The week ahead is very busy and full with economic updates. Though, two are the scheduled events that are expected to drive the market. The first event is the Organization of the Petroleum Exporting Countries (OPEC) meeting on Wednesday in Vienna, Austria, potentially with the non-OPEC member Russia, to coordinate output cut. The production cut is almost sure, though, the question surrounds the oil price is which countries will cut their outputs and how much will be the decrease.
On Friday, traders will focus on the U.S. job report for November as it is the last one before the FOCM meeting in December when policymakers are expected to push the button for a rate with a probability of 93.5% as the CME Group FedWatch shows. A strong employment report is necessary to ensure the stability and the strength of the labour market. The U.S. economy is expected to add 174,000 jobs in November versus 161,000 jobs the previous month. Figures above 180,000 will push the dollar higher and may gain the momentum needed to cover last week’s losses. The headline unemployment rate is expected to remain 4.9% while the average earnings are forecasted to add 0.3% compares to last month’s increase of 0.4%. It’s worth mentioning that U.S. GDP estimate is coming out on Tuesday, but as no major changes are expected, we wouldn’t expect the indicator to affect the greenback. The economy is predicted to expand 3.0% annualized versus 2.9% the initial estimate.
Other news that may have an impact on the market but smaller, is the U.S. ADP employment change and the ISM manufacturing PMI because strong reading in these two indicators raising the prospect of a solid NFP report. The Bank of England will publish its Financial Stability Report and since the negotiations for the beginning of Brexit procedures are still in progress, each signal or comment for the economic situation of the U.K. economy affects the value of the sterling cross pairs. ECB President Mario Draghi will give a speech later in the day, at 14:00GMT before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels, Belgium. He will speak about his capacity as a Chair of the European Systematic Risk Board. Traders should be careful, as statements from the speech can drive the dollar in either way.
WTI Crude Oil - Technical Outlook
Oil price is currently falling, adding to Friday’s steep losses as doubts re-emerged over the ability of major producers to agree on output cuts at a planned meeting on Wednesday aimed at reining in global oversupply. The West Texas Intermediate (WTI) Cruse Oil recorded the fifth negative day in a row and is approaching the ascending trend line on the daily chart.
The oil is establishing within a rising sloping channel and over the last five days, the price is moving towards the $43.60 support level if there is penetration of the $45.20 barrier. The price is developing below its moving averages while early this morning hit the 200-daily SMA. The technical indicators are moving near its mid-levels, however, we would expect the pressure to remain to the downside. MACD oscillator holds in the neutral area, as well as RSI is approaching the 50 level.
EUR/USD - Technical Analysis
The EUR/USD pair edges higher over the last 3 days and rose more than 0.7%. The common currency is recording the fourth positive day in a row after the aggressive sell-off from the 1.1300 psychological level until the 8-month low slightly below 1.0520. This week the pair will focus on the U.S. non-farm payrolls report on Friday.
From a technical point of view, the single currency is moving towards the 1.0700 resistance level against the U.S. dollar. Early this morning, the price surpassed above the 50-SMA and is approaching the 1.0780 barrier which overlaps with the 100-SMA, on the 4-hour chart. The technical indicators, on the short-term timeframe, seem to be in agreement with the bullish thought as both are rising. The RSI indicator is following a positive path while the MACD oscillator is ready to surge above the zero line. On the other hand, a failed attempt will expose the price back to the previous low.
