The Germany consumer price index fell in October by 0.3% (at the forecasts level), the CPI remained unchanged in France. The ECB inflation forecast was disappointing - even the inflation can be less in five years than the target level of 2.0% - only 1.8%.
The E18 largest economy demonstrated growth of 0.1% q/q and 1.2% y/y on the 3rd quarter results. In general, the eurozone growth was recorded at the level of 0.2% q/q and 0.8% y/y (vs. 0.1% q/q, 0.7% y/y). Of course, its growth remains very weak. Taking in consideration that the ECB pursues stimulating monetary policy and it is possible that this trend will be preserved.
We advise to consider long positions with the first target – 1.2580-1.2600. After fixing above the first target, the level 1.2660-1.2680 will become the next one.
The "cable" the sentiment, formed amid the Bank of England's inflation report publication, continues to support the US dollar, assuring that the UK policy tightening will not be implemented in the short term and uncertainty about the euro and the yen can be explained by the new guidelines expectations.
The market sentiment is deteriorating. Apparently, the investors accepted that the Bank of England gave the Fed possibility to take decisions about the rate increase issue. However, the pound/dollar is heavily oversold, so there are chances that it can stop the prolonged pound decline.
We advise to consider short positions with the first target – 1.5630-1.5650. After fixing below the first target, the level 1.5580-1.5600 will become the next one.
The Japanese yen is again trading with decrease against the dollar that could be caused by the increase in the Japan stock market where the Nikkei has risen for the week. As for the yen perspectives, this renewed pair USD/JPY growth is likely to be limited in view of the technical obstacles in the situation where the political questions about elections have not yet been resolved.
The Japan's GDP report for the third quarter that will be released on Monday can bring anxiety. The weak growth after the significant decline in the second quarter (7.1% q/q) will distract traders from the government's decision about the sales tax.
We advise to consider long positions with the first target – 116.25-116.45. After fixing above the first target, the level 117.15-117.35 will become the next one.