Euro & EuroZone News

Both the Swiss National Bank and US Federal Reserve decided to keep their rates unchanged at -0.5 percent and less than 0.25 percent, respectively. There is speculation that the SNB might consider higher negative deposit rates if the Swiss franc continues to strengthen. In the Fed’s case, banks and analysts are divided in terms of the timing of the first rate hike, with some now thinking that it will come later rather than sooner.

In the United Kingdom, the MPC Asset Purchase Facility and Official Bank Rate votes came in just as widely expected: both at 0-0-9 (on hold). The Unemployment Rate stood at ticked back to 5.7 percent in January, while Claimant Count Change came in close to forecast in February at -31,000.

In Canada, Foreign Securities Purchases surprisingly surged in January to CAD5.73 billion. Manufacturing Sales slipped 1.7 percent, while the Wholesale Sales came in much weaker at -3.1 percent. Retail Sales, both main and core, declined for the second straight month. On the other hand, PPI’s main and core readings were both higher than expected.

In the United States, Unemployment Claims rose by 291,000 in the previous week, which was not far from the 295,000 forecast. Philly Fed Manufacturing Index increased 5.0 in March, compared to a 7.2 forecast. Current Account deficit widened to $113 billion during the fourth quarter of 2014.

Commodities

Gold headed to the latest lows during the start of the week. But it managed to recover on Wednesday and made a strong U-turn to close the week higher. The next immediate resistance is right at the $1,200 level.

Oil is currently posting a potential double bottom for 2015 in the daily chart. Price touched a $44 low on Wednesday but the day closed much better. It would be interesting to see if the $40-$45 area will hold for the coming weeks and months.

Currency Pairs

EURUSD showed a similar positive tone seen in oil on Wednesday and shared the same positive weekly ending. EURUSD bulls need to push through 1.1000 and 1.1500 to gain traction in their campaign to prevent further deterioration in price.

USD weakness prevailed this week and gave USDJPY its first weekly loss in five weeks. Buyers are expected to prevent further takedowns at 118 and 116. Monitor closely how 120 will react this week.

Like EURUSD, GBPUSD showed a spike on Wednesday which helped advance the price action in Cable. However, the week closed below 1.5000, so the aim for this week is to get a weekly close 1.5000 and get closer to 1.5500.

The Week Ahead

Monday will be very quiet, with only a few economic events, such as UK CBI Industrial Order Expectations; ECB Draghi’s speech; US Existing Home Sales.

Tuesday will be more hectic with China, Japan, Germany, US, Euro-area, and France Flash Manufacturing PMI; Germany, Euro-area, and France Flash Services PMI; UK CPI, PPI Input, RPI; US CPI and New Home Sales.

Wednesday’s action will start very early with New Zealand’s Trade Balance, followed by RBA’s Financial Stability Review; Germany’s Ifo Business Climate; UK BBA Mortgage Approvals; and US Durable Goods.

Thursday’s activity will start in the European session with Germany’s Gfk Consumer Climate; UK Retail Sales, FPC Statement, and CBI Realized Sales; and US Jobless Claims.

On Friday, we will witness the release of Japan’s Tokyo and National Core CPI, Household Spending, Jobless Rate, and Retail Sales; BOE Governor Carney’s speech; and US Final GDP and the revised reading of University of Michigan’s Consumer Sentiment.

The Reserve Bank of New Zealand declared on Thursday that it is putting its Official Cash Rate on hold at 3.50 percent, with the view the current financial conditions around the world remains “very accommodative”.

Meanwhile, it was a mixed bag, but largely bearish week for China. Industrial Production, Fixed Assets Investment, Retail Sales all came in weaker than forecast. February CPI rebounds to 1 percent after previously posting the lone sub-1 percent reading in six months. PPI was much weaker at -4.8 percent. China New Loans was well above forecast in February (CNY1,020 billion), while, Money Supply improved by 12.5 percent.

The jobs data for Canada was mixed. Employment Change and Jobless Rate were -1,000 and 6.8 percent, while that for Australia was 15,600 and 6.3 percent, respectively.

