Weekly Market Commentary | 21.10 - 27.10

Monday

• No Tier 1 data on the calendar.

• China cut benchmark lending rates by 25 basis points. This was larger than expected.

• The rate cut could impact commodities and Asian equities. Traders will assess how this stimulus might affect global demand.

Tuesday

• Key speeches from central bankers: Bank of England's Andrew Bailey and ECB President Christine Lagarde.

• Markets will look for clues on future interest rate moves.

• British Pound and Euro could see volatility if hints about policy changes are made.

Wednesday

• Bank of Canada’s interest rate decision: a 50 basis point cut is expected. This would lower the rate to 3.75%.

• The rate cut may weaken the Canadian dollar.

• More central banker speeches: ECB’s Lagarde, RBNZ’s Orr, and BOE’s Bailey will speak again.

Thursday

• Major PMI data releases from France, Germany, Eurozone, UK, and US.

• Manufacturing PMIs are expected below 50 (signaling contraction).

• Services PMIs are expected above 50 (showing resilience).

• Any surprises could lead to market volatility, especially for European equities and the Euro.

Friday

• Tokyo Core CPI from Japan expected at 1.7%.

• German Ifo Business Climate expected at 85.6.

• Key North American data: Canadian retail sales and US durable goods orders. Both expected to decline.

• These releases will influence the Canadian dollar and US equities.

Setups for This Week:

USD/JPY

Primary View

• The price escaped from the rising wedge, marked with blue lines, to the downside.

• This breakout gives a clear signal to sell.

• The target for the sell-off is the orange horizontal support level.

Alternative View

• If the price comes back inside the wedge, that will reverse the outlook and be a signal to buy.

GBP/USD

Primary View

• The price experienced a false bearish breakout below the green horizontal support, marked with an orange rectangle.

• Now, the price is back above the support, which is a positive signal.

• A break above the black downtrend line will confirm a buy signal.

Alternative View

• If the price breaks below the green support again, it will turn into a sell signal.

EUR/CHF

Primary View

• The price is moving sideways within a pennant formation, or symmetric triangle pattern, marked with blue and black lines.

• A breakout above the upper blue and black lines will provide a strong buy signal.

Alternative View

• If the price breaks below the lower blue line, that will generate a signal to sell.