Global Economic Overview 25 October 2016

October 25, 2016

Global Economic Overview 25 October 2016

German Ifo Business Climate

German business climate recorded their biggest monthly increase since July 2010 reaching 109.5 from 106.3 in August.

The survey showed manufacturers were no longer concerned about the Brexit vote and were more optimistic about prospects. Economists expected a reading of 106.3.

However, despite the positive reading, many analysts believe that Germany cannot continue to rely on domestic consumption and construction for growth but needs both structural reforms and to form a new economic cycle.

Economists expect a further rise to 109.6.

US CB Consumer Confidence

U.S. consumer confidence edged up unexpectedly in September to more than a nine-year high of 104.1 from 101.8 in August reflecting optimism over the health the U.S. economy.

Economists expected the index to decline to 98.6 in September.

The current conditions increased from 125.3 to 128.5 and the expectations index rose from 86.1 to 87.8. U.S. consumer confidence is expected to decline to 101.5 this time.

Mark Carney speaks

BOE Governor Mark Carney will speak in London before the House of Lords Economic Affairs Committee about the economic consequences of the Brexit Vote.

Market volatility is expected especially after his recent comments about the Bank being “not indifferent” to the pound.

Will Carney hint about delaying further stimulus now that inflation has risen?

EUR

• German Ifo Business Climate

• ECB President Draghi Speaks USD

• CB Consumer Confidence GBP

• BOE Gov Carney Speaks

EURUSD

There is nowhere at the moment to trade.

So we will be waiting for the pair to reach one of these levels: 1.0897 (Resistance level where we can go short) Or 1.0858 (Support level where we can go long).

Otherwise, we will not enter the market. So let’s wait for the pair to decide where it will go.

Resistance levels: 1.0897

Support levels: 1.0858

Recommended: Waiting for the pair to reach one of the levels mentioned in the report.

GBPUSD

As we can see on the H1 time frame that the pair is traded inside a symmetrical triangle (a price pattern) so we will be waiting for one of its sides to be broken to confirm a buy or a sell signal.

Resistance levels: 1.2260

Support levels: 1.2170

Recommended: Waiting for the price to be traded outside the symmetrical triangle.

GOLD

We believe that the Gold may continue going up during the day to reach the level of 1270.

We also see that there is a high potential opportunity that if the price goes up to be traded between the level of 1270 and 1275, then it may decline during the day.

So to keep an eye on these levels.

Resistance levels: 1270 1275 1280

Support levels: 1261 1260

Recommended: Gold may continue going up during the day to reach the level of 1270.

AUDUSD

The pair is traded below a strong resistance level around 0.7640 so we believe that as long as the pair is traded below it, it’s highly recommended to go short targeting the level of 0.7588 during the day.

On the other hand, breaching the level of 0.7640 opens the door for the pair to reach the level of 0.7687.

Resistance levels: 0.7640 0.7687

Support levels: 0.7588 0.7553

Recommended: As long as the pair is traded below the level of 0.7640, it’s highly recommended to go short

GBPJPY

The pair is about to face a strong resistance level around 127.90 so we believe that if the pair respects that level then it could be a bearish signal to go short targeting the level of 127 during the day.

Resistance levels: 127.90 128 129

Support levels: 126 125 124

Recommended: Since the pair is traded below the level of 127.90, then it’s highly recommended to go short.

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