Plan your strategies for the trading week ahead with key insights from our team.
It’s been a busy week for euro traders. Markets were hoping the European Central Bank would provide a clear message on the terms and future of its current asset purchases programme ending in March 2017.
While ECB President Mario Draghi didn’t clear up speculation, he did hint at more stimulus. On the back of this, traders saw opportunities to further short the euro for a third week of losses against the US dollar.
Selling pressure on the euro is expected to remain in place until the next ECB meeting in December, when the ECB committee will announce their update on economic forecasts.
Looking at major macro events on the agenda next week, traders will be watching the PMI figures due on Monday, across Japan, Europe and the US.
Traders are hoping the yen can find a short-term direction ahead of Friday’s inflation figures. The USDJPY is looking for a breakout either side, depending on how bad the inflation data comes in.
On Wednesday, the Australian quarterly inflation will be in focus, which makes AUDUSD an interesting FX pair to watch.
Finally in the US, core durable goods orders are expected to remain in line with last month with a stable 0.2% increase on a monthly basis. The US dollar could be subject to two-sided volatility ahead of the FOMC week and the US election. Traders should take into account higher event risk in the US dollar for the month ahead.