Weekly Market Commentary | 6.11 – 12.11
06 November 2023
Curious to know what’s happening on the markets this week? Take a quick tour of the latest news, economic updates, and trading setups that will keep you up-to-date and in the know!
Monday:
- The week eases into gear with the UK's Construction PMI on the docket. Analysts are bracing for a figure of 46.1, which could impact the GBP currency pairs.
- Canada's Ivey PMI is anticipated later in the day, with projections standing at 54, a marker of potential resilience in Canadian business conditions.
Tuesday:
- Attention shifts to the Reserve Bank of Australia as they deliberate on interest rates. A speculated hike of 25 basis points to 4.35% could stir the AUD markets.
- Tuesday promises to be lean on data otherwise, granting traders a breath before mid-week developments.
Wednesday:
- New Zealand's inflation expectations may set the tone for NZD trading.
- A double-header of central bank eloquence as Bank of England’s Governor Bailey and Fed Chairman Jerome Powell deliver speeches that could provide insights into future monetary policy.
Thursday:
- An early start with China's inflation figures, where a -0.2% annual change is on the forecast, may affect commodity and currency markets.
- The U.S. continues its weekly rhythm with unemployment claims expected at 218,000, a metric for domestic economic health.
- Central bank commentary continues with ECB President Lagarde and a second appearance from Jerome Powell, which could add volatility to the EUR and USD.
Friday:
- The UK's GDP reading is projected to show no growth, which could be a concern for economic vigor in the region.
- The U.S. wraps up the week with the Prelim University of Michigan Consumer Sentiment, a leading indicator of consumer spending, anticipated at 63.4.
Setups for This Week:
EURUSD:
Primary View:
- The EURUSD pair has broken out of a pennant formation, as indicated by the breach of the upper red line.
- This bullish escape is compounded by the rise above the descending channel delineated by black lines, reinforcing the buy signal.
- Current sentiment for EURUSD is positive, suggesting an uptrend continuation.
Alternative View:
- A reversal back below the upper red line of the pennant would negate the bullish outlook and serve as an indication to sell.
NASDAQ:
Primary View:
- The NASDAQ index experienced a false bearish breakout from a wedge pattern, only to reverse into the formation again, which typically suggests a strong buy opportunity.
- At present, the index is challenging the upper boundary of the wedge, and a conclusive breakout here could offer a robust buy signal.
Alternative View:
- Should the price meet resistance at the wedge's upper line and retreat, it could provide a cue for investors to consider short positions.
AUDJPY:
Primary View:
- AUDJPY has had a breakout week, exiting a prolonged consolidation within a blue rectangle (sideways trend) and red lines (symmetric triangle).
- The currency pair has also surmounted a dynamic resistance depicted by a blue line and a static horizontal barrier at the green line, solidifying the buy signal for a longer-term bullish outlook.
Alternative View:
- A downturn that sees the pair slipping back below the key green line would invalidate the bullish scenario and potentially trigger a short-selling signal.
