EUR/USD remained within its recent range last week, dropping sharply in reaction to Fed’s Hawkish finally stops its decline and return to roughly where we started the week. This kind of behavior is typical of a cross, which no longer really know which way to choose. But it is clear that the bulls don’t throw in the towel. Despite the Fed will reduce QE as early as next month (!!!), the Dollar drops. This is a strong signal that the market consensus seems to be of the opinion to extend a rally to the upside.
Monday at 10am we will have the only important stat, the German Ifo for August. The business climate index is expected to rise to 116 against 115.9 in the previous month.
Wednesday at 10: 30 we will have the Uk GDP which should post growth of 1.7 % year-over-year for the second quarter. +0.3 % expected quarter-on-quarter on the other.
Thursday, Germany will communicate its inflation to 14h. The consumer price index is expected steady at 1.8 % for the month of September.
Friday, he will have to keep an eye on the unemployment figures in German at 10 am. In the month of September, the consensus anticipates 5000 unemployed less. A little earlier at 8 a.m. we will also have germany’s retail sales which are expected to be strengthened further in August, growing 3.3 % year-on-year against 2.7 % previously. A reversal of these two statistics would herald a bad day for Berlin.
Tuesday at 16h we will have consumer confidence, which is expected to further improve in spite of the levels were already very high. For September, the consensus is 122.9 120 against earlier. At the same time be published new home sales. It expects a rebound to 3 % after a dip of 9.4 % in July.
Wednesday at 14: 30 will be published the statistical star of orders for durable goods (indicator of investment). The consensus is for August, a month jump of 1% after the hole of 6.8 % in July. Durable goods orders, the principal had to advance by 0.2 % after +0.6 % previously. The promises of housing sales to 16h may also have an impact. A further reduction is anticipated after decline of 0.8 % in July.
Thursday at 14: 30 we will have a salvo of statistics with in the first place 14: 30 GDP US in the second quarter is expected stable at 3 % (annualized). Also watch out index price for the GDP which is expected to remain in a 3% increase. The inscriptions weekly unemployment will also weigh on the forex and the consensus on a number that is negative enough 270,000 new registrations.
Friday we will have an inflation index even more influential. The EOC will be published at 14: 30 and was shown to be 1.4 % for the month of August in the first estimate.
The rally uptrend is still valid and we are of the opinion to continue to play the trend this week because we will not have events that might trigger a bearish reversal sustainable. The channel could hold, which means that it would be better to enjoy from a low to buy again, the economic calendar not being built this week to create a great volatility. The distrust of the financial markets vis-à-vis Trump, the theme of the de-dollarization, which is in full swing and the «good» growth of the European support the Euro. Unless Draghi is really more Dovish than anticipated in October, EUR/USD may be struggling to correct.