By ForexTime
The combination of geopolitical risk and Fed rate expectations injected markets with explosive levels of volatility this week. We could see more action later today due to earnings announcements by Wall Street banks.
And even before things settle down, volatility is likely to intensify in the week ahead thanks to top-tier economic reports and speeches from policymakers among other key risk events:
Monday, October 16
Tuesday, October 17
Wednesday, October 18
Thursday, October 19
Free Reports:
Friday, October 20
A death cross happens when an asset’s 50-day simple moving average (SMA) moves below its 200-day SMA. This technical pattern is widely viewed as a signal that prices may continue to fall further in the medium to longer term.
After initially kicking off the week on a positive note amid a weaker dollar, the GBPUSD tumbled aggressively on Thursday thanks to the stronger-than-expected US inflation figures. With the dollar drawing strength from renewed Fed hike bets, the GBPUSD could resume its downtrend.
The latest UK inflation data published on Wednesday, 18th October is likely to influence expectations around the BoE’s next move. Before this key report, the UK will release its latest batch of labour market data on Tuesday, October 17th. Any further signs of the UK jobs market’s cooling may support the argument around the BoE keeping rates on hold for the rest of 2023.
Dollar volatility could be the name of the game next week due to key US economic data and speeches by a host of Fed officials. After receiving a boost from stronger-than-expected US inflation data, dollar bulls could switch into higher gear if the incoming economic releases support the case for another Fed hike in 2023.
The US Empire manufacturing will be in focus on Monday, with key US retail sales and industrial production figures published on Tuesday and US initial jobless claims on Thursday. These reports will be complemented by speeches from various Fed officials including Fed chair Jerome Powell.
The GBPUSD remains under pressure on the daily charts with the looming “death cross” formation signalling a steeper decline down the road. Although the currency pair experienced a technical bounce from seven-month lows, prices are still trading below the 50, 100, and 200-day SMA while the MACD trades to the downside.
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