On Monday, the 12th of November, the event calendar is light in important data releases as Canada and the US are on Bank holiday. In the following days, the American part of the trading session will be the most interesting in terms of business sentiment in the face of a divided Congress, the topic of trade wars and recent turmoil in the stock market.
There will be no surprises if the NY Empire State and Philly Fed indices go down, the question is, how much? On the positive side, the sentiment among consumers remains strong, which should be reflected in the higher dynamics of retail sales (on Thursday). The rise in gasoline prices and recovery of the weakness of some components of core inflation should raise the CPI annual index to 2.5%. With strong USD stance, disappointments in data will have more impact than positive surprises.
After the last weaker readings of mood indicators in business it is more likely that the ZEW index (on Tuesday) will continue losing. The preliminary estimate of GDP from Germany (on Wednesday) is likely to produce a negative reading based on the one-off effect of regulatory burdens in the automotive sector, but it certainly will not help in the discussion about the scale of the slowdown in the euro area. EUR / USD ceased to be guided by foundations from the Eurozone and the economists do not expect a significant impact of the data on the exchange rate, but please beware of a breakthrough in the dispute over the Italian budget and its impact on the market volatility.
The calendar from Great Britain includes a report from the labor market (on Tuesday), CPI (on Wednesday) and retail sales (on Thursday). Employment growth has slowed down in recent months, so acceleration would be a pleasant surprise. Higher wage dynamics will be a good prognosis for inflation outlook, which in October was to remain at 2.4% y / y. Data on sales will be a test of consumer sentiment in the face of uncertainty around Brexit negotiations. The policy will remain the main driver of GBP volatility, where more and more signals in recent days indicate a germinating agreement.
Let's now take a look at the EUR/USD technical picture at the H4 timeframe at the beginning of the trading week. The market has broken below the technical support at the level of 1.1301 and made a local low at the level of 1.1239. This low is very close to the old channel upper boundary and it looks like this old channel test from the upside after the breakout. If there is no bounce soon from this level, the bears will keep pushing the prices lower and the weak and negative momentum is indicating there are still in control over the market. The next technical support is seen at the level of 1.1118.