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The RBA will be in focus this week as the central bank outlines its current stance on monetary policy. Recently the RBA has been cutting rates in order to stay ahead of the global risk of the US vs China trade war. The central bank is only 6% likely to cut rates according to central bank sentiment tools suggesting they are more likely to hold rates going into this meeting. This could be a positive for the Australian Dollar with the currency being the strongest last week.
In other news, we are likely to hear from the new ECB president Christine Lagarde as she recently took over from Mario Draghi on the 1st of November. The new ECB president will likely continue the rhetoric set by Draghi in the near term.
The Bank of England is also set to announce its latest monetary policy outlook and will likely hold rates at 0.75% due to the snap election and continued risk around Brexit.
The USD index is likely to continue lower this week and test the significant supporting trendline. The USD may be in for a quiet week looking at the economic calendar however we do have some Federal Reserve members speaking and any mention of monetary policy could shake the market.
EURUSD is likely to head higher and test the key 1.1200-1.1218 resistance zone. The key to a breakout of rejection may lie with the USD Index. If the index finds the support we could see this currency pair reject the resistance and head lower.
AUDUSD is also heading towards key resistance with the first being a trendline from the recent weekly highs. If the price surpasses this level then the next key resistance rests at 0.7000. If the market spikes into this area on the central bank announcement we may see traders defend this level.
NZDUSD weekly chart shows the price is currently re-testing the key resistance and weekly lows around 0.6440. We could expect to see some short-term weakness re-enter the market here with the RBNZ likely to cut rates in their next meeting.
USDJPY could move lower if the risk-off sentiment continues, the price on the weekly timeframe highlights a rejection of the 109.00 resistance suggesting the price could move lower to re-test the 107.00-106.77 support.
CADJPY has also found resistance at the weekly swing highs around 83.00. Price closed as an advanced bearish engulfing candle suggesting the bearish sentiment will continue. Minor support sits ar 81.50 where price could test in the short-term.
NZDCAD is starting to find
support at the key demand zone as expected. The strong bullish close could be
an indication of what is to come in the short-term. Long opportunities will
likely look for the key lows at 0.8650 as targets.