In the United States, Unemployment Claims rose by 289,000 in the previous week, compared to the 306,000 forecast. Retail Sales, both main and core, declined for the third straight month. On the other hand, PPI fell for the fourth straight month in February, while its core reading slipped for the second consecutive month.

Commodities

Gold’s move this week was milder in context of the decline seen in Oil. More buyers participated to halt a strong move toward the $1140 area. Nevertheless, there is more downside pressure now as price lingers below the $1,200 level as Gold is moving off a sharp decline in the prior week.

Oil sellers showed no mercy as they pushed price $6 down to a weekly close below $45. Buyers need to take action next week, otherwise we would see a new low, probably $30 to $35 in the next two or three weeks.

Currency Pairs

EURUSD sellers replicated the move they’ve done last week and sank the pair over 400 pips this time. There is still no sign of a significant bounce. Although traders should remain cautious of one, they should continue following the trend.

USDJPY made an early attack on the upside but struggled to hold on to gains for most of the week. The sky remains open to bulls, hence a target of 125-130 remains a possibility.

Like EURUSD, GBPUSD also improved upon its losses of the prior week. The pair stretched further down by over 400 pips, reaching lows unseen since June 2010. Traders can wait for selling opportunities around 1.4800-1.4900.

The Week Ahead

This week, Monday will have New Zealand’s Westpac Consumer Sentiment; Australia’s New Motor Vehicle Sales; Switzerland’s CPI and Retail Sales; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index, Capacity Utilization Rate, Industrial Production, TIC Long-term Purchases , and finally US NAHB Housing Market index. ECB’s Draghi is due to speak later that day.

On Tuesday, Australia’s central bank will reveal its Policy Meeting Minutes and Statement, followed by the BOJ Press Conference. In the afternoon, there will be Euro-area and Germany’s ZEW Economic Sentiment; Canada’s Manufacturing Sales; and US Housing Starts and Building Permits.

Wednesday will have New Zealand’s Current Account; Japan’s Trade Balance; UK Unemployment Rate, Claimant Count Change, Annual Budget Release, and MPC Asset Purchase and Official Bank Rate votes; Canada’s Wholesale Sales; US FOMC Statement, Economic Projections, Rate Announcement, and Press Conference.

Thursday’s action will start early with New Zealand’s GDP report. This will be followed later by Switzerland’s SNB Libor Rate Announcement and Monetary Policy Assessment; Targeted LTRO; EU Economic Summit; US Current Account, Jobless Claims, and Philly Fed Manufacturing Index.

Finally, on Friday, we will witness the release of BOJ Policy Meeting Minutes; Euro-area Current Account; UK Public Sector Net Borrowing; Canada’s CPI and Retail Sales. FOMC’s Lockhart is also expected to give a speech today.

Just like last year, the month of March started with a very busy week, particularly with the release of central bank rate decisions, strong Aussie data, and broadly positive data from the US.

Four central banks – the Bank of England, European Central Bank, Reserve bank of Australia, and Bank of Canada – made the decision to leave their respective rates unchanged (0.50 percent, 0.05 percent, 2.25 percent, and 0.75 percent, respectively). The Reserve Bank of Australia maintained this rate amid strong economic data.

Australia’s Building Approvals surged in January, rising 7.9 percent following a revised-higher 2.8 percent decline in the previous month. Analysts expected another decline that month. GDP just missed its 0.7 percent forecast and came in at 0.5 percent. Retail Sales came in as expected (0.4 percent), while Trade Balance came close to expectations, -AUD0.98 billion. Current Account improved during the December quarter, -AUD9.6 billion.

In the United States, Unemployment Claims rose by 320,000 in the previous week, compared to the 293,000 forecast. Non-Farm Employment Change surged, 295,000 versus 240,000 forecast. The Jobless Rate also improved to 5.5 percent. Meanwhile, the February ISM Manufacturing PMI eased to 52.9 in February.

Commodities

Gold’s $37 drop on Friday pushed yellow gold down easily by a $60 total through $1,200. The November 2014 lows now beckons and we could well see that get broken if price would be able to hold on to current losses.

