US ELECTION RESULT SET TO GENERATE MAJOR MARKET VOLATILITY

During the upcoming trading week, traders and investors look to US Presidential result for direction, with the outcome set to generate significant market volatility across a broad spectrum of financial asset classes. Traders also have to contend with high-impacting central bank interest rate decisions from the Reserve Bank of Australia, the Federal Reserve, and the Bank of England this week. Economists are currently split as to whether the Reserve Bank of Australia will cut interest rates this week, as the nations economic activity continues to decline due to COVID-19.

The United States economic calendar is also jammed packed with top-tier data releases this week, as the world’s largest economy releases Manufacturing, Jobs, Services, Factory Orders, and Automobile Sale numbers.

Monday 2nd November, ISM Manufacturing Survey

The Institute for Supply Management (ISM) Manufacturing shows business conditions in the United States manufacturing sector. The ISM Manufacturing survey is a significant indicator of the overall economic condition in the US. A monthly ISM figure above 50 is seen as positive for the US dollar currency, whereas a below 50 reading is seen as negative for the US dollar currency.

  • The USDJPY pair is only bullish while trading above the 105.80 level, further upside towards the 106.40 and 108.00 resistance levels seems possible.
  • If the USDJPY pair trades below the 105.80 level, sellers are likely to test towards the 104.00 and 103.00 support levels.

Tuesday 3rd November, RBA Rate Decision

The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to keep interest rates on hold at this meeting, following recent rate cuts and an increase of COVID-19 infections. RBA policymakers are also tipped to strike an overall dovish tone towards the economy and monetary policy.

  • The AUDUSD pair is bearish while trading below the 0.7060 level, key support is found at the 0.6880 and 0.6735 levels.
  • If the AUDUSD pair moves above the 0.7060 level, buyers may test towards the 0.7180 and 0.7300 levels.

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Wednesday 4th November, UK Services PMI

The PMI service released by both the Chartered Institute of Purchasing Supply and Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.

  • The GBPUSD pair is only bullish while trading above the 1.3000 level, further upside towards the 1.3150 and 1.3300 resistance levels seems possible.
  • If the GBPUSD pair trades below the 1.3000 level, sellers are likely to test towards the 1.2650 and 1.2500 support levels.

Thursday 5th November, US Continuing Jobless Claims

US Continuing Jobless Claims is released by the United States Department of Labor measure the number of individuals who are unemployed and are currently receiving unemployment benefits. It presents the strength in the labour market. A rise in this indicator has negative implications for consumer spending which discourage economic growth. Due to the ongoing COVID-19 pandemic, the Continuing Jobless Claims number can be quite volatile on a weekly basis.

  • The EURUSD pair is only bullish while trading above the 1.1780 level, key resistance is found at the 1.1960 and 1.2200 levels.
  • If the EURUSD pair trades below the 1.1780 level, sellers may test towards the 1.1500 and 1.1340 levels.

Friday 6th November, Canadian Employment Change

The Canadian monthly employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this key job indicator has positive implications for consumer spending which stimulates economic growth. A high reading is often seen as positive for the Canadian dollar currency, while a low reading is seen as negative or for the Canadian dollar currency.

  • The USDCAD pair is only bullish while trading above the 1.3300 level, further upside towards the 1.3400 and 1.3540 resistance levels seems possible.
  • If the USDCAD pair trades below the 1.3300 level, sellers are likely to test towards the 1.3200 and 1.3100 support levels.


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