The decision of People's Bank of China on the interest rate is due at 03:30 (GMT+2). This year, the Chinese regulator again began to reduce the rate, did it twice and brought the figure to 4.20%. However, the state of the PRC economy continues to deteriorate. In Q3 2019, China's GDP again slowed down, this time to 6.0%. Under these conditions, the People’s Bank of China may well lower the rate once again or apply other measures of economic support.
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21.10.2019 - 15.10.2019
At 01:50 (GMT+2) in Japan, data on changes in the volumes of exports and imports of goods and services for September will be released. It is expected that in the face of reducing global demand and trade conflicts, both indicators will continue to decline, albeit at a slower rate than in August. Exports may decrease by 4.0%, and Imports may decline by 2.8%. The implementation of the forecast could put pressure on JPY.
At 01:50 (GMT+2), September data on Trade Balance will be published in Japan. This indicator captures the difference between the amount of payments for exported and imported goods. Its increase is a positive factor for the Japanese currency. It is expected that the Trade Balance could once again become surplus at 54 billion yen. The implementation of the forecast will support JPY.
At 19:00 (GMT+2), data on the number of active oil rigs in the US from Baker Hughes will be released. The weekly report records a change in US oil production capacity. Since the end of last year, the indicator has been steadily declining. Previously, the number of rigs increased from 710 to 712 units. Continuation of this trend may put pressure on oil prices.
USD is weakening against EUR and GBP but moves horizontally against the JPY.
For the second week, the index is traded within the central Murrey channel of 26171.9–26953.1 ([3/8]–[5/8]). Now the price is trying to consolidate above its upper border and continue growth to annual highs near 27343.8 ([6/8]).
The GBP/USD pair continues to grow rapidly, having gained more than 800 points since the end of last trading week. The main catalysts are the fall in demand for the American currency amid poor statistics on key sectors of the US economy and the growth of investor interest in the pound due to the acceleration of UK GDP growth. The price has clearly changed the downward direction to the upward one.
On the H4 chart, the price has reversed near the upper border of the descending channel and is trying to break down through an opposing ascending fan. Breakdown of the level of 1487.00 (ratio 50.0%, the midline of Bollinger Bands) will give the prospect of a further decline to 1481.25 (ratio 61.8%) and 1474.00 (ratio 76.4%). Otherwise, growth may resume to 1501.00 (ratio 23.6%).