On the lookout:
The week ahead starts off with a light economic calendar for today. New Zealand kicks off earlier today with Services PMI for September which climbed to 50.7 from an upward revised 47.7 (from 47.1).
Japan follows with its Final August Industrial Production (m/m f/c 0% from -1.8%; y/y f/c -3.8% from -2.3% – ACY Finlogix), and Japanese August Capacity Utilisation (m/m f/c -0.8% from -2.2% – ACY Finlogix).
Germany starts off Europe with its September Wholesale Prices (m/m f/c 0.1% from 0.2%; y/y f/c -4.2% from -3.8% – ACY Finlogix). Italy follows with its September Final Inflation Rate (m/m f/c 0.2% from 0.3%; y/y f/c 5.3% from 5.4% – ACY Finlogix).
The Eurozone releases its August Balance of Trade (f/c +EUR 12.5 billion from +EUR 6.5 billion – ACY Finlogix). Canada starts off North America with its August Wholesale Sales (m/m f/c 2.6% from 0.2% – ACY Finlogix), Canada’s August Manufacturing Sales (m/m f/c 1% from 1.6% – ACY Finlogix).
Finally the US releases its October New York Empire State Manufacturing PMI (f/c -7 from 1.9 – ACY Finlogix).
Trading perspective:
Risk aversion will continue to dominate sentiment in Asia today on the Israel-Hamas war.
Economic data releases pick up mid-week with the US Retail Sales report. China releases its trio of Retail Sales, GDP, Industrial Production and Fixed Asset Investment on Wednesday.
The focus remains on the Middle East today. Expect volatiliy to remain elevated and ranges to stay wide in FX.
Keep those tin helmets handy as we head into another riveting week in FX land.
AUD/USD – The Aussie kicks off this morning with an offered tone. On the day, look for immediate support at 0.6285 followed by 0.6255 and 0.6225. On the topside, immediate resistance can be found at 0.6335 (overnight high) and 0.6365. Look for more choppy trade in this currency pair, likely between 0.6280-0.6380. Would be wary of getting short under 0.6285 for now. Trade the range.
USD/JPY – The Dollar eased against the Yen as haven flows supported the Japanese currency. On the day look for immediate support at 149.40 (overnight low traded was 149.43). The next support level lies at 149.10 followed by 148.80. Immediate resistance can be found at 149.80 (overnight high traded was 149.83). The next resistance is found at 150.10. Look for a likely range today between 148.80 and 149.80 today. Prefer to sell USD/JPY rallies in the current environment.
EUR/USD – The Euro slid toward the lower end of its recent range, closing at 1.0510 against Friday’s 1.0530. On the day immediate support lies at 1.0500 followed by 1.0470. Immediate resistance can be found at 1.0540, 1.0570 and 1.0600. Look for more choppy trade in this currency pair, likely between 1.0480-1.0580. Trade the range, preference is to buy Euro dips.
GBP/USD – Sterling edged lower against the broadly based firmer US Dollar to 1.2120 from 1.2177 Friday. Look for immediate support at 1.2100 followed by 1.2070. On the topside, immediate resistance can be found at 1.2150 (overnight high traded was 1.2142). The next resistance level can be found at 1.2180 followed by 1.2210. Look for another choppy trading day in this currency pair, likely between 1.2080-1.2180. Trade the range.
