Weekly Update, Nov 5 – 9: Top Forex Setups & Economic Events Worth Trading This Week

Posted Sunday, November 4, 2018 by
Arslan Butt • 3 min read
  • Dollar paired losses on surprising US nonfarm payroll ,data.
  • Sterling remained in the limelight this week over favorable news regarding Bexit. Is it likely to continue the bullish momentum in the coming week?
  • The FED, RBA & RBNZ are ready to release monetary policy decisions. What to expect from them?
  • A quick review of top-tier economic events from the global economies.

On Friday, the market closed with a stronger dollar sentiment as the Greenback pared losses against a basket of currencies. Bulls entered the market after employment report explicated US job growth bounced sharply in October, steering further labor market tightening that could encourage the Federal Reserve to boost interest rates again in December.

On Monday, the market is very likely to trade with a stronger dollar sentiment on better than expected job reports and hawkish FOMC sentiments. Let’s take a deeper look at the economic events & trade setups…

Dollar Index – FED Monetary Policy In Focus

After a strong October employment report in the US, beating economists forecast, adding 250K new jobs and wage growth of 3.1% over the year are adding up to hawkish sentiments from the current FOMC. Although the Federal Reserve isn’t expected to make any changes in interest rate in it’s Nov meeting, Dec meeting is widely expected to show a rate hike by 25 base points.
The Fedwatch indicates 81% probability of Fed raising rates to 2.25%-2.50% at December 18-19 policy meeting. That said, the dollar index seems an attractive investment for swing traders and we may see investment moving in next week.

Weekly Support & Resistance Levels

Support Resistance
95.7 96.76
95.37 97.09
94.84 97.62
Key Trading Level: 96.23

  • Technically, the dollar index trades above 20 & 50 periods EMA which signifies a bullish sentiment of traders.
  • The recent weekly candle managed to close above a weekly resistance zone of $96.35, fueling the odds of further buying in the coming week.
  • The RSI & Stochastics are crossing above 50, indicating a strong bullish momentum in the dollar.
  • The dollar index can target $97.75, while the support prevails at $96.30 and $95.15.

GBP/USD – Series of Fundamentals Lined Up

The British Pound jumped during the previous week on expectations of a Brexit deal and signals from the Bank of England that if the departure from the European Union is smooth, more interest rate hikes could be on the way.

GBP/USD – Technical Outlook

On the weekly chart, the cable took a bullish turn to test the 20 periods EMA at $1.3035, but it failed to give us a bullish crossover. This signifies uncertainty regarding the bullish reversal in the pair. It’s a fundamentally driven week, and we can’t determine much based upon the technicals. However, the pair may face an immediate resistance near $1.3035 and $1.3175 along with a support near $1.2800.

The bullish breakout of $1.3175 is likely to push the GBP/USD into a new trading zone, which may offer further buying opportunities until 1.3335.

Weekly Support & Resistance Levels

Support Resistance
1.2707 1.3021
1.2585 1.3212
1.2272 1.3525
Key Trading Level: 1.2899

GBP/USD- Fundamental Outlook

1 – Services PMI On Monday, the Markit will be releasing the services PMI figures at 9:30 (GMT). Economists are expecting a slight drop from 53.4 to 53.9 which may place massive influence on the pair. However, we should be ready to capture major changes in the data.

2- Gross Domestic Product – The Office for National Statistics is due to release GDP figures on Friday at 9:30 (GMT) with a positive forecast of 0.1% vs. 0.0% growth in September 2018. While the Prelim GDP q/q is also expected to jump from 0.4% to 0.6%.
Fellas, the GBP/USD is likely to stay supported this week in the wake of positive forecasts.

AUD/USDRBA Monetary Policy Decision Awaited

On Tuesday at 3:30 (GMT), the Reserve Bank of Australia will present its monetary policy decision. The odds of any change to the record-low cash rate of 1.50% are minimal. Therefore, we may not see any major change in the AUD/USD. I really wish they change the rates as only then will we have a chance to capture a nice amount of quick pips on Aussie pairs.

AUD/USD – Technical Outlook

Taking a look at the weekly timeframe, the AUD/USD is peaking out of the bearish channel which was keeping the pair in a tight range of 0.7045 – 0.7190. Thing is, the weekly closing is outside the bearish channel and most importantly it’s a bullish engulfing pattern. It shows a strong bullish sentiment of traders. Therefore the continuation of a bullish trend may lead AUD/USD towards 0.7285 and 0.7400 in the coming week.

Weekly Support & Resistance Levels

Support Resistance
0.703 0.7138
0.6971 0.7188
0.6863 0.7297
Key Trading Level: 0.708

Reserve Bank of New Zealand – Monetary Policy Statement

On Wednesday at 20:00 (GMT), the Reserve Bank of New Zealand will release the Official Cash Rate. Just like RBA, the RBNZ is also expected to keep it on hold at 1.75%.
Alongside Cash rate, the Rate Statement and RBNZ Monetary Policy Statement will be monitored. The RBNZ Press Conference is also due at 21:00, and I hope that RBNZ Governor Graeme Wheeler will speak up about his future policy actions.
That’s all for now, but stay tuned for live market updates and forex trading signals. Good luck and keep following FX Leaders for another profitable week.

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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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