Key Events for The Coming week
On Monday, October 5, markets
await the Eurozone and the UK’s final composite PMI numbers for September, the
Eurozone retail sales numbers of August, the US non-manufacturing ISM figures
of September, and Fed members Evans and Bostic speeches.
On Tuesday, October 6,
investors will follow the RBA interest rate decision, the ECB president
Lagarde’s speeches, the US balance of trade with the Fed chair Powell speech.
On Wednesday, October 7,
markets will tune in the ECB president Lagarde’s speech, Fed members Barkin,
Williams, and Kashkari’s speeches and will find out about the change in the US
oil inventories and the latest Fed’s meeting discussions from the Fed minutes.
On Thursday, October 8,
eyes will be on Switzerland’s unemployment rate, the BoE FPC statement, the ECB
Monetary policy meeting accounts, and the US initial jobless claims.
On Friday, October 9,
traders will know about the Chinese final composite PMI numbers, the UK GDP Q3,
Canadian unemployment numbers and the US wholesale inventories read of August.
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US Dollar Index Daily Price Chart ( May 29 – October 4, 2020 )
Chart Source: Webtrader, Capex.com
On September 21, the Dollar index
traded above the neckline of the inverted head and shoulders pattern and closed
above the 50-day moving average eyeing a test of 95.24. However, the price
reversed last week to the lower 94.04- 91.78 trading zone reflecting a weaker
bullish sentiment.
A daily close above the high
end of the zone ie, above 94.04 could send the price towards the monthly resistance level at 95.24 (August 2016 low).
On the other hand, a daily
close below the 50-day moving average signals even weaker bullish momentum and
could send the price towards the low end of the current trading zone at 91.78.
US Dollar Index Four Hour Price Chart ( September 21- October 4, 2020 )
Chart Source: Webtrader, Capex.com
On September 30, the US
dollar index broke below the higher line on the bullish trendlines fan and
started a downward trend creating lower highs with lower lows. Currently, the
price eyes a test of the lower line on the same fan.
To conclude, while the bullish bais still intact a break below the neckline of the inverted head and shoulders pattern could start a sideways move pointing the price towards the low end of the current trading zone discussed above on the daily chart at 91.78. Hence, a break below 93.54 could send the market towards 92.73, while a break above 94.32 may cause a rally towards 95.24