The pair has been silent yet positive for the past week or so, and has gained considerably where it tested its multi-months high level of 1.3650 and is currently trading at 1.3577 after taking a 38.2% bearish correction. The economic indicators for the Eurozone have been mixed but much depends on this week’s releases as the German trade balance is set to be released on Tuesday after which German factory orders would also be unveiled in the European session.
Talking about Wednesday, we have German industrial production data that could cause good volatility in the market as the German industrial sector contributes significantly to the German economy and also determines the level of exports to a certain extent. Later on, we have French industrial production data along with the ‘probable’ release of NFP and unemployment rate data of the U.S. economy.
Provided the pair trades above 1.3552, it would be safe to go long, but below the 1.3536 support area, bears would become active and the pair would enter a bearish zone.
Technically, the British pound is currently playing in a bearish zone, but its overall outlook is still positive to some extent where buying would become safe if it moves above the 1.6135 resistance area. This week’s upcoming data releases include manufacturing production, trade balance, industrial production, NIESR GDP estimate, and most importantly the interest rate. Although the interest rate would be kept the same as it has been before, but major dependency is on the manufacturing production and GDP estimate that could create a new direction for the pair may be.
Provided it moves above and sustains above 1.6135, then it would become bullish yet again, but below 1.6119 sellers have a good psychological advantage to short the pair.
Aussie gained massively against the U.S. dollar in September where it soared nearly 500 points, after which it had completed its 38.2% bearish correction, and is back up to the 0.9423 level where buyers are feeling safe to long the pair. Not many news releases are due for this week; however, the employment change and unemployment rate is due where one-sided data could disturb the movement in the market significantly.
It is safe to buy as long as it sustains above the critical support level of 0.9375.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org