Weekly Forex Outlook: October 15-19

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Will the USD recover?

Again the US dollar index couldn’t break above 95.70. A new week will bring a lot of important economic events for the USD. If the USD finds support in the economic data, it will be able to test the resistance again. Otherwise, the index will fall below supports at 94.45, 94.05. A break below 94.05 will provoke a plunge to 93.40.

How will the USD affect other currencies?

The EUR/USD pair was trying to recover after the significant fall. However, Italy budget issue still weights on the European currency. The weakness of the USD will let the pair to try again. To keep rising the pair need to gain a foothold above 1.1627. The next key level is at 1.1710. However, if there is negative news for the currency. The plunge below an important level of 1.1530 will be likely.

What about the USD/CAD pair?

The pair keeps trading within the downward longterm channel. If the USD is weak and the Canadian data are supportive, the pair may fall below the support at 1.2985. It will provoke a further fall to 1.29. If the USD recover, we can anticipate a rise above the resistance at 1.3068.

Let’s have a look at the events that will affect market moves.

On Tuesday, we will get economic data for the British pound, New Zealand dollar and Australian dollar. Average Earnings Index will affect the British pound. CPI data will become one of the crucial drivers for the New Zealand dollar. Monetary Policy Meeting Minutes may give clues on the future direction of the aussie.

On Wednesday, traders will pay attention to the British CPI data and American meeting minutes.

Thursday will give traders opportunities to trade on the Australian jobs data and British retail sales data. Moreover, the European Economic Summit will take place on that day. It will cover a range of global economic issues, including Brexit, and the economy. Be ready for a high volatility on markets!

Friday data will affect the direction of the Canadian dollar. CPI and Core Retail Sales figures will define the direction of the currency.