Weekly Outlook: 2015, October 25 - November 01

US Dollar Forecast – US Dollar’s Bid for 12-Year High Will Hinge on Fed’s Decision
The Dollar posted its best week performance in five months with this past Friday’s close.

British Pound Forecast – GBP/USD Searches for Support as Rebound Unravels- GDP, FED in Focus
GBP/USD stands at risk of facing increased volatility in the week ahead as market attention turns to the Federal Reserve’s October 28 interest rate decision, while the U.S. & U.K. are scheduled to release their Gross Domestic Product (GDP) reports for the third-quarter of 2016

Japanese Yen Forecast – Volatility Near-Guaranteed on Critical Week for the USD/JPY
The Japanese Yen fell for six consecutive trading days and finished the week at multi-month lows versus the resurgent US Dollar, and a big week ahead promises big moves for the USD/JPY and other Yen pairs.

Australian Dollar Forecast – Australian Dollar Volatility to Return on RBA, Fed Policy Speculation
Australian Dollar volatility is set to return after two weeks of lackluster momentum amid heavy speculation about the direction of RBA and Federal Reserve monetary policy.

New Zealand Dollar Forecast – Drooping Milk Prices Drive NZD/USD Lower Ahead of RBNZ
It was one of those good news/bad news weeks for the New Zealand economy.

Gold Forecast – Gold Sinks as USD Soars- FOMC to Setup Bigger Picture Advance?
Gold prices are weaker this week with the precious metal down 1.3% to trade at 1161 ahead of the New York close on Friday- its largest weekly decline since August.

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Levels and targets for EURUSD by Societe Generale

Societe Generale made a weekly technical forecast concerning the EUR/USD:

• "Considering a largely negative close this week, EUR/USD will form an evening star, a candlestick pattern that signals possibility of down move. It is noteworthy that this evening star coupled with a shooting star back in August gives bearish connotations."
• "As such, SocGen thinks that the current break below 1.1085 means a retest of multi decadal channel support at 1.05/1.04 with intermittent targets at 1.0940 and May lows of 1.08."
• "This massive channel remains the decisive level for next leg of downtrend as a move below 1.05/1.04 will confirm that the ongoing correction is not just a retracement of the up move since 2000 but in fact of the whole up cycle since the 1980s."

the source

EUR/USD totally collapsed after Draghi hit it hard. Will it be able to stage a recovery or does it have lots more to fall from here? An important German survey and inflation numbers stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Expectations were high for the ECB meeting and Draghi easily leaped over them, over-delivering on thick hints: from expanding and extending QE through opening the door for a rate cut and also some skills, such as the use of the word “vigilant”. This resulted in a crash worth over 300 pips that lasted well over a day and pierced through uptrend support. The dollar also enjoyed some back wind from better home sales and jobless claims. Good euro-zone PMIs only temporarily helped the euro.

1. Bundesbank Monthly Report: Monday, delayed from last week. The German central bank publishes a monthly report about the state of the economy, employment and inflation. The most interesting part would be an assessment of the VW scandal to the German economy. The car maker is not only a symbol of German industry but also a huge employer in Germany. Also other companies are impacted by the supply chain.
2. German Ifo Business Climate: Monday, 9:00. Germany’s No. 1 Think Tank is expected to show a small decline in business confidence, from 108.5 points in September to 108.1 now. The wide survey will also incorporate the Chinese slowdown in addition to the Volkswagen crisis. The ZEW figure already missed expectations.
3. ECB Monetary Data: Tuesday, 9:00. The ECB’s monetary stimulus did succeed in pushing the money in circulation, M3 Money Supply, to higher levels, with an annual expansion of 4.8% in August. A rise to 5% is on the cards now. Private loans are growing at a rate of 1% as of August and September is expected to see an acceleration to 1.1%.
4. German Import Prices: Wednesday, 7:00. Import prices are falling sharply, and this feeds into inflation figures. A big drop of 1.5% was seen in August and a more moderate slide of 0.2% is on the cards now.
5. German GfK Consumer Climate: Wednesday, 7:00. This survey of 2000 consumers has topped out a few months ago above the 10 level. From 9.6 points in September, a level of 9.5 is predicted now.
6. German CPI: Thursday, the various German states throughout the European morning and the final number at 13:00. The early number for October is predicted to show a slide of 0.1% in prices, following a bigger than expected dip of 0.2% in September m/m. Even Germany, that is enjoying solid growth, is experiencing falls in prices.
7. Spanish CPI: Thursday, 8:00. The euro-zone’s fourth largest economy has enjoyed strong growth but this came on top of deflation. After a big year over year drop of 0.9% in September, an annual level of -0.6% is on the cards, well below the recent euro-zone levels.
8. German Unemployment Change: Thursday, 8:55. The zone’s locomotive has seen a small rise of 2K in the number of unemployed. A drop of 4K is on the cards. Despite the disappointing rise last time, Germany is enjoying a low unemployment rate.
9. German Retail Sales: Friday, 7:00. Consumers were less busy in August: a drop of 0.4% was recorded in the volume of sales. A bounce back of +0.4% is on the cards now. With exports to China slumping, internal demand is key to the economy.
10. French Consumer Spending: Friday, 7:45. The French version of retail sales has been flat in August. A recovery is expected now with +0.2%.
11. Spanish Flash GDP: Friday, 8:00. Spain’s growth has been a success story. The early release of this figure (in comparison with other EZ countries) makes it more significant. After growing 1% in Q2, the zone’s fourth largest economy is expected to report a similar growth rate of 0.9% q/q.
12. Inflation data: Friday, 10:00. The euro-zone slipped back to deflation in September, with -0.1% and this was a key reason for Draghi’s strong words. A return to a flat 0% is on the cards now. Core inflation is doing better with +0.9% and the same figure is expected here. Note the ECB’s inflation target is “2% or a bit below”.
13. Unemployment rate: Friday, 10:00. At 11%, the unemployment in the euro-zone is not encouraging. While it did slip from higher levels, it isn’t going down fast enough. No change is expected.

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