Weekly Forex Forecast: 1st – 5th December

 

The Forex markets head into the busiest week of the month with PMI data and Central Bank policy review meetings on the tap. The most important event for the week however will be the monthly US nonfarm payroll data and the ECB press conference.

Fundamentals for the Week 24 – 28 November

Date	Event	Estimates
1 December	China manufacturing PMI	50.5
	Japan final manufacturing PMI	52.1
	China HSBC final manufacturing PMI	50
	Eurozone final manufacturing PMI	50.4
	UK Manufacturing PMI	53.1
	US Final manufacturing PMI	55
	US ISM Manufacturing PMI	57.9
2 December	Australia building approvals m/m	5.2%
	RBA Overnight cash rate/statement	2.5%
	UK Construction PMI	61.2
	Eurozone PPI m/m	0.3%
3 December	Australia GDP q/q	0.7%
	Switzerland GDP q/q	0.3%
	Eurozone final services PMI	51.3
	UK Services PMI	56.6
	Eurozone retail sales m/m	0.6%
	UK Autumn forecast statement	–
	US ADP Payroll data	223k
	US Final services PMI	56.3
	BOC Rate statement	1%
	US ISM Non-manufacturing PMI	57.5
4 December	Australia retail sales m/m	0.1%
	BoE Official bank rate	0.5%
	ECB Press conference/rate	0.05%
	Canada Ivey PMI	53.2
5 December	German factory orders m/m	0.6%
	Eurozone revised GDP q/q	0.2%
	Canada unemployment change	5.3k
	Canada unemployment rate	6.6%
	US Nonfarm payroll data	225k
	US unemployment rate	5.8%

 

 

Currencies/Events to Watch this Week

• Focus will be on Mario Draghi this week as the ECB meets for its monthly policy review. Markets are starting to expect a possible increase to the ECB’s asset purchases, but it is highly probable that the markets will be disappointed. Eurozone final GDP estimates are also on the tap which is expected to remain unchanged at 0.2%
• The UK’s PMI data will be released this week and any upward reading could see the GBP start to push higher. The Bank of England will also be releasing its monthly policy but is expected to be widely unchanged. Look to the Autumn forecast statement to be released this week
• Canada’s unemployment data is on the tap this week and is expected to see a slowdown in the number of jobs added. The unemployment rate is expected to remain unchanged as well. Actual reading meeting estimates could put downward pressure on the Canadian dollar which has been hit last week by falling oil prices
• The US NFP data will be the major event for the week ahead especially after last month’s data was mixed. The weekly unemployment claims have been modestly lower but well above their averages. A second month of mixed NFP reading could see the US Dollar ease its gains.
• Australia’s GDP data, retail sales and the RBA interest rate decision could bring some volatility to the Aussie dollar which has turned out to be susceptible to verbal rhetoric from the RBA officials. A better than expected reading could help the Aussie lift off from its yearly lows.

FX Majors Weekly Pivots

	R3	R2	R1	Pivot	S1	S2	S3
EURUSD	1.2691	1.2611	1.2522	1.2442	1.2353	1.2273	1.2184
GBPUSD	1.5965	1.5895	1.5756	1.5687	1.5547	1.5478	1.5339
USDCAD	1.1586	1.1509	1.1367	1.1367	1.1290	1.1148	1.1071
USDJPY	120.771	119.769	119.242	118.24	117.713	116.711	116.184
USDCHF	0.9860	0.9794	0.9727	0.9661	0.9595	0.9528	0.9462