Forex. Euro/dollar forecast (EUR/USD)
The projected fall of the euro/dollar pair in Friday's trading was even stronger than expected. The quotations reached another low of 1.1433, but during the day the pair recovered to the level of 1.1520.
On Friday, European Commissioner for Economics Pierre Moscovici noted that the decision on the Italian budget has not been made yet, it gives hope for a compromise and the subsequent growth of the euro. The market is extremely sensitive to the "Italian issue", Friday's decline of the European stock market by 0.12% is connected with it.
The local recovery of the euro supported growth in Asian stock markets. In particular, these are positive statistics from China on the growth of retail sales and capital investments despite the decline in GDP by 0.1%.
Data released on Friday on the u.S. secondary housing market showed that this figure fell by 3.4% to 5.15 million compared to the expected 5.29 million at the end of September. The report on housing sales played in favor of the euro and influenced the dynamics of the rate in the direction of growth by the end of the day. And yet it is worth noting that the decline in sales is primarily due to a lack of supply with increased demand and the accompanying increase in house prices, which is unaffordable for the majority of the population, even in spite of the increase in employment and average wages.
Friday's remarks by the head of the Federal Reserve Dallas Kaplan, who said that the rate of inflation growth and the Fed's intentions to follow the policy of raising rates, also affected the dollar.
Today, Italy is expected to respond to a letter from the European Union authorities to Giovanni Tria, head of the Italian Finance Ministry, with a declaration of concern about the budget deficit for 2019. If the Italian administration remains adamant, then the euro rate may go down again.
In Monday's trading, we assume a further upward trend of the euro/dollar pair to resistance levels of 1.1520, 1.1540 and 1.1560.
Forex. Pound/dollar currency pair forecast (GBP/USD)
At the end of the week, the quotes of the British currency partially restored the lost positions. During Friday's trading session, the pair reached the resistance level of 1.3100, then rolled back to the mark of 1.3065 by the end of the day.
The pound continues to be affected by the pause on Brexit taken by the EU and the UK following the cancelled summit on October 17-18. President of the European Parliament Antonio Tajani said that the parties managed to reach a consensus on the rights of British citizens in the EU and European citizens in the UK, as well as on London's payment of its debt to the EU budget. However, the issue of the Irish-Northern Ireland border remains on the agenda, and Tajani admitted that negotiators still have a long way to go to achieve a common vision.
Published on Friday, the official report on public sector borrowing in the UK showed that in September the figure fell to 4.1 billion, which turned out to be much more optimistic than the expected reduction to 4.5 billion Pounds. This is the lowest deficit in the last 11 years, and since the beginning of the current financial year the net volume of public sector loans has decreased by 35% compared to the same period last year, which indicates a consistent policy of the British authorities in this matter.
However, Friday's speech by Bank of England Governor Mark Carney proved to be less promising for the British financial sector. He suggested big risks for British banks in the context of Brexit and focused on the Bank of England's hard stress tests, as the central bank lays the worst-case scenario for negotiations as its policy is based.
Today's trading scenario assumes the continuation of the uptrend, which appeared on Friday, with resistance levels of 1.3075, 1.3100 and 1.31250.
Forex. Gold price forecast
On Friday, gold returned to the level of the beginning of trading on Monday about 1230 dollars per troy ounce, thus continuing the corrective growth, which began on Thursday.
Gold continues to be supported by the political uncertainty surrounding the U.S. congressional elections. In addition, the growth of quotations was affected by Friday's fall in world stock markets. In particular, U.S. stock indices fell by 1.3-2%, European – by 0.4-1.1%, Asian was characterized by a similar dynamic.
The growth in demand for investment gold was maintained after the publication of the Chinese report, when it became known about the decline of China's GDP by 0.1%.
Gold remains sensitive to interest rate changes by the Federal Reserve. The publication of the minutes of the Fed meeting from September 25-26 with a 0.25% increase in the base rate did not cause panic in the market, but became a deterrent for gold, as this increase is support for the dollar. The dollar index reached a local high of 95.67 even before the protocols were published.
In general, after rising from the level of 1200 dollars per ounce, the price of gold again found a narrow range. Gold remains the lowest volatile asset, even though it has an accompanying news background.
We assume that in today's trading the dynamics of the exchange rate will remain low with the continuation of the upward trend and with the possibility of testing resistance levels at 1232, 1235 and 1237 dollars.
Forex. North American Oil Forecast (WTI)
By the end of the trading week, oil managed to reverse the downtrend that had dominated the market since Tuesday, and to win back some of the positions, for a barrel of WTI crude oil requested an average of 69.27 dollars.
Also on Friday, data on the increase in the number of drilling rigs in the past week, provided by Baker Hughes, became known. The number of oil rigs increased by 4 units- from 869 to 873. The growth in the number of active drilling is small, but can cause fluctuations in the market.
Pressure on oil quotes continues to be exerted by the report of the Energy Information Administration of the U.S. Department of Energy and the sale of strategic oil reserves from the state reserve, which the U.S. began to reduce gasoline prices before the Nov. congressional elections. Over the past week, sales amounted to 1.1 million barrels, another 11 million should be sold soon. Such a policy threatens local oversupply – which is a deterrent to oil.
A supporting factor for oil in Friday's trading was the information about the increase in demand for hydrocarbons in China and expectations that a certain number of traders should close short positions before the weekend.
In our forecast for Monday, we expect a correctional increase in the price of WTI crude oil to resistance levels of 69.75, 70.00, and 70.30 dollars per barrel.
Forex. Cryptocurrency forecast
On Friday, about $6,580 was asked for Bitcoin at auction. Thus, the benchmark cryptocurrency showed a slight drop compared to Thursday. By the end of the week Ethereum managed to win back positions from 206 to 208 dollars. Ripple continued the downward weekly trend with a consolidation at 0.4678 by Friday evening.
Bitcoin may continue to be influenced by the USDT staplekoin rate, which moved away from its target of 1 dollar last Monday, thus triggering a jump in the Bitcoin exchange rate and its imbalance between trading on Bitfinex and the rest of the exchanges. On Friday, USDT returned to its usual level, and with it the rate of Bitcoin on Bitfinex, almost equal to the rate on other exchanges.
Also, the cryptocurrency market can react to the intentions announced on Friday by the Group for the development of financial measures to combat money laundering on the preparation of standards of cryptocurrency regulation. These standards will have to be followed by financial regulators, cryptocurrency exchanges and crypto wallet providers.
For Bitcoin, we forecast moderate growth at the beginning of the week, with resistance levels of 6620, 6635 and 6650 dollars.
For Ethereum, a similar scenario is expected to be highly likely, given Friday's rate of increase, with resistance levels at $212, $220 and $223.
Ripple is more likely today than Bitcoin and Ethereum, especially in the face of its lack of exposure to a positive news background. At the same time, the cryptocurrency can test support levels of 0.4600, 0.4580, and 0.4550 dollars.