Forecasts Macro EUR/USD for the week of October 22, 2017 : The market will buy the Euro against the monetary tightening of the ECB?




This week, the budget US has had a positive impact on the Dollar, which seems to enjoy the 1500 billion Dollars of tax cuts. The markets are anticipating a surge in growth that is expected to be positive for the Dollar. We will see… The issue of the debt, it does not move one iota. How long the United States will be able to buy growth in the credit ? Especially as many countries are trying to get rid of the Dollar in their trade. The pétroyuan is in the starting blocks. Catalonia has also weighed on the Dollar as the tone goes up between pro-independence and Madrid. This week the economic calendar is expected to come back under the spotlight as we will have the press conference of the ECB is very much expected by the forex.

European statistics

On Tuesday, investors will hear at 11am in the PMI indexes of the Euro Area. The consensus on a composite index (services and manufacturing) in slightly, to 56.5 vs. 56.7 in September.

Wednesday at 10am we will get the Ifo index of business climate in Germany for the month of October. It is expected to remain stable at 115.2.

Thursday is the ECB, which will attract all the attention. Expect that there will be a session of hesitant because the central bank was expected to play the cachottiers by reserving a part of its announcements for the next month. Overall, the consensus is for an extension of QE. The reaction of EUR/USD will depend on the duration of the extension and the magnitude of the reduction in the purchase of debt monthly.

Statistics US

Tuesday we will have the PMI indices US at 15: 45. The consensus expects an increase of the indices. 53.6 (against 53.1 in September) for the manufacturing sector and 55.6 (55.3) for the services sector.

Wednesday at 14: 30 will be published durable goods orders for the month of September. The consensus expects a slight monthly increase of 0.5 %, as previously. Follow also to 16h sales of new homes expected to decline by 0.9% after a decline of 3.4 % in August. Keep an eye on the monetary policy of the central bank of Canada to 16h.

Thursday at 15: 45 we will have the promises of housing sales for the month of September. The ECB is likely to move this metric to the second plan.

Friday at 14: 30 we will have the us growth in the third quarter expected rise of 2.6 % compared to 3.1 % in Q2.

Analysis EUR/USD

The pair could decide to get out of his range to take a direction. It will all depend on what the ECB will announce. The scenarios that will be the most neutral for EUR/USD are a $ 20 billion per month for 12 months, $ 30 billion for 9 months and 40 billion for 6 months. If the ECB delivers less than that, there is room for a further rise of EUR/USD because we should not forget that the bulk of the increase in the cross since the beginning of the year is linked to the monetary tightening by the ECB. Also note that Mario Draghi is set to make its announcements in two times. This could prompt the downside to not taking too big bets down for fear of a surprise at the next press conference.



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