Weekly Wrap: Mind the Gap!
Traders will be keeping an eye on the dollar this week with an Interest Rate Statement due out on the 29th. USDJPY could see some volatility this week with interest rate news on both sides of this currency pair.
Risk on tap for this week
Mind The Gap!
The open could be interesting and may set the tone for the week with all eyes on the European bank stress test results which have come out today. We may see some opening gaps across some of the markets.
- Durable Goods Orders – a leading indicator for production. Tues Oct 28
- Consumer confidence Tues Oct 28
- FOMC Statement Weds Oct 29
- Advance GDP Thurs Oct 30
- Unemployment Claims Thurs Oct 30
- Fed Yellen Speaks Thurs Oct 30
- PPI – leading indicator of consumer inflation Fri Oct 31
- BOJ Policy Statement Fri Oct 31
- German Ifo Business Climate Index Mon Oct 28
- German Preliminary Consumer Price Index Thurs Oct 30
- Eurostat Flash CPI Estimate Fri Oct 31
Buyers stepped in at around the 105.50 level which was at the half way price between the lows from May and the highs at the start of September.
The high last week was at 108.35, close to the 61.8 and the completion of an ABCD pattern (a measured move in price where the second move in price is equal to the first move in price).
This might be an interesting area for the shorts to participate. Any break of this level, the highs are likely to be retested.
This pair has consolidated for the week at the yearly lows and seems to be caught between an area of demand and supply. Last week’s price movement was within the range of the previous week.
Cable (the term traders use to describe this currency pair) found some interest at 1.5990 which was also near the 61.8 retracement. If price can hold above the sentiment wall from the highs on the 19th of September and the potential new channel forming, a retest of the October highs is within reason.
Last week, EURUSD retested the highs from the previous Friday, with sellers stepping in pushing this pair down to the previous weeks low. It picked up a few orders just under the lows and has consolidated there going into the close last week. For now, 1.26 seems to be the line in the sand for the bulls, a break of this could see the yearly lows retested with the next stop the 2012 lows at 1.2040.
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