preceding two months as concerns over geopolitical risks and the ensuing economic slowdown weighed.

In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up its asset purchase program. Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.

Data from Japan on retail sales, inflation and industrial production will also be closely watched, while Friday’s monetary policy announcement by the BoJ will also be in focus.

Monday, October 27

• The U.S. is to publish private sector data on pending home sales.

Tuesday, October 28

• Japan is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.

Wednesday, October 29

• Japan is to publish preliminary data on industrial production.
• The Federal Reserve is to announce its federal funds rate and publish its rate statement.

Thursday, October 30

• The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.

Friday, October 31

• Japan is to release reports on household spending and the consumer price index. Meanwhile, the BoJ is to announce its monetary policy decision and publish its rate statement. The bank is also to hold a post-policy meeting press conference.
• The U.S. is to round up the week with data on personal income and expenditure, as well as revised data on consumer sentiment and a report on business activity in the Chicago region.

AUD/USD weekly outlook: October 27 - 31

The Australian dollar edged higher against its U.S. counterpart on Friday, after data showed that U.S. new home sales rose less-than-expected last month.

AUD/USD settled at 0.8792 by close of trade on Friday, up 0.36% for the day and 0.54% higher for the week.

The pair is likely to find support at 0.8718, the low from October 24, and resistance at 0.8831, the high from October 21.

The dollar came under pressure after official data showed that U.S. new home sales rose 0.2% last month to 467,000 units, below expectations for an increase to 470,000 units.

August's figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.

Despite Friday's disappointing housing data, investors remained confident in the U.S. economic recovery, fuelling speculation that the Federal Reserve could hike interest rates sooner than expected.

Elsewhere, in Australia, a government report on Wednesday showed that consumer price inflation rose 0.5% in the third quarter, more than the expected 0.4% increase.

Year-on-year, Australia's CPI rose 2.3% in the last quarter, in line with expectations, after an increase of 3.0% in the second quarter.

Data from the Commodities Futures Trading Commission released Friday showed that speculators added to their bearish bets on the Australian dollar in the week ending October 21.

Net shorts totaled 31,509 contracts, compared to net shorts of 30,271 in the preceding week.

In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up asset purchases under its third round of quantitative easing.

Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.

Monday, October 27

• The U.S. is to publish an industry report on pending home sales.

Tuesday, October 28

• The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.

Wednesday, October 29

• The Federal Reserve is to announce its federal funds rate and publish its rate statement.

Thursday, October 30

• Australia is to release a report on import prices.
• The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.

Friday, October 31

• The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.

NZD/USD weekly outlook: October 27 - 31

The New Zealand dollar bounced off a two-week low against its U.S. counterpart on Friday, as disappointing U.S. housing data dampened demand for the greenback.

NZD/USD hit a daily low of 0.7801 on Friday, the weakest level since October 8, before subsequently consolidating at 0.7855 by close of trade on Friday, up 0.42% for the day but still 0.78% lower for the week.

The pair is likely to find support at 0.7782, the low from October 8, and resistance at 0.7928, the high from October 23.

The dollar came under pressure after official data showed that U.S. new home sales rose 0.2% last month to 467,000 units, below expectations for an increase to 470,000 units.

August's figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.

Despite Friday's disappointing housing data, investors remained confident in the U.S. economic recovery, fuelling speculation that the Federal Reserve could hike interest rates sooner than expected.

The kiwi slumped to a two-week low earlier in the session after official data on Thursday showed that consumer price inflation in New Zealand rose 0.3% in the third quarter, below expectations for an increase of 0.5%.

The data fuelled speculation that the Reserve Bank of New Zealand could delay any potential rate hikes.

Data from the Commodities Futures Trading Commission released Friday showed that speculators scaled back their bearish bets on the New Zealand dollar in the week ending October 21.

Net shorts totaled 2,332 contracts, compared to net shorts of 2,384 in the preceding week.

In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up asset purchases under its third round of quantitative easing.

Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.

A policy decision by the Reserve Bank of New Zealand will also be in focus.

Monday, October 27

• The U.S. is to publish an industry report on pending home sales.

Tuesday, October 28

• The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.

Wednesday, October 29

• New Zealand is to release private sector data on business confidence.
• The Federal Reserve is to announce its federal funds rate and publish its rate statemen
• Later Wednesday, the Reserve Bank of New Zealand is to announce its official cash rate and publish its rate statement.

Thursday, October 30

• The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.

Friday, October 31

• New Zealand is to release data on building consents.
• The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.

GBP/USD weekly outlook: October 27 - 31

The pound was higher against the dollar on Friday as upbeat data on third quarter U.K. growth reinforced expectations that the ongoing recovery could prompt the Bank of England to raise interest rates early next year.

GBP/USD was up 0.33% to 1.6083 in late trade, to end the week little changed.

Sterling was boosted after the Office of National Statistics reported that gross domestic product expanded by 0.7% in the third quarter, slowing from 0.9% in the three months to June, but in line with forecasts.

On a year-over-year basis, GDP grew 3%, in line with forecasts, down from annual growth of 3.2% in the second quarter.

The dominant service sector continued to be the biggest contributor to growth, followed by production, which includes manufacturing. Construction growth also picked up in the third quarter the ONS said.

The data fuelled expectations that the broad based economic recovery in the U.K. could prompt the BoE to hike interest rates in the early part of 2015.

Sterling was also higher against the euro, with EUR/GBP down 0.16% to 0.7875 in late trade.

The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.19% to 85.79 late Friday. The index still ended the week higher, stabilizing following a steep selloff in the previous week.

Fears that a slowdown in global economic growth could act as a drag on the U.S. economic recovery have prompted investors to push back expectations for an increase in interest rates by the Federal Reserve to the second half of 2015.

In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up its asset purchase program.

Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.

Monday, October 27

• The U.K. is to release private sector data on retail sales.
• The U.S. is to publish an industry report on pending home sales.

Tuesday, October 28

• The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.

Wednesday, October 29

• The U.K. is to report on net lending to individuals.
• The Federal Reserve is to announce its federal funds rate and publish its rate statement.

Thursday, October 30

• The U.K. is to publish private sector data on house price inflation.
• The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.

Friday, October 31

• The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.