Oil tried to spike higher this week, but overall price remained tied close to the $50. This is a worrying sign for bulls. They should try to take control and launch an attack toward $55 this week if possible.

Currency Pairs

EURUSD slid further this week, putting the pair into fresh negative territory. EURUSD sold 400 pips lower, breaking through 1.1000 for the first time since October 2003. The pair is now in a very steep downtrend; we could see a marginal bounce before heading to much deeper territory. 1.00 is on track.

USDJPY is now approaching the December 2014 mega highs as strong US jobs data boost this pair into the skies. We could see 125-130 in the near future.

The losses seen on GBPUSD was not far behind that of EURUSD’s. Nearly 400 pips was pulverized and the pair is now challenging the 2015 lows right smack at 1.4950. Further EURUSD weakness could send this pair into another downspiral. 1.4800 is the last main support ahead of fresh territories.

The Week Ahead

Starting March 8, Canada and the United States will implement the Daylight Savings time shift and clocks will move forward by 1 hour.

This time around, Monday will have a sparse amount of critical news releases, such as Japan’s Current Account and Final GDP; Australia’s ANZ Job Ads; Germany’s Trade Balance; and Eurogroup Meetings.

Tuesday will have Australia’s NAB Business Confidence; France and Italy’s Industrial Production; Switzerland’s Jobless Rate; China’s CPI and PPI; US JOLTS Job Openings; and ECOFIN meetings.

Wednesday will be busy with news like Australia’s Westpac Consumer Sentiment and Home Loans; Japan’s Core Machinery Orders; China’s Industrial Production, New Loans, Retail Sales, and Fixed Asset Investment; UK Manufacturing Production; and ECB Draghi’s speech.

Thursday’s action will start very early with New Zealand’s Interest Rate Announcement, Statement, and Press Conference. This will be followed by Japan’s BSI Manufacturing Index; Australia’s jobs data and MI Inflation Expectations; Eurozone Industrial Production; UK Trade Balance; Canada’s NHPI; US Retail Sales and Jobless Claims.

Finally, Friday will be brief. There will be NZ’s Business NZ Manufacturing Index; Canada’s Employment data; US PPI and Preliminary University of Michigan Consumer Sentiment.

The Australian Bureau of Statistic reported that Employment Change in January suffered a bigger loss in jobs, -12,200 compared to only its expectation for -4,700. On the bright side, the reading for December was revised higher, from 37,400 to 42,300. The Participation rate was steady at 64.7 percent. Unemployment rate ticked up to 6.4 percent, the highest level since August 2002. South Australia’s jobless rate of 7.3 percent led the employment weakness (other states with higher jobless rate include NSW, Queensland, and Victoria; unchanged in Tasmania).

German Trade Balance was much better at EUR21.8 billion in December, the latest figures from Destatis show. Meanwhile, Prelim Gross Domestic Product increased 0.7 percent during the fourth quarter of 2014, a considerable increase which is the second strongest increase in the last six quarters.

In the United States, Retail Sales’ headline and core reading were both weaker in January (-0.8 percent and -0.9 percent, respectively) despite the decline in gas prices to its lowest level since 2009. Meanwhile, the latest report from the Department of Labor showed that there was an increase in Americans who filed for unemployment claims last week. Jobless Claims was 304,000, that’s 22,000 higher than the median forecast.

Commodities

Near-term support at $1,200 held this week amid very narrow range trading that happened. The fact that price failed to reach $1,200 despite low volatility is a good indication of strength, so bulls must keep the pressure so they can push price back toward $1,300 in the short term.

Volatility remains but Oil did not reach a new high. Price stayed within the prior week’s range and the $50 support is holding so far. There is still a very long uphill climb before bulls can get confident of the situation. $50 to $60 would remain critical for both sides.

Currency Pairs

EURUSD is showing some signs that it might take a break from the weakness that’s been plaguing the pair since late 2014. Although minor, the three consecutive bullish weeks are an indication that price might attempt further advances in the near term. 1.16 remains as a critical area for now.

