Weekly Market Commentary | 10-16.10

Want to know what’s going on this week? Stay up-to-date and in the know by taking a quick tour of this week’s market news, economic updates, and trading setups.

Due to the Columbus Day holiday on Monday, the US bond markets will be closed. As a result, trading activity may be muted in the afternoon. In addition, the October Sentix Investor Confidence statistics will be presented on the European economic calendar.

Tuesday>

– UK labor market data for September, expected to show some weakness, but wage growth will likely stay strong

– Swiss National Bank’s Chairman Jordan speech, possibly influencing the Swiss Franc in the Forex market

Wednesday>

– Manufacturing and industrial production from the UK, seen dropping slightly month-on-month

– US PPI inflation indices, likely showing another small decrease

– FOMC minutes from the recent Fed meeting, expected to confirm the hawkish narrative

Thursday>

– The headline event of this week – US CPI inflation data, projected to decrease slightly on the yearly basis, but the core inflation (more important) is seen rising again to 6.5% yearly, probably confirming that the Fed is far from done with raising rates

Friday>

– Chinese CPI, PPI, trade balance figures

– US retail sales for September, expected to stay near August levels, thus, the release should not cause significant volatility.

– Preliminary US Michigan consumer sentiment index for October

Setups for This Week:

Brent Oil

Primary View:

Last week ended with a decisive buy signal for oil driven by the agreed OPEC+ production cut

The price managed to escape from the channel down formation (green)

As long as the price stays above the upper line of the channel down pattern, the sentiment is positive

Alternative View:

If the price comes back inside of the channel down pattern, the sell signal will be restored

Gold

Primary View:

Gold had a rough end of the last week and also starts the same way this Monday

On the chart, we have a very dangerous false bullish breakout (green) above the major down trendline (blue)

Gold is now testing a crucial support on the 1680 USD/oz, should the price break that support it would mean a strong sell signal

Alternative View:

If the price comes back above the down trendline, the sell signal will be cancelled

AUDJPY

Primary View:

AUDJPY is having a massive triple top formation

The neckline (green) of this pattern was already broken, which gives us a strong sell signal

The target is on the 90.5 (orange), so the low from August

Alternative View:

If the price comes back above the neckline, the negative sentiment will be cancelled