2nd – 6th December 2019
The Dollar closed the week with a bang after the US jobs report smashed expectations. At the beginning of the week, the Dollar spent the first four trading days of the month selling off and started to look rather oversold by Thursday afternoon. With the very positive jobs data on Friday, however, reporting +266k, we instantly saw USD bulls enter the market and the Dollar pushed higher very quickly and rather aggressively. As a result of this, the Dollar Index (DXY) finished the week taking two days worth of losses back and finally closed at 97.68.
A rather interesting week for the Euro, we saw the EUR/USD Forex rate hold below resistance around the 1.1100 mark, even though the Dollar was heavily selling off in the early-part of the week. However, when US Dollar strength returned on Friday, EUR/USD sellers made an impulsive entry back into the market and pushed the price below 1.1050. This was only temporary, however, and the pair quickly rejected this level and went on to close the week just above at 1.1060.
The Pound started to truly breakout last week after traders started to bet on and price in a Conservative win in the UK General Election, which is on Thursday 12th December. A Conservative win is seen as a stepping stone in the right direction for the all important Brexit deal . After a very strong start to the week, towards the end of the week we saw GBP/USD sell off slightly and find support at the all important 1.3000 level, from where it started to rebound higher on Friday. This leaves the door open to both bullish and bearish scenarios leading up to Thursday.
GBP/USD went on to finish the week just above 1.3100.
The Week Ahead
For the week ahead, it will likely be a very volatile week, as we have the all important FOMC rate decision and statement on Wednesday evening, as well as the ECB rate decision on Thursday. On the same day we also have the UK General Election, so positioning ahead of these events could start to appear within the FX markets with traders pricing in expectations for these events.
On the macroeconomic front as well as the all important rate decisions and UK general election, we will also be faced with the German ZEW economic sentiment on Tuesday, US CPI Wednesday, and US Retail Sales to finish the ever so hectic week off on Friday.
So be careful, expect volatility, and enjoy! Until next week, Happy Trading!