USDJPY reached a new weekly high but sellers right near the top greeted bulls on Thursday and Friday. The good news is that there is a relatively thick layer of support around 118 and more just below, and this could aid bulls in their quest for 120.

Again, GBPUSD did better than EURUSD this week as the former has made considerable upstrides in the last three weeks. Bulls must target a break of the 1.5650-1.5700 area in the next 5-15 days to keep the momentum on their side.

The Week Ahead

Monday will be light on news activity. The lineup includes New Zealand’s Retail Sales; UK Rightmove HPI; Japan’s Prelim GDP; Australia’s New Motor Vehicle Sales; and Eurogroup meetings. The US will observe Presidents’ Day today.

Tuesday will have Australia’s Monetary Policy Meeting Minutes; UK CPI, RPI, HPI, and PPI Output; Eurozone and German ZEW Economic Sentiment; ECOFIN meetings; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index, Mortgage Delinquencies, and NAHB Housing Market Index; and New Zealand’s GDT Price Index.

Wednesday will start with Japan’s Monetary Policy Statement and BOJ presscon; UK Average earnings Index, Claimant Count Change, Jobless Rate, and MPC Official Bank Rate and Asset Purchase Facility Votes; Canada’s Wholesale Sales; US Building Permits, PPI, Housing Starts, Capacity Utilization Rate, and FOMC Meeting Minutes.

Thursday will be quiet except for Japan’s Trade Balance; Switzerland’s Industrial Order Expectations; ECB Monetary Policy Meeting Accounts; US Jobless Claims and Philly Fed Manufacturing Index.

Finally, on Friday, activity will pick up a bit with Flash Manufacturing PMI and Flash Services PMI from France, Germany, and the Eurozone; UK Retail Sales and Public Sector Net Borrowing; Canada Retail Sales; and US Flash Manufacturing PMI.

The Swiss National Bank surprised the market as it decided to remove the EURCHF cap for the first time in over three years. Funds and brokers were caught on the wrong side of the market, causing some of them to shut down due to bankruptcy. FXCM, the largest US retail FX broker, suffered massive capital hit but Leucadia National came in to its rescue with capital infusion. The market carnage is still fresh, so it may take time before the dust settles. The SNB also slashed Libor rate to negative 0.75 percent from negative 0.25 percent.
In terms of PMI data, the US and UK posted weak readings. UK Construction PMI was slightly weaker at 57.6 while Services PMI was much weaker at 55.8. Meanwhile, US ISM Non-Manufacturing PMI was weak at 56.2 Canada led the pack with a better-than-expected Ivey PMI of 55.4.

In the United States, the latest report from the Department of Labor showed the Jobless Claims for the prior week rose to 316,000, the highest reading since the early part of September. Empire State Manufacturing Index advanced to 10.0 this January, after suffering a -3.6 reading in December. Meanwhile, Philly Fed Manufacturing Index plunged to 6.2, its lowest level since February.

Commodities

Gold pushed northward further this week with close to $65 advance, putting it close to the $1,300 even more. Tougher resistance is found around $1,350. We may have just seen the bulls set the tone for the entire month.

Finally, we have seen some respite for bulls as Oil has closed virtually unchanged this week following a drop to as low as $44. Buyers should take advantage of this situation by pushing price toward $55-$60 as soon as possible.

Currency Pairs

EURUSD declined for the sixth straight week on the back of the removal of the EURCHF cap. The pair dropped a little over 400 pips and it is slowly closing in on the 1.1000 level. Buyers need to bring price back toward 1.2000.

USDJPY eased again this week as buyers failed to take out the 118 level for the second week. Further selling could pull this pair toward 114-115 in the next 1-3 weeks.

GBPUSD declined for six straight weeks as well. However, unlike EURUSD, Cable put up an inside bar this week and closed in the mid-1.51s. With Dollar strength intact, this pair is still on its way to ward 1.48 to 1.50.

