From US GDP, UK GDP, Japan and Eurozone inflation report, there are endless source of volatility this week. There are at least 3 events that might be overlooked in favor of other, more significant outlook.
Poundsterling continue to slow down against US Dollar since July. It even stays low although yesterday's retail sales show better-than-expected figures. The main cause is uncertainty surrounding Bank of England interest rate hike. But behind it, market players has many more concerns.
Gold is sideway. Intraday bias is neutral. Today, watch the resistance area at 1196.70 and support at 1186.70. Gold price may rise up to 1204.25 if the price managed to break above 1196.70.
At the beginning of this week, Japan preliminary GDP report once again disappoints. The second lower than zero growth means that Japan has entered triple-dip recession. Then yesterday, PM Abe announced tax hike and upcoming snap election. What it means for forex market?
One of the most talked topic today is the likelihood of Japanese Prime Minister Shinzo Abe to dissolve Diet lower house and hold snap election before the end of the year.
Although US Dollar has mellowed after a disappointing October NFP, it generally is still on a bullish bias on major pairs. However, currently there are a number of reasons that might lead US Dollar down for the next few weeks.
Euro skydived to its lowest in more than two years following Draghi press conference yesterday (6/11). In the last one year, the 18-countries currency has fallen almost 15% against US Dollar, and all signs point toward more depreciation.
At the latest FOMC meeting this week, the Fed FOMC ended the legendary quantitative easing (QE) by discontinuing the last 15billion USD of the monthly bond purchases. The meeting's hawk nuances have sent US Dollar skyrocketed in major pairs, whilst elsewhere, future projections are not as bright.
GBP/USD remains under pressure. Bearish signals are confirmed on hourly stochastic and CCI, increases expectation that sterling will move lower towards support area at 1.5994. However, you'd better prepare for possible pull-back move.
Apart from the fact that current data figures are relatively insignificant, doubts on decision makers that has failed to repair the broken links on the economy also hurts market confidence.
