Hi All,

How are you all doing and I hope everyone is looking forward to this week.

At the end of the trading day on Friday, we saw the US rise against nearly all the major currencies mainly because of better than expected economic data.

Consumer spending rose 1.9% last month, more than two times the market’s estimate.

Demand rose 1.5% compared with a 0.4% forecast. Despite high unemployment and less jobless benefits spending rose for the fifth month in a row. With clothing and accessories leading the gain, part of this increase could be attributed to delayed school reopening.

However, the data also justifies the decisions by state governors to keep their economies open even as more than 20 states set records for new coronavirus infections.

The improvement in consumer sentiment was more of a surprise given the growing election, fiscal stimulus and coronavirus uncertainty.

With less than three weeks to go before the U.S. election, the main focus continues to be on stimulus talks and any unexpected policy announcement or policy threats from President Donald Trump.

We will highly recommend to keep an eye on the headlines because that will be the major driver of dollar flows ion the coming days.

 USD/JPY  will be expected to edge higher leading towards general elections.

On the front of GBP, the Oct. 15 Brexit deadline set by Prime Minister Boris Johnson passed with no agreement. Who woul dhave thought.

According to an EU spokesman, talks ended with Johnson telling the UK to prepare for a no-deal Brexit.

As a result, The Sterling became bullish. GBP traders are clearly hoping that won’t happen and negotiations will continue for the next few weeks.

European Commission President Ursula von der Leyen confirmed that her team will return to London next week to intensify negotiations. However, Johnson is not having it and he’s taking a hard stance by saying there’s no point continuing talks unless there’s a fundamental change in the EU’s position.

With the risk of a no-deal Brexit growing, coronavirus cases exploding and London hit with new restrictions, GBP/USD should be trading much closer to 1.28 than 1.30.

This leads us to the biggest loser,The euro!

The Euro is also destined for further losses against the dollar with coronavirus cases surging across the Eurozone. 

In Italy, new coronavirus cases hit a new record high for the third day in a row prompting the government to shut schools in the southern Campania region.

It may not be long before cases top 10,000 a day. In France, more than 30,000 new virus cases were reported on Thursday. If cases do not stabilize quickly, a full lockdown could be expected

As a result the EURUSD could fall to 1.16 level.

So hey, there’s a lot to look forward to this week.

So, let’s quickly look at the most important news coming out this week.

Building Permits, USA

Date: 20 October 2020

Influence: USD and its subsequent pairs

The Building Permits released by the U.S. Census Bureau, at the Department of Commerce shows the number of permits for new construction projects. It indicates the movement of corporate investments (U.S. economic development). It tends to cause some volatility to the USD. Typically, if more permits are given out, it means investors will be bullish or optimistic about USD.

Consumer Price Index, U.K.

Date: 21 October 2020

Influence: GBP and its subsequent pairs

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The Central Bank pays very close attention to this figure in its role of maintaining price stability. Because the Federal Reserve Bank believes that core inflation is a better gauge of underlying price pressures, it is watched more closely than overall inflation, which tends to be more volatile.

Retail Sales, Canada

Date: 21 October 2020

Influence: CAD and its subsequent pairs

The Retail Sales released by Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often viewed as an indicator of consumer confidence, as it shows the performance of the retail sector in the short term. Positive economic growth anticipates bullish movements for the CAD.

Initial Jobless Claims, U.S.

Date: 22 October 2020

Influence: USD and its subsequent pairs

The Initial Jobless Claims released by the U.S. Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labour market. A larger than expected number indicates weakness in this market which influences the strength and direction of the U.S. economy. If jobless claims fall, it is seen as positive or bullish for the USD.

Existing Home Sales, U.S.

Date: 22 October 2020

Influence: USD and its subsequent pairs

The Existing Home Sales report released by the National Association of Realtors provides an estimated value of housing market conditions. As the housing market is considered as an important factor for the U.S. economy, it generates some volatility for the USD. A high reading is positive for the dollar, while a low reading is negative.

Markit PMI Composite, eurozone

Date: 23 October 2020

Influence: EUR and its subsequent pairs

The Manufacturing Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results provided by manufacturing firms throughout the region. A reading above fifty suggests the manufacturing sector is expanding, while a reading below fifty suggests the manufacturing sector is in contraction. Results are displayed by the questions asked, showing the percentage of respondents reporting an improvement, deterioration, or no change since the previous month. A reading that is stronger than forecast is generally supportive or bullish for the euro, while a weaker-than-forecast reading is generally negative or bearish for the euro.

Trade Wisely!

HYCM is a MULTI-REGULATED BROKER proving service since 1977. Amazing how long they have been in the game.

Henyep Capital Markets (UK) Limited is authorized and regulated under the Financial Conduct Authority with reference number 186171.

HYCM (Europe) Ltd is authorized and regulated under the Cyprus Securities and Exchange Commission under license number 259/14.

HYCM Ltd is authorized and regulated under the Cayman Islands Monetary Authority under reference number 1442313.

Henyep Capital Markets (DIFC) Limited is authorized and regulated by the Dubai Financial Services Authority with license number 000048.

HYCM Limited is an International Business Company registered in Saint Vincent and the Grenadines with registration number 25228 (IBC 2018).

If you found this very helpful, you can download our eBook here completely for free where you will be able to get a comprehensive guide on trading in the FX market.

Were these helpful? Leave a comment below and discuss them or throw in your own tips!

Please follow and like us:


Leave a Reply

Your email address will not be published.