The Week Ahead

Monday will be very quiet except for a few news releases, particularly Australia’s New Motor Vehicle Sales; Switzerland’s PPI; Germany’s Bundesbank Monthly Report; and Canada’s Foreign Securities Purchases. The US will be on holiday to celebrate Martin Luther King Day.

Tuesday will start early with New Zealand’s NZIER Business Confidence; China’s GDP, Fixed Asset Investment, Industrial Production, and NBS Press Con; Germany’s ZEW Economic Sentiment; US NAHB Housing Market Index; and Canada’s Manufacturing Sales.

Wednesday will start early again with New Zealand’s CPI; Australia’s Westpac Consumer Sentiment; BOJ’s Monetary Policy Statement and Press Con; UK Claimant Count Change, Unemployment Rate, Average Earnings Index, MPC Asset Purchase Facility and Official Bank Rate Votes. This will be followed by Canada’s Wholesale Sales, Bank of Canada Overnight Rate Announcement, Rate Statement, Press Conference, and Monetary Policy Report; and US Housing Starts and Building Permits. Today is also day 1 of the 4-day World Economic Forum annual meetings

Thursday will be just as busy with Business NZ Manufacturing Index; Australia’s MI inflation Expectations; Spain’s Unemployment Rate; UK Public Sector Net Borrowing and CBI Industrial Order Expectations; ECB Rate Announcement and Press Con; US Jobless Claims.

Friday will still be active with China’s HSBC Flash Manufacturing PMI; Euro-area, France, and Germany Flash Manufacturing PMI and Services PMI; UK and Canada Retail Sales; Canada CPI; US Flash Manufacturing PMI and Existing Home Sales.

On Sunday, Greece will hold its much-anticipated Parliamentary Election.

The Bank of England was the lone central bank active this week and announced an unchanged position in terms of interest rates. They left the Official Bank Rate at 0.50 percent. While the Asset Purchase Facility remained the same at GBP375 billion

In terms of PMI data, the US and UK posted weak readings. UK Construction PMI was slightly weaker at 57.6 while Services PMI was much weaker at 55.8. Meanwhile, US ISM Non-Manufacturing PMI was weak at 56.2 Canada led the pack with a better-than-expected Ivey PMI of 55.4.

In the United States, jobs outlook looks better with current published readings. December’s Non-Farm Employment Change was better than forecast at 252,000, while the Unemployment Rate improved a notch to 5.6 percent. Trade Balance deficit improved to an 11-month low, -$39 billion, thanks to lower crude oil prices. Meanwhile, the latest report from the Department of Labor showed the Jobless Claims rose to a slightly higher-than-expected 294,000 claims.

Commodities

Gold carved a bullish week to start the new year and it was a key milestone as it ended above the $1,200 level. The next area of resistance is the nearby $1,250 area ahead of $1,350. Another bullish week could set the tone for the entire month.

Oil has now printed its sixth weekly loss out of seven, and there seems to be no end in sight so far. A bearish weekly close below the $50 mark last week could spur this commodity to head for the $30 in short notice.

Currency Pairs

EURUSD posted its fourth weekly consecutive loss after buyers failed to secure the 1.2000 level. The weekly low at 1.1753 blasted through the multi-year low set on June 2010 at 1.1875 and this opens up the pair into further losses ahead.

USDJPY suffered its first considerable loss in the past four weeks after bulls encountered selling pressure at and above the key 120 level. We would likely see this back and forth movement in the next few weeks.

GBPUSD also carved its fourth consecutive weekly loss just like EURUSD. But unlike the latter, Cable has yet to break its own key level at 1.5000. Buyers should take this opportunity to swing price back toward 1.5500 so they can negate further bearish pressures.

The Week Ahead

Monday will be very quiet except for a few news releases, particularly Australia’s ANZ Job Ads and Home Loans; and Bank of Canada’s Business Outlook Survey. There will be a bank holiday in Japan due to ‘Coming of Age Day.’

Tuesday will produce more activity with Japan’s Current Account and Bank Lending; UK CPI, RPI, and PPI Input; China’s Trade Balance and New Loans; Italy’s Industrial Production; US JOLTS Job Openings and Federal Budget Balance.

