All traders know that trend is their friend.
Weekly Forex Outlook: Nov. 6-10
The USD index (DXY) consolidated after explosive growth in the week before last.
There were a lot of economic releases from America, so it’s quite natural that they turned out to be mixed. ISM manufacturing PMI declined and trade deficit became a bit wider. On the other hand, the US registered increases in Chicago PMI, CB consumer confidence, ISM services PMI. Jobs growth accelerated in October as the country recovered from the hurricanes. NFP missed forecast a bit, but still showed a solid growth of 261K. Average earnings stagnated, but that after strong growth in September. Analysts remain optimistic that wages will pick up in the next months.
In the coming days, the US economic calendar will be less full. The FOMC member Dudley will speak on Monday. On Friday, there will be a bank holiday in the US (so, lower liquidity) and the release of flash consumer sentiment figures.
The market is still expecting the Federal Reserve to raise rates in December. The statement of the Fed’s November meeting gave little indication that the Fed would hold off on raising rates again soon. All in all, the environment seems to be rather positive for the USD. Traders will want to see more progress US tax reforms, as well as watch Donald Trump’s visit to Asia.
DXY needs to get above resistance at 95.00 to continue its advance to 95.25, 95.50 and 96.00. Support is at 94.30, 93.80 and 93.00.