Last week’s Forex market showed the strongest rise of the Australian dollar and the fall of the Canadian dollar.
There are also warning signs of a slowdown in retail sales in several economic sectors. However, the U.S. stock index, the S&P 500, ended the week at an all-time high price, having broken a strong resistance level. **S&P500 chart. The growth was boosted by signals from the U.S. administration that the resolution of the U.S.-China trade dispute is moving closer towards positive resolution.
The economic calendar doesn’t contain a lot of significant events this coming week, just a couple of publications. After the weaker than expected ISM Manufacturing survey, the main focus will be on the ISM Non-Manufacturing data.
The Australian dollar showed quite a good growth last week, testing the 0.69 mark and 61.8% Fibonacci level from the most recent bearish movement. At this point, it looks like it’s trying to breach it, but we expect a possible short-term pullback before the price reaches 0.71 level. Moreover, it’s important to remember that this pair is quite sensitive to the U.S-China trade events. So, we remain long-term bullish on this pair, setting a buy stop at 0.70.
GBP/USD gained almost 1% last week, ignoring most of the losses seen a week earlier. The pound enjoyed a great October, having shown the gain above 5.0%. Traders can expect the volatility to continue: U.K. Parliamentary election short campaign will have a huge impact on what happens with Brexit.
No surprises are expected from the BoE at the upcoming policy meeting this week. The BOE is supposed to maintain its benchmark rate at 0.75%. The Cayman indicator shows that the pair is oversold despite the fact it has been growing for the entire past month.
To sum up, here are our targets for:
S&P500 – sell up to 2970
AUDUSD – set a buy stop at 0,70
GBPUSD – buy up to 1.32 and set a sell limit there
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