Last week was interesting in the financial markets. The dollar extended its slide on the back of Trump's comment, downgrade of Global growth forecast by IMF and perhaps the dollar took a cue from the decline in global equities. Trump said that FED is acting to "fast to raise rates". He also said that "FED is crazy".
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| EURUSD 4 hr Chart |
The Eurusd,at the beginning of last week fell to a low of 1.1431 on Italian concerns and rebounded to a peak of 1.1610. The rebound coincided with the resignation of a top official in Trump's administration. Well, that was a modest rally which is not supported by data. Recent data from Germany, which is the biggest economy in Europe is not looking good. There was a decline in the last export and import data released. Industrial Production also declined. A break of 1.1610 would target next resistance at 1.1814. On the downside, a break of of minor support at 1.1534 would target EURUSD low of 1.1431 and then 1.1300.
Despite softer UK GDP data last Friday, GDP had little impact. The reason is that Brexit is the primary focus in UK. Investors are waiting for the outcome of meetings of the EU officials and UK officials on Terms of withdrawal. Should there be a 'good' deal to both parties, GBP would soar. If there is a 'no deal', am afraid, GBP would tank.
Looking ahead this week, US Retail sales report is scheduled to be released on Monday. On Wednesday, Minutes of September FOMC meeting would be released.
Employment, Inflation and Retail sales data are scheduled to be released this week in the UK. All these data to me is a distraction, the primary focus is Brexit.
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