What Happened Last Week
The USD Index fell to its lowest since late September on Friday as traders grew optimistic about the strength of the euro zone’s recovery and lost appetite for the USD.
The Euro hit its highest since Sept. 25 against the dollar, up 0.65% on the day and more than 1% for the week. It was the single currency’s third straight week of gains, its best run since July, and second straight 1% weekly gain.
Against the Yen, the Euro rose more than 1% to 133.23, its highest since Nov. 16.
We had good data last week from Europe, the German political scene stabilised and dovish comments from Janet Yellen and the FOMC Minutes.
On Thanksgiving Thursday, while markets in the U.S. were closed, Euro zone business growth surveys showed surprise growth, supporting the European Central Bank (ECB) move last month to announce a throttling back of its monetary stimulus.
The currency bloc’s latest Purchasing Managers’ Index (PMI) readings suggest the upturn still has momentum.
The dollar index fell to its lowest since Sept. 26 at 92.67, having suffered its worst single-day decline in more than five months on Wednesday after minutes from the Federal Reserve’s latest meeting showed some policymakers were concerned about stubbornly weak U.S. inflation.
For the week, the dollar index fell nearly 1%, its worst weekly loss since September.
Analysts also pointed to developments in Germany, where the Social Democrats appear close to renewing their coalition co-operation with Chancellor Angela Merkel, as providing support to the euro.
Minutes from the ECB’s latest policy meeting, released on Thursday, showed policymakers had broadly agreed on extending their quantitative easing scheme, albeit at a lower level, but keeping asset purchases open-ended appeared to generate fiercer debate.
Sterling rose to its highest against the dollar since Oct. 2 as markets interpreted the latest comments from top European Union policymakers as mildly positive for Brexit negotiations.
The pound pared gains after reports of a shooting on London’s Oxford Street but remained higher on the day at $1.3330. Police later said they had found no evidence of gunfire or casualties in Oxford Street.This Weeks Key Fundamental Drivers
We’ve got a load of solid fundamental drivers this week starting with the European session on Wednesday.
The Best Trade Days: Wednesday, Thursday & Friday
Major Currencies to focus on: EURUSD & USDJPY
There’s no point getting involved at all, so please don’t waste your time in front of the screens waiting for something to happen!
Tune up your charts and then take your dog for a walk, play golf, go fishing, do some gardening, go for a surf etc…..
The Asian session will be a waste of time.
We may see some activity later in the day with a couple of releases, but it’s pretty light on.
Key data to focus on:
GBP – Bank Stress Results
CAD – BoC Governor Poloz speech
Another snoozer for the Asian session.
But the European & North American Sessions will be very lively with the first major US data for the week.
Key data to focus on:
EUR – Consumer & Industrial confidence, Economic sentiment
USD – GDP & PCE Prices
Finally traders in Asia have something to cheer about as we have the first major Aussie release for over a week.
But the European & North American sessions are where the major action will be.
Key data to focus on:
AUD – Private Capital Expenditure
EUR – CPI & Unemployment rate
USD – PCE Price Index, Initial Jobless Claims
I’m expecting another fizzer in Asia despite a load of Japanese data on the calendar. We really need big variance for the Japanese data to impact.
The European & North American sessions have plenty on offer with the major focus USDCAD.
Key data to focus on:
EUR – Manufacturing PMI
GBP – Manufacturing PMI
CAD – GDP, Employment Change & Unemployment rate
USD – ISM Prices Paid & Manufacturing
Technical Set Up – What’s Happening with the Majors
The USD starts the week on the back foot against most pairs with EURUSD having the most defined move.
The Aussie really lacks any significant momentum at the moment. We need variant US, Chinese or Aussie data to get it moving wikth clear direction.
The NZD short squeeze only managed to touch 0.6900 before stalling. No significant NZ data this week so I’ll be watching the Chinese & US data this week.
The Yen lost all momentum at the end of last week. I’m still leaning towards the downside although US data this week should provide a clearer picture.
Starts the week on a positive note. It should trade sideways until Wednesday with 1.1975 resistance the next major level on the topside.
Positive Brexit sentiment has Sterling rallying above 1.3300. There’s not a lot of UK data this week so keep an eye on political news and US data for direction.
The Swissie has slowly drifted down 100 points over the past week. It’s now lost all momentum and we need fresh US data to get it moving again.
The Funds have been pulled from all directions as numerous events impact. Keep an eye on Poloz’s speech on Tuesday with the major focus Friday’s data releases.
Join us for the 1st of a 5 part Series on: How the Bankers trade forex
Part 1: How the bankers prepare, mind set, daily routine, focus & all the little components that make them tick.
Believe me, Hollywood has a lot to answer for!
Don’t get me wrong, the traders have a hell of a lot of fun but when the market is ‘on’ they are at full speed forward!
On this Wednesday Nov 29th US EST. (check the T4T Calendar for local times)
We start the week with the USD on the back foot but we may not see much activity until we hit Wednesday, so its important you remain patient.
The best opportunities should be on weak US data as it runs with current momentum.
The EURUSD and USDYEN shoulds be the major focus throughout the week with loads of Euro and US data scheduled.
Friday belongs to USDCAD with a trio of major releases.
Don’t forget the “Week ahead” is to give you some guidance into your preparation for the week.
Make sure you don’t waste unnecessary time in front of the screens.
Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.
The key to your sucess: Isolate the days or sessions that work for you and focus in on them. Don’t worry about things that you can’t make.
So tune up your charts & get ready to trade.