This week will see the Bank of England Policy Meeting which might affect GBPUSD pair and a bunch of economic data releases from the US, Germany & Japan. Besides the BREXIT & trade conflicts, the other vital announcements are the RBA Rate Statement, Bank of England’s policy decision, Canadian Unemployment rate, and ISM non-manufacturing PMI.
November 4, 2019, | AtoZ Markets- The ECB may signal the policy easing along with the Reserve Bank of Australia. However, in the Forex and Crypto Weekly Outlook, the BoE could join later to the easing club. Besides the central bank meetings, the monthly trade balance of China is likely to attract the most attention. Moreover, the employment numbers out of Canada and New Zealand. Meanwhile, the United Kingdom and the United States will also provide services PMIs.
Key Forex and Crypto Weekly Outlook
In this week’s Forex and Crypto Weekly fundamental Outlook, there are several opportunities for traders to gain from the price movement. However, as the first week of November market may see some volatility.
Speech of ECB President with several German releases
It will be a muted week for the Euro except for the speech new ECB President Lagarde. The European Central Bank decided to leave its monetary policy framework untouched for the next few months. However, as the Federal Reserve also hitting the pause button, the euro’s near-term prospects are looking much happier.
The main risk for the euro in the coming days is the possibility of negative trade headlines. The week will start with the manufacturing PMI on Monday, along with the November sentix index. Retail sales will be released on Wednesday, along with the final services PMI.
The main focus for the investors will be towards the German numbers as the worries of recession are surrounding the air of German. The main event of Germany will be the German industrial orders, industrial output, and trade figures.
The Euro price is carrying by the 20 EMA in H4 in the daily chart, which indicates a possibility for further bullish pressure this week. The MACD & RSI is also indicating bullish sentiment. However, the overall trend is bearish, so a daily close above 1.200 is required to increase the possibility of upcoming bullish pressure.
RBA Rate Statement at Forex and Crypto Weekly Outlook
The RBA may keep its cash rate unchanged on Tuesday. Although the November move never really being in play, traders will focus on the clues about a December cut. The recent comments by Governor Philip Lowe, suggests that the Bank is in no hurry to lower the rate again. However, Market expectations for an end-of-year rate cut are increasing with some hints from October meeting minutes.
The quarterly inflation data from the last week showed an on the RBA to ease the monetary policy again. The CPI data has declined from 0.6% to 0.5% and AUD was weak on that news with some volatility. If the RBA seemingly rules out another near-term cut, the Australian dollar stands to extend its recent gains.
Nevertheless, the RBA’s Monetary Policy Statement suggests some clues about the future movement of Australian Dollars. The quarterly outlook report will be released on Friday. There is a possibility of a downward revision to economic forecasts with more cuts in the future.
There is a possibility of short term volatility on the Australian Dollar related currency pairs during the rate statement. However, this event will indicate the long term outlook of the price movement that will help to understand the market context.
New Zealand’s Employment Change q/q
The STATS Nz will release the quarterly employment number on Wednesday. This release will be a crucial piece of the puzzle for the RBNZ. While the RBA is becoming hesitant to ease the monetary policy, it is a different picture In New Zealand. The RBNZ is still more likely to lower rates later this month, although those odds have also been falling. The ANZ Business Outlook Survey of October has shown a mixed bag. The headline business confidence jumped by 12 points. Moreover, the overall business confidence has increased from -53.5 to -42.4.
The unemployment rate may move higher to 4.1% in the third quarter. On the other hand, job growth is expected to decline to 0.2% from 0.8% over the quarter.
If this week’s data shows slack in the labor market, there will be a possibility of the November rate cut. Any weaker employment data may force the NZDUSD price to reject the important 0.6450 resistance. In that case, the primary target will be 0.6350 and 0.6300 onwards.
Bank of England’s policy decision
Besides the BREXIT uncertainties, the main event in Europe will be the Bank of England’s policy decision. On Thursday, it could prove to be the Bank’s most important meeting for some time. There is a rumor that the BoE is close to switching to an easing bias, so the Bank may be forced to cut interest rates. Other things to put a negative impact on the Sterling is that the ongoing political uncertainty & global slowdown.
UK GDP missed the expectation in the second quarter and the latest PMIs indicate growth did not fare better in the third quarter. The PMIs for October are out on Monday for construction and Tuesday for services. The services PMI may remain in contractionary territory for the consecutive month after a decline below 50 in September. The poor start of the fourth-quarter may increase the fear of slowdown and recession. The policymakers may drop their long-held tightening bias and even flag a rate cut.
The BoE will publish its quarterly economic projections on Thursday. The overall downbeat tone could take some of the shine off the pound. Currently, the pound is rallied by 5.3% versus the dollar in October, which is the best month in a decade.
However, the price of GBPUSD is just below the important psychological level 1.300 with some of them tries to touch the level. Price is far above the 20 EMA on the daily chart, which may force to make some correction. Moreover, the MACD and RSI are extremely bullish, pointing to a possible reversal.
Trade Balance and inflation figures of China
China is the biggest export market of New Zealand & Australia. Both economies will face an adverse impact on weaker Chinese data. The domestic data of China will indicate the impact of the trade war with the US.
In the Forex and Crypto Weekly Outlook for China, the CPI is forecasted to increase from 3.0% to 3.2% year-on-year in October. The trade balance will release on Friday and will indicate the business activity with the other country. For trade war, the focus will be towards the USD-Denominated Trade Balance. The previous data of USD-Denominated Trade Balance was 39.7B and the forecast for this week is 40.6B.
