The aftermath of the EU summit on how to rescue Europe we saw the markets take out much of their pent up risk appetite driving the pairs and markets higher than many of us expected with the EURUSD reaching a high of 1.4246 halting at the top created 11/4/2010. Risk appetite drove S&P to close +3.78% for the week and we watched as the AUDUSD catapulted to 107.52 falling short ofthe 68% retracement on the daily move down from 110.64. Looking ahead this is a big week for the currency markets as RBA, ECB & Fed release November interest rate statements and market outlooks. Monday markets will focus on RBA as they release their interest rate statement. Analysts’ are mixed on what the statement will contain, markets are calling for .25 (some forecasts indicate .50 with others at no change) basis point reduction on the heels of lack lust economic data from the Aussie. This is an important release for the AUDUSD which will be preceded by China’s PMI number. Markets will undoubtly pour over the statements by the RBA for dovish or hawkish statements for indications of this risk rally continuation. All eyes are will shift and focus on the two gorillas’ in the room the ECB and the Federal Reserve which will likely overshadow the RBA. There is lots of chatter about how Draghi will kick off his ECB presidency. Questions remain around weather Draghi will make the much needed rate cuts to relieve pressure from the euro or will he hold the line of his predecessor and keep rates unchanged. One this is for sure it is highly unlikely we will see a rate hike from the ECB anytime soon. Markets will be very critical of Draghi first statement and will look to characterize his tenure in office by his initial actions. Anticipate volatility around this statement and lots of speculation on the ECB outlook. Draghi will be followed by Fed Chairmen Bernanke who will grab the market’s attention once again as the federal reserve releases their statement and outlook of the us economy. L ast week we heard from Fed member’s discuss ion QE and their willingness to issue another round. These are likely feelers for the committee to gauge market reaction. With the Feds commitment to keepingrates low through 2013 we do not expect rate changes, however the markets will dissect every word Bernanke says alongside each detail in the statement. In the days leading up to the Wednesday’s statement expect to hear markets, addicted to free money, cry out for QE3. Do not be confused by this rhetoric Bernanke will likely keep the options open and discuss the evaluation ofoperation twist conducted by the Fed in September. In closing this week is expected to be a pivotal week for the markets with lingering uncertainty from the Euro-zone as Dr aghi is put to his first test. The bulls will likely drive the markets up Monday to close out October and start September with a bang. These risk on moves are not fundamentally supported and can quickly reverse as the markets are brought back to reality of the economic climate. That being said the markets closed clearly bullish last week so be careful not to get trampled by the bull excitement. Fundamental OutlookElite Global TradingForex Weekly CommentaryOct 30th –Nov 5th 2011Volume 1, Issue 26In this issue: Fundamental Outlook 1 AUDUSD GBPUSD EURCAD2EURUSD NZDUSD 3Yen Crosses Event Risk4Contact Info Disclaimer5
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
8/3/2019 FX Weekly Commentary - Oct 30 - Nov 05 2011