Wednesday will be busy, starting with the European Justice Court Ruling on the legality of the European Stability Mechanism and Fiscal Compact. Other news will follow like Eurozone Industrial Production; US Retail Sales, Import Prices, and Business Inventories.

Thursday will have Japan’s Core Machinery Order; Australia’s Unemployment Rate and Employment Change; US PPI, Jobless Claims, Philly Fed Manufacturing Index, and Empire State Manufacturing Index.

Finally, Friday will cap the week with Japan’s Tertiary Industry Activity; Switzerland’s PPI; UK Retail Sales; Eurozone Final CPI; US CPI, Capacity Utilization Rate, Industrial Production, and Preliminary UoM Consumer Sentiment.

The Spanish National Statistics Institute announced a continued weakness in the country’s Flash Consumer Price Index. The December figure declined 1.1 percent, its sixth straight negative reading, and the biggest decline ever recorded since 2011.

Friday, January 2, was kept busy by data mostly out of Europe. Markit published a weaker than expected UK Manufacturing PMI, as the December figure decreased to 52.5, or the lowest reading in the last three months. The Bank of England reported that Net Lending to Individuals increased to GBP3.3 billion (the biggest in the last 4 months), while M4 Money Supply was flat for the second month in a row in November.

Meanwhile, in the United States, ISM reported that Non-Manufacturing PMI declined to 55.5, surprising analysts whose median forecast was 57.6. The December data is the lowest reading since June’s 55.3 reading. The latest report from the Department of Labor showed the Jobless Claims rose to 298,000, which was 11,000 higher than forecast. Chicago PMI came in much weaker than anticipated at 58.3.

Commodities

Gold continues to trade inside a tight range below the important $1,200 level, with one instance where price shot through toward $1210 fleetingly. We do not suggest taking any position right now; better wait for price to stabilize above $1,200.

Oil is poised to continue its bearish drop after sinking five out of the last six weeks. The $50 level would be critical and all eyes are on it right now. Unless we see certain signs, the $30-$40 area seems to be a definite possibility right now.

Currency Pairs

EURUSD completed its third bearish consecutive week previously and we could see a strong push below 1.2000 very soon. This will put the multi-year low set on June 2010 at 1.1875 in very critical danger.

USDJPY last traded in the 120s, close to the new multi-year high set on December at 121.83. We expect the 120-121 area to become a pivot in the coming weeks and months.

GBPUSD bears are roaring right now as they made a freefall move – as predicted – on the last day of December through the 1.5500 level. If that level is not revisited this coming week, we could see increased push toward 1.5100.

The Week Ahead

Monday will only have a few news announcements on the pipeline, namely Germany’s Preliminary CPI; Spain’s Unemployment Change; Switzerland’s SVME PMI; and UK Construction PMI. US FOMC Member William will give a speech in a Boston conference entitled “Housing, Unemployment, and Monetary Policy”.

Tuesday will open with Australia’s Trade Balance; China’s HSBC Services PMI; Services PMI from Spain, Italy, and the UK; UK BOE Credit Conditions Survey; Canada’s RMPI and IPPI; New Zealand’s GDT Price Index; and US ISM Non-Manufacturing PMI and Factory Orders.

Wednesday will be more active with Germany’s Retail Sales and Unemployment Change; Switzerland’s Foreign Currency Reserves; Eurozone CPI Flash Estimate and Jobless Rate; Canada Trade Balance and Ivey PMI; US ADP Non-Farm Employment Change, Trade Balance, and FOMC Meeting Minutes.

Thursday will begin with Australia’s Building Approvals; Eurozone Retail Sales and PPI; BOE Official Bank Rate and MPC Rate Statement; Canada’s NHPI; and US Jobless Claims.

Friday will be the highlight of the week, starting early with New Zealand’s Retail sales; China’s PPI and CPI; France’s Industrial Production; UK Manufacturing Production, Trade Balance, and Industrial Production; Canada’s Building Permits, Jobless Rate, and Employment Change; and US Jobless Rate, Non-Farm Payroll, and Average Hourly Earnings.