The USDCNH price is nearing the important support at 7.000, previously acted as a resistance. If the Chinese data can beat the expectation, the USDCNH price may break the level. Any daily close below 7.000 to 6.9800 may push the price more down towards 6.800. However, this condition will also help the Australian Dollar & New Zealand Dollar to dominate the USD.
Household spending on Japan
The Major Economic Events of Japan will be the household spending that will release on Friday, but the focus will be towards the Bank of Japan’s decision. Investors will watch to decide how long the BOJ will be able to stay on the sidelines.
However, in September, household spending expected to increase by 7.1% on a yearly basis. The previous data was only 1% and the expectation of rising is due to the possible cyclical and global rebound.
Better than expected private consumption has been supporting the Japanese economy. However, the exporters are struggling with Trump’s trade fight with China. Moreover, the wage has been falling and any disappointing earnings growth will hurt the economy. The tax hike from 1 October 2019 might be the reason behind the disappointing consumer spending.
Like other currencies, the Japanese yen dominated the USD last week. The current price pattern suggests that the rejection from 109.00 with a daily close will push the price more down this week. Any weaker than expected US data may boost this momentum where the target would be towards 106.50 & 105.00 onwards.
ISM non-manufacturing PMI for the US
In this week’s Forex and Crypto Weekly Outlook, the US will have a slow week with the only major release being the ISM non-manufacturing PMI. The price is forecasted to rise at 53.2 in October from a plunged three year low data of September at 52.6. Any better than expected PMI data will ease the fear of recession and support the Fed’s decision to put the easing cycle on hold. Other releases are the factory orders on Monday, the trade balance and the JOLTS job openings on Tuesday.
The dollar fell sharply after the FED president indicate that the Fed may be done with cutting rates for now. However, he also mentioned that a hike is not in the picture without a significant move up in inflation.
Besides the ISM data, the greenback will face a possible setback in the US-China trade talks. Political headaches may weigh on the dollar after the House of Representatives began the impeachment inquiry against Donald Trump.
The dollar index became very volatile between 98.00 & 99.50, indicating a possible reversal. To continue the bearish sentiment, a daily closed below 98.00 is required.
Canadian Unemployment rate
The Bank of Canada kept the overnight rate unchanged at its policy meeting this last week. Due to the risk of the trade conflict, the BoC was unexpectedly gloomy about the economic outlook. The loonie got immediate strength against the US counterpart on this event.
The sudden shift has ended the loonie’s month-long rally and closed with a higher push. This means the loonie may react to negative data than positive ones in the coming weeks. The October employment report due on Friday will be the main focus for it. The October data showed a decline from 5.7% to 5.5% and further weakness this week may push a negative impact on CAD.
The Canadian Dollar is consolidating near the 1.300 with some bullish intervention. To remain bearish, the price needs to break the 1.30 level with a daily close. On the other hand, the price may see 1.340 with the support of the positive jobs reports.
Crypto weekly outlook – ETHUSD, BCHUSD, LTCUSD
The majority of the cryptocurrencies are facing bullish pressure due to the Haloween effects, which may continue this week. For bullish sentiment this week, the price need strong intervention by buyers.
Last week, Ethereum started a correction below the support area at $188 and $185. Moreover, ETH/US Dollar also traded below the $182 and $180 support areas. Currently, the $178 resistance area is acting as strong support. Moreover, the price managed to stay above the $178 and the 100 simple moving average oh 4-hour chart.
The next key resistance is near the $190 and any break above the level will surge the price towards the $200 and $205 resistance levels. On the downside, the price may get supports from the bullish trend line forming with support near $182 4-hours.
Any break below the trend line with a daily close could find support near the $180 level. As the main support is near the $178 level, any break below may extend the decline in the coming days.
Bitcoin Cash has moved away from the bearish sentiment of last month. The BCH / USD pair is still under bearish trend over both the short and medium-term. There is a further possibility of downside pressure for the cryptocurrency. However, the stable price above the $240.00 level also leaves the possibility of an upside rebound
The 200 days moving an average of BCH / USD on the four-hour time frame is located at the $242.00 level. The price was stable above the level more a few days, which indicates a further bullish pressure.
If there is any bullish breakout, the BCH / USD pair may rally toward the $290.00 level. Moreover, any sustained break above the $325.00 level would confirm a new bullish trend.
On the other hand, a break under the $260.00 with a daily close would be negative for the BCH / USD. The primary target for bearish momentum would be $200.00 and any break below t
hat level would drag the price more down.
Like other cryptocurrencies, Litecoin has faced the impact of the Haloween effect. After the bullish sentiment of last month, the price showed a correction last week. The Litecoin is consolidating its movement towards $60 zone once again. However, the price failed to break above the level with a daily close. The buyers may face some struggle this week.
The immediate support at $53.00 is the 38.2% Fib retracement level of the last swing high of $59.89 to a swing low at $51.18.
The Relative Strength Index (RSI) is staying near the 50 level to indicate that the bullish pressure is increasing. For the downside pressure, the price may face the support at $50.00 level. On the other hand, $61.00 and $70.00 will be the target for the bullish bias.
What is your opinion on Forex and Crypto Weekly Outlook for this week? Let us know in the comment section below.