Weekly Technical Analysis For November 11th to 15th, 2019

Keep Your Eye On Inflation Numbers From US And Eurozone This Week

EUR/USD:

The EURUSD pair found sellers from the 1.1165 daily resistance level and then showed a downward movement last week. The US Dollar rose versus the Euro as it advanced on hopes for an improving US trade outlook despite persisting Federal Reserve interest rate cut bets.

The euro has also traded weaker after the European Commission’s forecast reflected low expectations for the kind of fiscal stimulus that many, including the European Central Bank and International Monetary Fund, say is needed to revive the eurozone economy.

In the latest growth estimates; EU Commission lowers the Eurozone area growth forecast to 1.1% from 1.2% in 2019 and 2020 growth to 1.2% from 1.4%.

In the upcoming week, we will closely watch the US CPI inflation figures on Wednesday, which should lend further support to the notion that inflation has returned to the Fed’s target.

Consumer prices are expected to have risen 0.3% last month and 1.7% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to stay at 2.4% on a year-over-year basis.

Besides the inflation data, Investors will focus Fed Chair Powell's Testify on the economy before the Joint Economic Committee, in Washington DC.

US Retail Sales figures will also be closely watched this week. The Commerce Department will report September retail sales numbers on Friday. Economists predict that retail sales rose by 0.2% last month. On the other hand, Core retail sales, which exclude autos, are expected to have risen by 0.4%. A higher than expected reading should be taken as positive for the greenback.

If we look at Eurozone Area; watch out for the Consumer Price Index. On the year-on-year basis, the Eurozone CPI is expected to stay at 0.7%.

The EURUSD pair extended losses below the major level of 1.1052 last Friday. If the downward movement continues below 1.1052, we will see 1.0007 and 1.0965 as support levels. On the upside, if the pair goes beyond 1.1052, the next resistance level will be at 1.1114.

Support : 1.1007 - 1.0965 - 1.0930

Resistance : 1.1052 - 1.1114 - 1.1165

GBP/USD:

The Bank of England left the bank rate unchanged at 0.75% last Thursday, as expected. However, the BoE adopted a more dovish outlook about the possible need for interest rate cuts, given the weakening of global growth this year and the hit to domestic growth from the prolonged uncertainty over Brexit. That uncertainty is set to extend well into next year by the general election on Dec. 12.

In the upcoming week, the UK CPI Inflation will be an important release for the Sterling. The UK CPI inflation is expected to ease to 1.6% from 1.7% year-on-year.

Moreover, the UK Retail Sales will be published on Tuesday. UK Core Retail Sales excluding auto and gas are expected to rise to 3.5% y-o-y from 3.0% growth in the previous number. A higher than expected reading should be taken as positive for the Sterling.

The GBPUSD pair showed a downward movement and dropped to the 1.2768 daily support level. If the price stays above 1.2768 on a daily basis, the fall may pause and we will see the resistance level at 1.2838 again. On the downside, if the pair drops below 1.2768, we will face the support level at 1.2671

Support : 1.2768 - 1.2671 -1.2572

Resistance: 1.2838 - 1.2947 - 1.3046

USD/JPY:

The USDJPY pair closed last week above the 109.09 daily support level. In the event that the rise continues, we will face 109.39 and 109.72 as the resistance levels. On the other hand, if the pair drops below 109.09, we will see the next support level at 108.79

Support : 108.79 - 108.52 - 108.14 

Resistance: 109.09 - 109.39 - 108.52

GOLD:

The Gold price found sellers from the 1492 daily resistance level with the latest trade news. China's Commerce Ministry said US and China have agreed to cancel existing tariffs in different phases.

In the event that the downward movement continues, we will follow 1453 and 1440 as the main support levels. On the other hand, if the price rises above 1466, the next resistance level is holding at 1509.

Support:  1453 - 1440

Resistance: 1466 - 1509 - 1524

10 Nov 19 (Sun)

05:22 pm


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