Switzerland’s pre-referendum projections were upheld as the Swiss voted to reject the Gold Initiative. The “Save our Swiss Gold” initiative was voted down, 73 percent (anti) to 23 percent (pro). The referendum, if passed, involved preventing gold sales, repatriating Swiss-owned gold and storing gold reserves within the country, and mandating that gold must make up at least 20% of the assets ($540 billion in total) held by the SNB.

In the United States, Jobless Claims rose 313,000 in the previous week, greater than the 287,000 projection. Prelim GDP gained 3.9 percent compared to its estimate of only 3.3 percent.

US CB Consumer Confidence declined to 88.7 in November after bouncing to 94.1 in October. Durable Goods Orders and Pending Home Sales dipped surprisingly, -0.9 percent and 458,000 respectively. Meanwhile, Chicago PMI, Revised UoM Consumer Sentiment, and New Home Sales all came in lower than forecast.

In other news, Statistics Canada said September Retail Sales advanced 0.8 percent while the core reading turned flat. Current account deficit was reduced by CAD1.5 billion to 8.4 billion during the third quarter. Gross Domestic Product came in as expected at 0.4 percent.

Commodities

Gold buyers had early trouble setting a strong pace above the $1,200 level. They tried but easily gave up, and this led to a subsequent three-day decline until Friday’s $27 drop. This gave gold its first weekly decline in four weeks. Continued weakness would spell trouble for the yellow metal.

Oil traders saw an $11 decline this week as the $70 level failed to give support to the ailing commodity. Since price is smashing through lower supports, we could see more volatility in the coming weeks. $50 to $60 could be the next critical area.

Currency Pairs

EURUSD managed to close the week higher despite the new multi-year low etched on Monday. The pair could see more consolidation in the same area, but bulls would need to push this higher so they can get out of this price glut. A move through 1.2700 would ease the bearish momentum.

USDJPY printed a weekly inside bar, breaking the five-week streak of higher weekly highs and lows. This could be the first sign of exhaustion in the current strong trend. Nevertheless, any downside moves is likely to be met by buyers. Watch 117-118.

GBPUSD closed the week unchanged as the pair encountered strong resistance above the 1.5800 level. Buyers need to make a second attempt to push through 1.5800. Some indicators are showing divergences, and this could aid the buyers in the coming weeks.

The Week Ahead

This Monday will be relatively packed with news throughout the day. It will begin with New Zealand’s Overseas Trade Index, succeeded by Australia’s Company Operating Profits; China’s Manufacturing PMI and HSBC Final Manufacturing PMI; Japan’s Capital Spending and Final Manufacturing PMI; Manufacturing PMI for Spain, Switzerland (SVME), Italy, UK, and the US. Fed members Dudley and Fischer will also give their respective speeches.

Tuesday will have Australia’s Building Approvals, Current Account, and RBA Rate Announcement and Statement; Japan’s Average Cash Earnings; Spain’s Unemployment Change; UK’s Construction PMI; New Zealand GDT Price Index; and US Fed Chair Yellen’s speech.

Wednesday will have Australia’s GDP; China’s Non-Manufacturing PMI and HSBC Services PMI; Spain, Italy, and UK Services PMI; Eurozone Retail Sales and Final Services PMI; UK Autumn Forecast Statement; Canada BOC Rate Announcement and Statement; US ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI and Beige Book.

Thursday will also be busy with Australia’s Retail Sales and Trade Balance; UK Halifax PMI, Official Bank Rate, Asset Purchase Facility, and MPC Rate Statement; ECB Rate Announcement, Statement, and Press Conference; US Jobless Claims; Canada’s Ivey PMI.

Friday will have a quiet Asian session, followed by gradual pickup in activity from then on. There will be Germany’s Factory Orders; Switzerland’s Foreign Currency Reserves; Canada’s Trade Balance, Employment Change, Jobless Rate, and Labor Productivity; US Non-Farm Employment Change, Trade Balance, Jobless Rate, Factory Orders, and Average Hourly Earnings.

