VOLATILITY LEVELS SET TO RISE DURING WEEK AHEAD
The EUR/USD price keeps falling on the background of US dollar strengthening. Data published today in the US on personal spending showed a 1% growth for September against the 0.8% forecast has strengthened the likelihood of more monetary policy tightening in the US. Investors are waiting for the FOMC statement due to be published this Wednesday. Also this week, US President Donald Trump is expected to announce the name of the next Fed chairman. Gerome Powell who is known for his hawkish views on monetary policy is one of the most favoured candidates to become the next governor of the central bank. At the same time, it is still possible that Janet Yellen will remain in her chair. Tomorrow the focus of investors will be on the unemployment rate, consumer price index and preliminary report on GDP growth in the Eurozone.
The USD/JPY is falling despite the strong positions of the greenback. There was little impact on the markets from the news on retail sales in Japan which grew by only 2.2% in September against the 2.3% expected. Traders are likely to be influenced by the data on household spending and unemployment change in Japan due at 23:30 GMT and preliminary industrial production at 23:50 GMT.
The British pound is rising on the background of an expected interest rate increase by the Bank of England on Thursday by 0.25% to 0.50%. Strong housing market data is also supporting the sterling as mortgage approvals came in at 66,000 thousand in September hitting analysts forecast on the mark. Volatility levels are likely to remain high during the week due to the large number of important economic events.
The EUR/USD price is consolidating near the 1.1620 level. The RSI approached the oversold zone which points to a possible price rebound with potential targets at 1.1650 and 1.1700. In case of the fall continuation, the target levels will be at 1.1550 and 1.1500. The MACD signal line on the 15-minute chart just crossed the zero level and that may stimulate the bears to push the price down further.
The GBP/USD price is correcting upwards within the limits of the descending channel. Soon the quotes may return to the important 1.3250 level and the upper limit of the channel. The RSI on the 15-minute chart hints at the current rising impulse exhaustion. The volatility is likely to remain high and the next objective in case of a fall will be at 1.3050.
The USD/JPY price has recently broken the inclined support line. In case of the price breaking through the closest low near 113.30, the fall may accelerate and the closest targets will in this case be at 113.00 and 111.70. Upward correction today is likely to be restrained by the resistance at 114.00. The amplitude of price fluctuations is likely to increase during the week.