Streets of London, UK. Image source: Phil Fiddyment, flickr.com
Germany's Industrial Output Expected to Continue Faltering in October
The next five days will reveal whether the U.S. dollar's freefall will pick up from last week or the greenback will manage to recover. This will be the prime concern for FX traders, as the greenback's performance will also affect other currencies. Most importantly, traders would want to know whether the pound would continue to break fresh highs or the time for a new correction is now.
The most impactful releases this week will be the German services and manufacturing PMI numbers on Friday. They would reveal whether the global energy crisis has exacerbated the slump in German economic output.
Germany MoM Manufacturing PMI. Image source: TradingEconomics.com
According to the preliminary forecasts, German manufacturing is expected to continue shrinking below the dip that was recorded a month prior. Factory activity growth is expected to sink to 56.8 index points from September's 58.4. If realised, this would be the weakest reading since the beginning of the year.
As regards the services sector, the services PMI is forecasted to decline by 1.0 index points from the 56.2-point expansion that was recorded in September. The 55.2 index points that are projected for October would mark the weakest industrial expansion since May 2021.
Germany MoM Services PMI. Image source: TradingEconomics.com
Chinese GDP Growth Rate Projected to Decline by Nearly 3 per cent
During the Asian session on Monday morning, the National Bureau of Statistics of China (NBSC) is scheduled to publish the GDP growth numbers for the third quarter. The Chinese economy is expected to have grown by 5.0 per cent in the three months leading to September.
Despite the sizable increase, this would mark a 2.9 per cent decline in the pace of economic growth from the second quarter.
China QoQ GDP Growth Rate. Image source: TradingEconomics.com
The world's fastest-growing economy was not left unscathed by the global economic turmoil. The fact that China's manufacturing sector contracted for the first time since the beginning of the pandemic is demonstrative enough of the adverse impact of the global fallout on Chinese activity.
British Inflation Expected to Remain Unchanged in September
On Wednesday, the Office for National Statistics in the UK will post the latest Consumer Price Index (CPI) numbers. The market forecasts for September project no changes in headline inflation, which is thus expected to remain at 3.2 per cent.
These estimations are derived despite the solid growth in employment numbers that was observed over the same period and the sizable increase in consumer prices elsewhere.
UK MoM Inflation Rate. Image source: TradingEconomics.com
Given the significance of Germany's industry numbers and the UK's CPI data that are scheduled for release this week, the EURGBP pair is likely to register significant price swings over the next five days.
As can be seen on the 4H chart below, the price action is contained within the boundaries of a descending channel. This underpins the significant bearish bias that corresponds to the recent rally of the pound.
The strength of the underlying downtrend can also be inferred by the fact that the price action recently broke down below the previous swing low at 0.84500. The MACD indicator picked up on this resurgence of selling pressure.
Additionally, the price action keeps a perfect descending order with the three moving averages. It is concentrated below the 20-day MA (in red), which is positioned below the 50-day MA (in green), which, in turn, is positioned below the 100-day MA (in blue).
EURGBP 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
Other Prominent Events to Watch for:
Monday - China MoM Retail Sales; U.S. MoM Industrial Production; Canada MoM BOC Business Outlook Survey.
Tuesday - Australia RBA Monetary Policy Meeting Minutes; UK BOE Governor Bailey Speaks.
Wednesday - Canada MoM CPI; China PBOC Interest Rate Decision.
Thursday - EU European Council Meeting; UK MoM gFk Consumer Confidence; Japan MoM CPI.
Friday - UK MoM Retail Sales; France MoM Services and Manufacturing PMI; U.S. MoM Services and Manufacturing PMI; UK MoM Services and Manufacturing PMI.
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
