Last week market were relatively calm, however, the next five trading days could be more attractive for investors, as policy makers all over the world are gathering to decide whether to add more liquidity in financial systems, or they would rely on previous adjustments. EUR/USD has been weakening during the last five days, easing back from the two-year high. On Friday almost 60% of Dukascopy traders were holding short positions on the pair, while trader Jipper suggested the pair would be "ranging around the 1.34 level next week. The U.S. has a clear forward guidance programme in place allowing the market to price in and predict the removal of QE and interest rate rises". Moreover, Dukascopy Aggregate technical indicator is suggesting the pair would also move lower, while MACD indicator is sending clear "sell" signal, hence the outlook for the pair is bearish. Short traders may focus on 1.3422 (Fibo 38.20%), while in case the pair inches below 1.3295, 1.32 would be put on the map. From the fundamental part, the Euro is likely to stay under pressure at least until the ECB meeting on November 7. While any dovish comments by Draghi would send EUR/USD to 1.3422 or even lower, weak U.S. GDP data may slow down this depreciation.
The cable has formed a double top pattern on August 28; however, despite positive data from the U.K., the Pound is loosing ground versus greenback and rapidly approaching pattern's support at 1.5894. Meanwhile, before the support line, bears will have to break a Fibonacci Retracement (23.60%) at 1.5919. The crucial day for the pair, which may determine cable's future performance is Thursday as well, where Mark Carney may provide some hints on when the BoE will start raising rates. Furthermore, taking into account the fact Britain's economy is now one of the fastest growing, and latest reports are suggesting further improvement, we can expect hawkish comments from Carney, which would lead to stronger Pound. In case of pair's appreciation, long traders could focus on a bunch of resistance lines at 1.6070/80. Even though 65% of traders are expecting the pair to dip further, bears would face significant difficulties already 50 pips lower than the market price.
While the Euro, Pound and greenback are likely to be highly volatile in the second part of the week, the kiwi and Aussie would be attractive for traders on Tuesday and Wednesday. AUD/NZD is trading in boundaries of a channel up pattern and is facing a key level of 1.14 and a penetration of this level would put 1.12 on the map.