FX weekly outlook

The strength of USD on Friday did a massive damage to gold price. The precious metal dropped by more than $10 from $1072 to $1052. The USD index is currently testing the strong resistance of $100.260 which is the 2015 high. A break of this resistance could push prices to test the 2003 resistance level of $100.9.

This week will be a very important week to set the pace for the end of the year; there are whole lots of economic activities lined up for this week from across the global economy. The market sentiments remain bearish on EURO, bullish of USD and bearish on Swiss Franc. There are high possibilities of quantitative easing expansion by the ECB and we might also see an increase in the asset purchase. This explains why the market is bearish on EURO. Many analysts are expecting parity before the end of the year on EURUSD. Swiss Franc is another currency that we need to keep an eye on; Swiss National bank might want to play a fast one in anticipation for ECB quantitative expansion. This is because the ECB action could make the Swiss franc strong if the ECB should increase there asset purchase. Swiss national bank wants a week currency in other to boost her economy, especially the tourism sector. This is why the Swiss bank might also take some action in anticipation for European central bank move.

Market will be watching closely all economic data this week especially the US jobs market report on Friday. This is a key data that is likely to confirm the rate hike by the end of the year.  A strong Non-farm pay roll data will confirm a rate hike and USD strength will put pressure on all other pairs and commodity prices.

Here are major economic event for the week:

Monday:  US pending home sales

Japan capital spending

Tuesday: Chinese manufacturing pmi

Chinese Non-manufacturing pmi

AUD Interest rate decision

RBA statement

German manufacturing pmi

US manufacturing pmi

Wednesday:  AUD gdp

UK construction pmi

EUR CPI

US ADP Non-farm employment change

FED chair speaks

CAD intrest rate

Thursday: UK service pmi

EUR interest rate decision

ECB press conference

FED chair testifies

US ISM Non-manufacturing

Friday: AUD retail sales

US NFP

US unemployment

CAD employment change

CAD ivey

ECB president speaks