Followme-Daily Forex Analysis

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#WeekAhead #Forex #Followme #SocialTrading
Hi Traders, happy new week! 
“He who seizes the right moment is the right man.”

Here is this week forex calendar highlights:
(GMT+0)
Monday
01:30   China PBoC Interest Rate Decision
reaction to Brexit vote and Canadian elections

Tuesday 
08:00   EuropeECB Bank Lending Survey
12:30   Canadian Retail Sales (MoM) (Aug)

Wednesday 
14:30 Crude oil inventories

Thursday
07:30   German Markit PMI Composite (Oct)
07:30   German Markit Manufacturing PMI (Oct)
08:00   Eurozone PMIs 
11:45   ECB Deposit Rate Decision
11:45   ECB Interest Rate Decision
12:30   US Nondefense Capital Goods Orders ex Aircraft (Sep)
12:30   ECB Monetary Policy Statement and Press Conference

Friday
06:00   German GfK Consumer Climate
08:00   German Ifo Business Climate

#GBPUSD #Brexit
The GBP/USD was continuing to find buyers late in the day on Friday, with investors reacting to some UK media reports that said Boris Johnson had secured enough backing to support his deal. However, what matters is the actual votes in the ‘Super Saturday’ sitting.

#Labour is strongly advising its #MPs to oppose the deal, and most, perhaps all, are likely to do so. 10 ‘no’ votes appear all but inevitable from MPs of Ireland’s DUP party that has also vowed to oppose the deal. So, the fate of Boris Johnson’s plan hangs partly on Tory pro-Brexit MPs who have repeatedly voted down previous deals
The #PM is busily making pleading calls to MPs ‘across the Commons’ as the weekend approaches, says Downing Street. There’s really no telling how persuasive he will be, till the result of the vote is known. It’s a recipe for investors to execute only the most necessary moves in advance, before a possible ‘manic Monday’ in Saturday’s wake
#MarketsReaction
Should the deal get the majority required in Parliament for the #UK to leave the #EU in an orderly fashion, we could expect sterling to rally and the #FTSE to jump higher in a knee-jerk reaction, similar to what we saw on Thursday’s announcement of the Brexit deal. However, the stronger pound could eventually weigh on the #FTSE given the index’s high percentage of multinationals earning abroad which will be hit by the less favorable exchange rate.
Should Boris Johnson’s selling skills fail him, and the deal does not pass through #Parliament we can expect the pound and the FTSE to sell off sharply, the reverse of Thursday’s reaction, with the FTSE then potentially rebounding as it responds to sterling’s decline.

#ECB
It will be #MarioDraghi’s last policy meeting as the head of the #ECB, and having just re-introduced #QE at the last meeting he will likely go out with a whimper. The euro has appreciated since the ECB’s last meeting, partly because of Brexit optimism and also due to a weakening dollar. Also, raised hopes over a US-China trade resolution, which could boost Chinese demand for Eurozone exports, has also supported the single currency. Furthermore, several ECB policymakers have criticized Draghi’s renewed bond-buying program and called for a change of strategy when Christine Lagarde takes over next month. The probability of further policy loosening has therefore fallen.

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#forex #forexnews #Brexit
#GBPUSD is trading at 1.2867, having breached key support on Tuesday, courtesy of Brexit delay.
The pound fell below the 50-hour moving average, confirming a bearish reversal on short duration charts. The key MA had consistently reversed pullbacks throughout the rally from 1.22 to 1.30 and may work as stiff resistance henceforth. 

The GBP was offered as #PrimeMinister #Johnson's #BrexitBill won parliamentary support, but the government’s timetable of just 3 days debate on the bill was rejected. 

With the parliamentary defeat, the probability of Britain leaving the European Union (#EU) before the Oct. 31 deadline has dropped sharply. 

Further, a source in Prime Minister Boris Johnson’s office said on Tuesday that a new election would be the only way to move on from Britain’s Brexit crisis if the European Union agrees to a delay until January. 

