The British monthly GDP is announced on Friday at 09:00 MT time.
News to trade on October 18
- Yesterday in Brussels the EU leaders declined the plans for the November summit as not enough progress on Brexit was made. Despite the British Prime Minister Theresa May's arguments, the EU started to prepare for a "hard" or "no-deal" Brexit. As a result, the GBP fell.
Today's focus is again on the British currency. The level of retail sales fell by 0.8%. At the moment GBP/USD is testing the support at 1.3094 (100-day MA). If there is more positive news concerning Brexit, the GBP will be supported. In that case, the pair can move up to the resistance at 1.3146.
- The unemployment rate in Australia was released today. It fell to 5.0%. However, employment change published at the same time showed a lower-than-expected level of 5600 people in September. For now, AUD/USD is trading in the green zone. The next target resistance is at 0.7152. If the USD is strong, the pair can move in the opposite direction. If it happens, the support is at 0.7096.
- The Bank of Japan (BOJ) Governor Mr. Kuroda made his speech at a branch manager's meeting today. According to his words, the short-term and long-term interest rates will be kept at the current lowest levels for as long as necessary. Consumer inflation keeps floating around 1%. The overall conditions of the financial system of Japan remain stable. The current targets of the BOJ include managing the yields to achieve the inflation of 2% and expanding the monetary base until consumer inflation is held above 2%.
In addition, the trade balance of Japan showed a surplus of 139.6 billion yen, while the deficit of -45.1 billion yen was expected. As a result, today USD/JPY is declining. The pair is moving downwards to the support at 111.90 (50-day MA). If there is any positive news concerning the USD, it will encourage the bulls to break the resistance at 112.65 and move up to the next resistance at 113.47.
- Yesterday the Federal Reserve made some hawkish comments during the Federal open market committee (FOMC) meeting minutes. In addition, the US Treasury did not consider China as a currency manipulator. According to the report, China does little to directly support the value of Chinese yuan. However, it listed the US trade war opponent on a watch list. At the time, USD/CNH is trading at its summer's highs. The next resistance is at 6.9522. If the USD weakens, the support is at 6.91.
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The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.