It is very likely that the difference between success and failure in Forex/CFD trading depends primarily on which assets you choose to trade each week and in which direction, and not on the exact methods you might use to determine trade entries and exits.
Therefore, at the beginning of the week, it is a good idea to look at the big picture of what is developing in the market as a whole and how such developments are influenced by macro fundamentals, technical factors and market sentiment.
Fundamental analysis and market sentiment
Overall, last week saw a pickup in risk appetite, driven partly by expectations that US interest rates will remain elevated for longer than previously expected, and partly by the ongoing war in the Middle East between Israel and Gaza, which could expand dramatically at any time. point. The Swiss franc and gold were the biggest safe-haven gainers. This is likely to continue as the new week begins, with Hezbollah increasing its attacks on Israel from Lebanon, Israel increasing its responses, and the United States raising the alert level for its forces in the Middle East, which are strengthened.
Last week was quite busy in terms of major data releases, with the main events being US retail sales and UK consumer price index data showing stronger consumer demand than expected in the US economy and slightly higher than expected inflationary pressures in the Kingdom United . However, the main action in the market last week was in stocks and some commodities, with the US dollar and Japanese yen making no progress despite their safe haven status.
The other major events last week were the release of Canadian and New Zealand inflation data. Each was slightly lower than expected, which saw their respective currencies weaken.
Other key data released last week were:
- Australian RBA monetary policy meeting minutes: contains no surprises.
- US jobless claims – came in more or less as expected.
- US Empire State manufacturing index: better than expected.
- UK Retail Sales – significantly worse than expected, which is bad news for the UK economy.
- Australian unemployment rate – slightly better than expected.
The week ahead: 23 October – 27 October
Next week the markets will probably see a level of volatility higher than last week, as there will be more important economic data released. The key data released this week are, in order of importance:
- The United States advances GDP
- Core PCE price index in the United States
- European Central Bank main refinancing rate and monetary policy statement
- Overnight rate, rate statement and monetary policy report from the Bank of Canada
- Australian CPI
- Change to UK claimant count
- Unemployment claims in the United States
- Flash manufacturing and services PMI data from the US, Germany, the UK and France
- US consumer sentiment revised
- Business climate of the Ifo in Germany
- Speech by the RBA governor
Credit by DailyForex.com
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