On a daily chart, the uptrend in GBP/USD appears to have stalled. Signs of indecision loom as a #Bearish Harami candlestick pattern risks paving the way for a reversal. Prices are eyeing near-term support which is a range between 1.2773 and 1.2798. A close under this barrier could open the door to testing former highs from September. Otherwise, clearing resistance at 1.3001 prolongs the uptrend.
Expectation for GBP to “retest the 1.3010/15 level” was incorrect as GBP rose briefly to 1.3000 before plummeting to 1.2862 during NY hours. Upward pressure has dissipated and the short-term risk is for a deeper pullback. That said, any weakness is viewed as a lower trading range of 1.2810/1.2920 and a sustained decline below 1.2810 appears unlikely for now.

Next 1-3 weeks: 
#GBP tried to break clearly above 1.3000 for the second straight day yesterday (22 Oct) but slumped after touching 1.3000. For now, there is no change to our view from Monday (21 Oct, spot at 1.2880) wherein “GBP has to ‘punch’ above 1.3000 and register a NY closing above this level in order to indicate that the current rally has enough ‘ammunitions’ to extend to 1.3050, possibly as high as 1.3150”. While there is no change to our view, severely overbought conditions suggest GBP could ill afford to dither below 1.3000 or the risk of a short-term top would increase rapidly. From here, unless GBP cracks and stays above 1.3000 within these 1 to 2 days, a break of 1.2770 (no change in ‘strong support’ level) would indicate that the positive phase that started more than a week ago (see annotations in the chart below) has run its course. Looking ahead, a breach of 1.2770 would suggest that GBP is ready to ‘take a breather’ after the steep rally over the past couple of weeks.
 

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#WeekAhead #Forex #NewWeek #Followme #SocialTrading
(GMT+8)
Monday 
23:00   ECB's President Draghi speech

Tuesday 
07:30   Tokyo CPI ex Fresh Food (YoY) (Oct)
14:45   RBA's Governor Lowe speech

Wednesday 
08:30   RBA Trimmed Mean CPI (QoQ) (Q3)
08:30   Consumer Price Index (QoQ) (Q3)
19:00   Harmonized Index of Consumer Prices (YoY) (Oct)
20:30   US Gross Domestic Product Annualized (Q3)
22:00   CANADA Bank of Canada Monetary Policy Report

Thursday 
02:00   US Fed's Monetary Policy Statement
03:30   FOMC Press Conference
24h   Brexit Deadline
18:00   Europe Gross Domestic Product s.a.

Friday 
09:45   China Caixin Manufacturing PMI (Oct)
22:00   US ISM Manufacturing PMI (Oct)

The fate of the dollar could be decided by the upcoming #Fed policy decision. While the market is fully pricing in a third consecutive #RateCut, the odds for another cut in December have dropped to 40%.  The Fed is likely to cut rates but possibly signal they will wait-and-see the impact of recent batch of cuts.  #Powell has highlighted Greenspan’s mid-cycle adjustment in the 1990s and we could see that remain the game plan.
The #TradeWar should see incremental updates, but we may not see a major move until we get to the Trump-Xi meeting at the APEC summit next month. The #USD has weakened significantly in the early part of October and we could see this recent rebound be short-lived if the deep pessimism for the global outlook eases, and the dollar to remain very vulnerable.

#Oil prices have been rising towards the back end of the week aided by a surprise inventory drawdown on Wednesday. Oil has been gradually rising since testing its summer lows. Remains vulnerable to global growth worries and further attacks in the middle east.

#Gold has been creeping off its lows but is still struggling to gather any upward momentum. A softer dollar has aided the resilience in the yellow metal but it continues to linger around $1,500. Gold volatility has been relatively muted but the risk environment remains fragile.

The #UK remains in limbo as the country waits to hear whether its extension will be accepted and how long it will be. #BorisJohnson has proposed to Labour that in exchange for an election on 12 December, he will extend the timetable for the #BrexitBill until 6 November. Labour expected to respond on Monday once extension from EU becomes clear. It’s unclear when the #EU will respond as there’s apparently a dispute around whether to offer the full three months or just a couple of weeks, reportedly favoured by France. It’s extremely unlikely it will be rejected altogether but the currency remains volatile.
Weak economic data out of #China has a serious knock-on effect for most of Asia, who rely heavily on exports to China. It’s also likely to filter down to slower global growth.
Quarterly #CPI data on Wednesday could be a market mover, but it’s not the #RBA’s major focus at the moment. Prices have been trending lower since Q2 last year. Weak CPI data could give the RBA more wiggle space for rate cuts, which would be #AUD negative.