Macro focus

During the upcoming trading week traders and investors look to the second US Presidential debate, and a key European Council Meeting concerning the terms of the United Kingdom leaving the EU. The Presidential debate is set to take place towards the end of the trading week, and comes at a time when Presidential candidate Biden is said to be leading in the election polls. The EU Council Meeting is also expected to drive volatility in sterling and the FTSE100 , as Brexit negotiations reach a critical moment.

Other highlights on the economic calendar this week include the Australian monthly jobs figures, US Inflation and Retail Sales numbers, and Jobs data from the United Kingdom economy.

Monday 12th October, UK BOE Governor Bailey Speech

The Bank of England Governor, Andrew Bailey, is set to deliver a scheduled speech to market participants, at a time when the central bank is considering negative interest rates and further monetary stimulus. Governor Bailey took office on March 16th, 2020, at the end of former Bank of England Governor, Mark Carney’s term. Bailey was serving as the Chief Executive of the Financial Conduct Authority before becoming the Bank of England Governor.

• The GBPUSD pair is only bullish while trading above the 1.3000 level, key resistance is found at the 1.3140 and 1.3280 levels.
• If the GBPUSD pair moves below the 1.3000 level, sellers may test towards the 1.2900 and 1.2840 levels.

Tuesday 13th October, UK Claimant Change

The UK Claimant Change is released by the National Statistics, and measures the change in the number of unemployed people in the United Kingdom during the reported period. This figure is not an unemployment indicator, it simply measures the number of people claiming benefits. Most analysts are expecting a high Claimant number, due to the effects of the coronavirus lockdown is having on the UK economy.

• The GBPJPY pair is only bearish while trading below the 136.40 level, key technical support is found at the 135.80 and 134.00 levels.
• If the GBPJPY pair trades above the 136.00 level, buyers will likely test towards the 139.10 and 140.00 levels.

Wednesday 14th October, US Producer Price Index

The Producer Price Index is released by the Bureau of Labor statistics, which measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed by market participants as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive for the US dollar, whereas a low reading is seen as negative for the US dollar.

• The EURUSD pair is only bearish while trading below the 1.1770 level, further losses towards the 1.1730 and 1.1660 levels remain likely.
• If the EURUSD pair trades above the 1.1770 level, buyers may test towards the 1.1870 and 1.1940 resistance levels.

Thursday 15th October, US Initial Jobless Claims

US Initial Jobless Claims is released by the US Department of Labor on a weekly basis, and is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This figure measures the strength in the United States labor market, and is closely followed by both traders and investors.

• The USDCAD pair is only bearish while trading below the 1.3200 level, key support is found at the 1.3110 and 1.3000 levels.
• If the USDCAD pair moves above the 1.3200 level, buyers will likely test towards the 1.3320 and 1.3410 resistance levels.

Friday 16th October, US Comsumer Sentiment

The Michigan Consumer Sentiment Index released by the University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money. Generally speaking, a high reading anticipates positive for the US dollar currency, while a low reading is seen as negative for the US dollar currency.

• The USDCHF pair is only bearish while trading below the 0.9160 level, key support is found at the 0.9060 and 0.8980 levels.
• If the USDCHF pair trades above the 0.9160 level, buyers may test towards the 0.9240 and 0.9300 resistance levels.