Forex. Euro/dollar forecast (EUR/USD)
Despite the correction at the beginning of the session on Monday to the mark of 1.1410, the quotes of the euro/dollar pair decreased to the support level of 1.1375 at the end of the first trading day of the new week.
For the European currency, the main news of the day was Angela Merkel's announcement that she will not run for the presidency of the Federal Government in 2021 and be re-elected as leader of the Christian Democratic Union. This is due to the decline in support of the CDU and Merkel personally in several regions of Germany, in particular in Bavaria. This news dragged the euro down.
Some factor in the support of the European currency was the fact that the agency did not reduce the credit rating of Italy with BVI, but changed the stable outlook to the negative.
European stock markets strengthened significantly at the beginning of the week, the Stoxx Europe 600 rose by 0.9%. This helped the European currency to slow down the downward trend. The growth of European stock indices was due to the growth of American stock indices. The news of Angela Merkel's resignation as chancellor was supported by the German stock market, which showed the greatest growth.
On Tuesday, the eurozone GDP data for the third quarter of this year will be announced, which may be a factor of pressure on the euro exchange rate. The economic slowdown in the Eurozone continues. The ECB is expected to downgrade its forecasts for 2018 and 2019. In the third quarter, GDP growth is projected to decline year-on-year to 1.8%, it is possible that the data will be even weaker.
In our forecast for Tuesday, we assume a downtrend of the euro/dollar pair to support levels of 1.1365, 1.1350 and 1.1325.
Forex. Pound/dollar currency pair forecast (GBP/USD)
On Monday, the exchange rate of the pound/dollar pair fell slightly to 1.2805 at the end of the trading session.
Support for the pound yesterday was provided by the indicators of the volume of net loans to individuals, which were higher than forecasts by 0.6 billion and contributed to a partial recovery of the british currency after the morning fall.
The final decline of the pound/dollar pair was due to the autumn forecast of the British Treasury, also released on Monday. Contrary to the announcement of the expected growth of British GDP in 2019 by 1.6% against 1.3% in the estimate in March, the information about the increase in reserves for Brexit by 2 billion pounds has caused fears of traders.
The basic price index of personal consumption expenditures, published yesterday in the United States (a key inflation indicator), showed an increase of 0.2% at the end of September. This strengthened confidence in the Federal Reserve's interest rate hike and contributed to the appreciation of the dollar.
Yesterday's WTO hearings of complaints filed by China and several other countries against the United States in connection with metal tariffs were blocked, postponed to November and did not affect the dollar.
Today will publish a composite index of housing costs and a consumer confidence index in the United States. Housing statistics in recent years have traditionally been the Achilles heel of the United States, so we can expect a decline in the dollar.
Thus, today we expect the growth of the British pound against the dollar with resistances at the levels of 1.2815, 1.28300 and 1.2860.
Forex. Gold price forecast
In yesterday's trading gold was traded in a wide intraday range and decreased by the end of the day to 1227 dollars per troy ounce.
On Monday, the exchange rate of gold quotes was influenced by the dynamics of the US stock market. So, in anticipation of the release of positive indicators from AvalonBay, Mondelez and Chase, futures showed growth. The reporting did not deceive market expectations, which affected the increase in the share price of these companies during the day. Of the other news that has affected the American stock market, it is worth highlighting the acquisition of IBM company Red Hat.
On Tuesday, the reporting figures of a number of U.S. companies from the S'P 500, including Coca Cola, Facebook, General Electric, Mastercard, eBay, Baidu and Pfizer will be known. As we remember, last week it was the reporting of technology companies that pushed the American stock market to decline. A similar scenario may be typical for today's trading, given that by the end of the session, American indices still went down.
According to current statistics, THE ETF investing in gold is actively increasing its volumes, which indicates good prospects of the precious metal as a protective asset.
We should not forget about the current political instability on the eve of the American elections. Saturday's attack on a synagogue in Pittsburgh and the sending of bombs to Democratic politicians a week and a half before the election could also affect traders' sentiments. Sustained inflationary pressures will also prevent stock indices from rising in the near term, acting as a factor supporting gold.
We expect today's gold quotes to rise, probably testing resistance levels of 1232, 1234 and $1,238.
Forex. North American Oil Forecast (WTI)
WTI crude oil started the new week at $67.27 and even rose to $67.50 per barrel. By the end of the trading session, oil quotes went into decline, which was due to the decline of Us stock indices by the end of the day. At the end of Monday's trading session, the price of oil reached 67.17 dollars per barrel.
In addition to stock markets, oil became cheaper amid easing fears of a shortage of raw materials. Iranian Vice President Eshaq Jahangiri said that oil exports from Iran due to U.S. sanctions from November 4 will not fall below 1 million barrels per day. Given Saudi Arabia's intentions to increase oil production, the volumes of Iranian oil can be replaced without feeling a shortage of the market.
The issue of stopping Iranian exports of refining products to Iraq also seems to have been resolved, and the processing of raw materials from Iraq can be carried out in Turkey. In addition, on Monday Iran launched exchange trades with supply futures for oil. With an offer of 1 million barrels, demand was 350,000 barrels. 28% of raw materials have already been sold. This volume of supply reduces the fears of oil traders.
On Tuesday, we expect a further decline in quotations against the background of expectations of the american Petroleum Institute's reporting, according to which oil reserves in the last few weeks have a clear course of increase. Further sell-offs in stocks are not excluded, and therefore unstable stock markets will continue to put pressure on oil. Resistance levels for the price of a barrel of WTI crude oil can reach 67.30, 67.50 and 67.80 dollars per barrel.
Forex. Cryptocurrency forecast
On Monday, Bitcoin showed a rapid decline in the price – $6,322 by the end of the day, although the morning trading was at $6,500. The reason for such a sharp pullback analysts consider the financial report of the Japanese exchange Coincheck, according to which there was a drop in the company's revenue. Traders also reacted to Sunday's hacking attacks on Canada's MapleChange exchange, a small episode nonetheless reflecting a deep security vulnerability problem.
Ethereum and Ripple followed Bitcoin, down from $205 to $196 and from 0.4630 to 0.4420, respectively.
At the Mad Money Conference on Monday, Visa CEO Alfred Kelly said that the company is ready to support cryptocurrencies if the market takes a course on so-called consensus currencies, such as Bitcoin and Ethereum. Despite this, Visa plans to tighten measures on cryptocurrencies in December. The market can take positively such statements.
Also, the beginning of the week was marked by the fact that Warren Buffett's berkshire Hathaway company began to invest in blockchain and finTech startups. Recognition of cryptocurrencies by their long-standing criticism can be a stimulating signal for traders.
At the moment, the following trend in the market is manifested: traders are waiting for the activation of institutional investors, believing that they will become a catalyst for the growth of the cryptocurrency exchange rate. In this regard, the question of the dynamics of the uptrend, whether it will be instantaneous or gradual, remains relevant. The expectation of a rally stimulates the market a little, as seen by the moderate but stable growth of Bitcoin in recent days, interrupted on Monday.
Today we expect that by the middle of the trading session the downtrend of Bitcoin will be interrupted, and the cryptocurrency will regain lost positions, aiming for resistance levels of 6370, 6400 and 6450 dollars. Bitcoin's dynamics will also affect the movement of Ethereum and Ripple. The first may try to test resistance levels of 199, 202 and $205, and the second key points are likely to be 0.4450, 0.4475 and 0.4500.