The week ahead is going to be completely different from the previous one as the trading volume comes back after the long weekend in the United States. The volatility should pick up also due to the seasonal factor, as this week is going to be the last one in November and it will be only 5 trading weeks remaining to the end of the year. The economic calendar is packed with important data from major regions and countries. Several central bankers, including Jerome Powell and Mario Draghi, are going to speak on the macroeconomic outlooks and monetary policy forecasts. Geopolitical topics are also in the market’s focus with the Brexit saga coming to an end and the U.S - China trade deal negotiations. G20 summit in Argentina promises a lot of breaking news to influence the financial markets’ sentiment. Commodity traders will follow OPEC statements as well as others giant oil producers in their attempts to save the price of oil which has been losing the ground for seven weeks in a row. Technical patterns are also dependant on the monthly close price as it’s the traditional period when hedge funds take their profits back home, adding repatriation flows to the currency market. The low-yields sector will be also in traders’ focus in the light of upcoming meetings of several major central banks in December.
Monday, November 26.
The trading week will kick off with the data from New Zealand and Australia. RBNZ will report Core Retail Sales for the third quarter, while RBA Governor Lowe is due to speak about the economic outlook in the country. Japanese Manufacturing PMI and Leading Index are going to impact on the USD/JPY exchange rate during a volatile Asian session as traders will come back on working places after the long weekend. Industrial Production in Singapore could also add volatility to the price action. The European trading session will begin with Swiss data. The employment is forecasted to remain flat in the country with 5.048M reading for the third quarter. A much larger impact on the price action is expected on the release of German Business Expectations and Current Assessment Indexes. Both are predicted for a modest decline with the headline event of IFO Business Climate Index of 102.3 versus 102.8 previously. If that confirmed, EUR/USD could accelerate its losses. Another important event for the single European currency will be the series of speeches be ECB members Praet, Coeure and Nowotny. ECB President Mario Draghi will end up that series of press conferences with his own speech at 02:00 PM GMT. The big question whether is he going to save the euro bulls by verbal interventions, or will he just push on the different direction, in favour of the bears. The Bank of England Governor Carney is also going to host a press conference on Monday. The rest of the calendar is empty, so the price action will be determined by the U.S equities after the long weekend.
Tuesday, November 27.
New Zealand keeps reporting its macroeconomic data on Tuesday with Exports and Imports Volume which are widely expected to enlarge positive Trade Balance Surplus in October. If that confirmed, the Kiwi bulls might get an additional supportive factor from the fundamental part of the analysis, lifting NZD/USD to next recovery levels after the sharp downtrend in 2018. Japanese Corporate Services Price Index and Bank of Japan’s Core CPI are about to answer the question whether the BoJ is intended to keep the soft monetary policy, supporting the local exporters on external markets and lowering the Yen exchange rate. USD/JPY has a good technical background to continue climbing towards the year-to-date highs, so the fundamental support is required for the bulls to proceed. Otherwise, we might see a further rebound towards 112.00 support level. The European trading session is forecasted to be comparatively quiet due to the lack of important data on the calendar. The only exception will be Italian and French Consumer confidence with a decline consensus for October. OPEC meeting is extremely important for oil traders as the commodity is desperately trying to find the ground after the seven weeks of the plunge. Oil producers will gather in Vienna to discuss common efforts on saving the black gold from further decline. The press conference is tentative though, so the volatility is expected to surge on Tuesday. Nervous traders should stay away from their terminals. The American trading session promises to be much more active with a bunch of data on tap. The headline is CB Consumer Confidence report for November with the market consensus of 135.5 versus 137.5 previously. Several FOMC members will speak on Tuesday as well, including Clarida Bostic, Evans and George. The greenback traders should stick to the statements in order not to miss the Federal Reserve’s intentions for the upcoming year. API Crude Oil inventories in the United States will finish the super-busy trading session on Tuesday.
Wednesday, November 28.
Two events deserve a forecast for Wednesday. Both will take place in the U.S. Both are extremely crucial not only for the daily price action but also for several weeks ahead. The first one is the U.S. Gross Domestic Product report for the third quarter. Economists expect the second reading of the report to stay flat compared to the first one at the level of 3.5%. Taking in count the record high level of the GDP growth in the second quarter (4.2%) the in-line release might be comprehended as a weak one. However, any stronger-than-expected outcome will support the greenback. The future monetary policy will be discussed during the FOMC Chairman Powell’s press conference at 05:00 PM GMT. The Federal Reserve would not avoid tough questions about the possible pause in the regulator’s tightening cycle which hurts the corporate sector, according to some analysts. Therefore, if Powell confirmed his dovish tone in the previous press conference, the U.S. dollar would plunge versus its major peers, as the market already started to price in several interest rates hikes in 2019. The U.S. Crude Oil inventories report will be also important for the price of oil.
Thursday, November 29.
Australian Housing sector data, New Zealand Business Confidence and the speech of BoJ Board member Masai - those are the key events in the Asian trading session on Thursday. The economic calendar in Europe is packed with much more important news and reports. German Unemployment change (-10K forecast), French GDP (1.5% YoY), Spanish CPI (2.3% yearly), EU Business Survey, German CPI (2.3% YoY) - those reports will influence the super-busy trading session for the single European currency. Will it be able to withstand the recent bearish pressure in the scope of weak data? That’s a million dollar question. We suggest, no. The United States will report one of the most crucial reports for the Federal Reserve in the light of inflationary pressures monitor. PCE deflator is forecasted to come along with the previous month at the level of 2.0%. Any shift on the downside would push the greenback towards multi-weeks low levels, as the assumption of the inflation to accelerate will not be confirmed. FOMC will also publish the meeting minutes from the latest meeting and traders will see how dovish they were while deciding to stay on hold. That’s a risk factor for the greenback as well.
Friday, November 30.
The last trading day of the week is also the last day of the month, so repatriation flows might be significant for all of the currency pairs including EUR/USD, as traders will take their profits from the monthly trading cycle. Besides that, the economic calendar is also busy with crucial data on tap before several major central banks’ meetings next month. Tokyo Core CPI will have a huge impact on USD/JPY. Private Sector Credit will influence the price action for AUD/USD. Chinese Manufacturing PMI will force emerging markets currencies traders to act. Nationwide HPI in the UK will give food for thoughts for the Sterling bulls. French, Italian and Eurozone CPI will make Draghi scratching the head, trying to invent new justifications to keep the low-interest rates at the same level in the European Union. Canadian GDP report should resolve the situation with currently overbought USD/CAD. That’s more than enough as for the final trading day of the month.