Article by http://growthaces.com
EUR/USD
The coming week will bring relief to investors after increased market activity on Thursday (ECB meeting) and Friday (US non-farm payrolls data). The main events that will attract the attention are scheduled for the second half of the week: the ECB’s second TLTRO auction (on Thursday), US retail sales data (Thursday), Euro zone industrial output data (Friday) and U.S. Michigan consumer confidence (Friday). The medium-term outlook for the EUR/USD is bearish – the rate is likely to fall below 1.2200, but a slight recovery in the short-term cannot be excluded.
GBP
The most important economic release in the United Kingdom this week is industrial production reading (on Tuesday). We have also UK trade balance data on Wednesday, but the reaction of the GBP is likely to be limited.. The GBP may recover slightly against the USD this week. However, the medium-term outlook is still bearish. The GBP will be probably relatively strong against other major currencies.
JPY
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The agenda for the USD/JPY is busy this week. Third-quarter GDP data will be revised on Monday (00:50 GMT). The release of consumer confidence index is scheduled for Wednesday and machinery orders data for Thursday. The attention will be focused on general election (December 14). The projections showed that Japanese Prime Minister Shinzo Abe’s ruling party may increase its seats and his coalition keep its two-thirds majority in parliament’s lower house. The USD/JPY remains in bullish trend. The nearest resistance level is 121.06 (76.4% of the 135.20-75.31 slide). Breaking above this level will open the way for further gains.
CHF
In the opinion of GrowthAces.com the Swiss central bank will keep the benchmark rate unchanged at its meeting on Wednesday. Inflation remains very low and economic growth is slowing, but the central bank is strongly unwilling to bring rates into negative territory. The SNB is also unlikely to change its EUR/CHF floor, mainly due to recent depreciation of the EUR against other major currencies. However, lower oil prices may result in lower inflation projection. Any action from the SNB will result in strong gains in the EUR/CHF and USD/CHF rates, but the likelihood of such a scenario is low.
AUD
After the strong collapse of the AUD/USD rate last week, we expect a slight recovery in the coming days. The AUD traders will be focused on employment data (scheduled for Thursday) this week. We should note the correlation ratio between the AUD/USD in recent two weeks days amounted to 87% vs. the correlation of 68% calculated in 30-days period. (See our latest Correlation Matrix). Changes in commodities prices will also have strong influence on the AUD traders’ decisions.
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