October 14-18. UK week


Most of the news coming from the UK next week. On Tuesday, it will be data on unemployment and average wage changes for August, on Wednesday – the consumer price index for September, on Thursday – retail sales and the European Union summit on Brexit starts. In addition, the United States will receive information on retail sales for September. However, despite the importance of future reports, the main attention of traders will be focused on Brexit, on the EU summit and on any information from Boris Johnson, Donald Tusk, Jean Claude Juncker, Michel Barnier, Angela Merkel, Emmanuel Macron. It is these actors who most often speak out about the promotion of the Brexit negotiation process and have the greatest influence on it. Regarding the chances of fulfilling one or another Brexit option, traders are advised not to try to guess the future. Brexit has repeatedly shown to all market participants that trying to predict how everything will end is an ungrateful affair. The growth of the pound was often associated with “pure water” rumors and unfounded market expectations, which each time gave way to a stronger fall in the British currency. That is why the movement of the pound / dollar pair this week may well be illogical and consistent with the nature of the incoming news. Thus, next week, when trading the GBPUSD pair, special care must be taken. As for the EURUSD pair, one of the important events is the report on the change in industrial production in August on Monday, and the inflation report for September on Wednesday. The greatest interest, of course, will be caused by the consumer price index, which in recent months has fallen to absolute lows. A value below 1.0% will no longer be considered just low, but critical. And then it can be expected from the ECB and a new reduction in key rates, the quantitative stimulus program in the first months of its operation is unlikely to be changed, but it can be expanded in the future. And for the euro, these are all potential bearish factors. In confrontation with the dollar, the euro has very few trump cards. And the main factor behind the growth of the euro at the moment is simply the technical need to adjust from time to time. There is no positive news from the EU. In the USA, recently, not everything is good either, but America’s economy is still stronger, macroeconomic indicators are higher, monetary policy is tougher. It is these factors that continue to play for the dollar.