ECB head Draghi’s speech created market frenzy on Friday that sent the Euro back close to the latest lows. At the 24th European Banking Congress, Draghi expressed concern about inflation, and said the ECB may entertain the idea of increasing its asset purchase to gain a higher inflation.

In the United States, the Federal Reserve Bank of Philadelphia reported that its Manufacturing Index soared to 40.8 this November, more than double its median estimate and the previous reading of 20.7. A reading this high was last seen on March 2011. Empire State Manufacturing Index, in contrast, advanced to 10.2, lower than expected.

Meanwhile, US Jobless Claims rose 291,000 in the previous week, while the prior week’s reading has been modified higher to 293,00 from the initial reading of 290,000. US PPI unexpectedly gained 0.2 percent in October, while CPI was flat. Industrial Production edged lower by 0.1 percent.

In other news, China’s HSBC Flash Manufacturing PMI went flat at 50 this November. Meanwhile, French, German, Eurozone Flash Manufacturing PMI were all weaker, while; corresponding Flash Services PMI were all weaker as well, except for France which slightly topped estimates. The US Flash Manufacturing PMI was also weak at 54.7 (versus 56.2 estimate).

Commodities

Slowly but surely, Gold has etched its third bullish weekly close. Price made a quick peek above $1200 this week but price closed the week just above this level. The next goal for buyers is a strong close above $1,250.

Oil saw a battle for control between buyers and sellers throughout the week but the former emerged as winners as they pulled a 2-day win streak to end the week in the mid-76s. We could see price linger around current rates, as price remains close to the key support around $67 to $70.

Currency Pairs

EURUSD was poised to end the week with a meager positive weekly close but Friday’s drop spoiled this eventuality. The pair sank nearly 200 pips on Friday to a 10-day low, putting the 1.2300 level back in the spotlight. Some indicators are flashing a bullish divergence, so if we don’t see a new low soon, price could swing back toward 1.2700.

Unlike the big smackdown seen in the previous week, GBPUSD was contented to trade within a tight 148-pip range this week. 1.5500 remains on track but we could see a bounce towards 1.5800-1.5900. 1.5588 is the low so far.

USDJPY has achieved five straight bullish weekly closes this week. Price momentum seems to have slowed since the start of November, but bulls remain undeterred. 118 and 120 are the likely key levels moving forward.

The Week Ahead

Asia will be quiet this Monday, particularly because Japan will be on holiday to celebrate Labor Thanksgiving Day. Europe will have Switzerland’s Employment Level and Germany’s Ifo Business Climate.

Tuesday will open up with BOJ’s Monetary Policy Meeting Minutes and BOJ Governor Kuroda’s speech, followed by New Zealand’s Inflation Expectations; UK’s BBA Mortgage Approvals, Inflation Report Hearings; Canada’s Retail Sales; US S&P/CS Composite-20 HPI, and CB Consumer Confidence.

Wednesday will have a lot of economic releases such as Australia’s Construction Work Done; UK’s Second Estimate GDP, Preliminary Business Investment, and CBI Realized Sales; US Durable Goods Orders, Jobless Claims, Core PCE Price Index; Personal Spending; Personal Income; Chicago PMI, New Home Sales, Pending Home Sales, and Revised UoM Consumer Sentiment.

Thursday will be busy but less active than Wednesday with New Zealand’s Trade Balance; Australia’s Private Capital Expenditure and HIA New Home Sales; Germany’s Preliminary CPI, Gfk Consumer Climate, and Unemployment Change; Eurozone Private Loans and M3 Money Supply; and Canada’s Current Account. US will celebrate Thanksgiving Day.

Friday will still be active with New Zealand’s Building Consents and ANZ Business Confidence; Japan’s Household Spending, Tokyo Core CPI, Retail Sales, Jobless Rate, and Preliminary Industrial Production; Australia’s Private Sector Credit; Germany’s Retail Sales; Switzerland’s KOF Economic Barometer; UK’s Nationwide HPI; Eurozone CPI Flash Estimate and Jobless Rate; and Canada’s GDP, IPPI, and RMPI.