All trading involves risk. Ensure you understand those risks before trading.
All trading involves risk. Ensure you understand those risks before trading.

Cable reigns supreme

Article By: ,  Financial Analyst
The US Dollar was bullish against most of its major pairs on Friday with the exception of the GBP and JPY. 

On Monday, no major economic data is expected to be released.                            

The Euro was bearish against most of its major pairs with the exception of the AUD. In Europe, September Consumer Price Index was released at +0.1%, as expected, vs -0.4% in August. The last phase of Brexit talks should end today. Boris Johnson and EU Commission President Von Der Leyen will hold talk on next steps tomorrow.

The Australian dollar was bearish against all of its major pairs.


Here is a review of key economic data over the past week:

On the jobs front, Change in Nonfarm Payrolls dropped to 661K on month in September (859K expected), from a revised 1,489K in August. The Unemployment Rate declined to 7.9% on month in September (8.2% expected), from 8.4% in August. Initial Jobless Claims fell to 837K for the week ending September 26th (850K expected), from a revised 873K in the week before. Continuing Claims dropped to 11,767K for the week ending September 19th (12,200K expected), from a revised 12,747K in the prior week. Finally, Automatic Data Processing's Employment Change rose to 749K on month in September (649K expected), from a revised 481K in August.

Regarding sentiment, The University of Michigan's Consumer Sentiment Index increased to 80.4 on month in the September final reading (79.0 expected), from 78.9 in the September preliminary reading. The Conference Board's Consumer Confidence Index spiked to 101.8 on month in September (90.0 expected), from a revised 86.3 in August. 

Looking at consumers, Personal Income slipped 2.7% on month in August (-2.5% expected), compared to a revised +0.5% in July. Personal Spending rose 1.0% on month in August (+0.8% expected), compared to a revised +1.5% in July.

On the housing data front, The Mortgage Bankers Association's Mortgage Applications dropped 4.8% for the week ending September 25th, compared to +6.8% in the week before. Pending Home Sales surged 8.8% on month in August (+3.1% expected), compared to +5.9% in July.

Factory Orders rose 0.7% on month in August (+0.9% expected), compared to a revised +6.5% in July. Durable Goods Orders increased 0.5% on month in the August final reading (+0.4% expected), compared to +0.4% in the August preliminary reading. Markit's US Manufacturing Purchasing Managers' Index unexpectedly declined to 53.2 on month in the September final reading (53.5 expected), from 53.5 in the September preliminary reading. Construction Spending increased 1.4% on month in August (+0.7% expected), compared to a revised +0.7% in July. Wholesale Inventories unexpectedly rose 0.5% on month in the August preliminary reading (-0.1% expected), compared to a revised -0.1% in the July final reading.

U.S. GDP rose to -31.4% on quarter in the second quarter third reading (-31.7% expected), from -31.7% in the second quarter second reading. 

The GBP/USD posted the largest weekly gain of 197 pips. Key resistance remains in play at the 1.2985 level. The bias remains bearish on a daily chart until 1.2985 is broken to the downside. 



 
Source: GAIN Capital, TradingView



The worst performing pair of the week was the USD/CHF declining 82 pips WoW. The pair is struggling to maintain support at the 0.9185 breakout level. A break above 0.93 resistance would set a path towards a target of 0.9375 on the rebound. 



Source: GAIN Capital, TradingView

Have a great weekend.

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