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Sunday, 26 October 2014

Week 44 trading stubs, GBP and CAD bull rotation for the coming week

Recap

After rather muted last week that proved to be very difficult to trade the coming one has much more clarity on the way. CAD and GBP turned the corner and are likely be major part of bullish rotation for the coming week, while EUR is likely to weaken. ECB stress test results may create lots of gaps over the weekend on EUR pairs. Another prime risk event is FOMC meeting on Wednesday, that should give more direction to USD for the coming weeks. RBNZ will have its rates announcement same day with expectations of NZD rates unchanged at 3.5%.

Weekly Currency Board


AUD
Neutral
No Positions
USD
Neutral
No positions
EUR
Bearish
Shorts EUR/CAD, EUR/GBP
NZD
Bearish
Long GBP/NZD
GBP
Bullish
Longs GBP/CHF, GBP/JPY, GBP/NZD; Shorts EUR/GBP
CHF
Bearish
Longs CAD/CHF, GBP/CHF
JPY
Bearish
Longs CAD/JPY, GBP/JPY
CAD
Bullish
Longs CAD/CHF, CAD/JPY; Shorts EUR/CAD, NZD/CAD



Prime Risk Events (UTC time)  

Sunday 26 October

European bank stress test results publishedMarket to watch: European banking stocks EStoxx 50

Monday 27 October

German IFO (October), 10am: The business climate reading is expected to rise fractionally, to 104.8 from 104.7 last month. Market to watch: DAX   EUR/USD    EUR/GBP

US services PMI (October, preliminary), 2.45pm, pending home sales (October), 3pm: The PMI reading is expected to drop slightly, to 58.7 from last month’s 58.9, while pending home sales are expected to show growth of 1.1% MoM. Market to watch: US indices, dollar crosses

Tuesday
28 October

US durable goods orders (September), 1.30pm: A gain of 0.4% is forecast for this number, with the core number (excluding transportation) rising 0.5%. Market to watch: US indices, dollar crosses

US consumer confidence (October), 3pm: Consumer confidence is expected to reach 87.4 this month, from September’s 86. Market to watch: US indices, dollar crosses

Wednesday
29 October

Japanese industrial production (September), 12.50am: After a 1.9% drop last month the data is expected to show a rise of 2.3%. Market to watch: Nikkei 225   USD/JPY

Federal Open Market Committee meeting (October), 7pm: A dovish set of minutes from the last meeting provided some reassurance, but since then the turmoil has seen a number of members speak publicly. QE is still expected to end this month, but the Fed will likely look to make comment on how it views the global economic outlook. The statement on when interest rate increases are likely to begin will be closely watched. Market to watch: all major indices & FX pairs

Thursday
30 October

German unemployment (October), 9.55am: An increase of 5,000 in the month is expected, with the unemployment rate steady at 6.7%. Market to watch: DAX  EUR/USD  EUR/GBP

US GDP (Q3, first reading), jobless claims, 1.30pm: A 2.9% figure is forecast, from the 4.6% of Q2. However this is the first reading and will almost certainly be revised. Market to watch: US indices, dollar crosses

German CPI (October, preliminary), 2pm: Data is expected to show YoY growth of 0.9% and a MoM fall of 0.1%. Market to watch:  DAX   EUR/USD   EUR/GBP

Friday
31 October

Bank of Japan monetary policy statement (October), 12.30am: Any signs that the BoJ is becoming more dovish could see further gains for USD/JPY and the Nikkei 225. Market to watch: Nikkei 225   USD/JPY

Eurozone unemployment and CPI (October), 11am: YoY price growth is expected to be 0.4% for the month, with the unemployment rate unchanged at 11.5%. Market to watch: EStoxx 50   DAX   CAC   EUR/USD   EUR/GBP

US Chicago PMI (October), 2.45pm, Michigan confidence (October, final), 2.55pm: The PMI number is expected to rise to 61.1, from the previous 60.5, while the final reading on confidence for October is expected to be revised up to 86.4 from 84.6. Market to watch: US indices, dollar crosses

Saturday 1 November

Chinese manufacturing PMI (October), 2am: The forecast is for a reading of 51.35, up from September’s 51.1, which would provide some confidence that the sector is still growing modestly. Market to watch: China A50   Hang Seng   FTSE 100   USD/JPY   AUD/USD   Copper

CAD/CHF

Bullish BAT pattern is very close to completion going into coming week. It present fairly attractive risk/reward ratio as entry requires relatively short stop.




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