NZDUSD posts a strong week

The US Dollar was bearish against most of its major pairs on Friday with the exception of the GBP. On the US economic data front, Markit's U.S. Manufacturing Purchasing Managers' Index rose to 53.3 on month in the October preliminary reading (53.5 expected), from 53.2 in the September final reading.            

On Monday, New Home Sales for September are expected to rise to 1,025K on month, from 1,011K in August.   

The Euro was bullish against all of its major pairs. In Europe, the U.K. Office for National Statistics has reported September retail sales at +1.5% (vs +0.2% on month expected). Research firm Markit has published preliminary readings of October Manufacturing PMI for the Eurozone at 54.4 (53.0 expected), for Germany at 58.0 (vs 55.0 expected), for France at 51.0 (vs 51.0 expected) and for the U.K. at 53.3 (vs 53.1 expected). Also, the preliminary readings of October Services PMI were published for the Eurozone at 46.2 (vs 47.0 expected), for Germany at 48.9 (vs 49.4 expected), for France at 46.5 (vs 47.0 expected) and for the U.K. at 52.3 (vs 53.9 expected).

The Australian dollar was bullish against all of its major pairs.


On last week's U.S. economic data front:

Markit's U.S. Manufacturing Purchasing Managers' Index rose to 53.3 on month in the October preliminary reading (53.5 expected), from 53.2 in the September final reading. 

Regarding the U.S. job market, Initial Jobless Claims dropped to 787K for the week ending October 17th (870K expected), from a revised 842K in the week before. Continuing Claims fell to 8,373K for the week ending October 10th (9,625K expected), from a revised 9,397K in the previous week. 

Looking at housing data, Existing Homes Sales increased to 6.54 million on month in September (6.30 million expected), from a revised 5.98 million in August, a level last reached in mid 2006. The Mortgage Bankers Association's Mortgage Applications slipped 0.6% for the week ending October 16th, compared to -0.7% in the prior week. Finally, Housing Starts rose to 1,415K on month in September (1,465K expected), from a revised 1,388K in August.

The Federal Reserve's Beige Book stated that all districts have seen continued growth at a moderate pace since the downturn, however there is concern about the restaurant industry as cold weather approaches since they have relied on outdoor dining. Employment increased across all districts, although growth remained slow. Prices rose modestly across all districts, most notably consumer prices of food, automobiles and appliances increased significantly. 


The largest FX pair gainer of the week was the NZD/USD which gained 1.26% or 83 pips. Looking at a daily chart of the NZD/USD, a diamond continuation pattern is taking shape. The preference is for a break to the upside which would signal a continuation of the uptrend that started back in March at the pandemic lows. A break above 0.6795 resistance would be the signal bulls are waiting for. However, a break below 0.6485 support would be a bearish signal with a decline to the next major support level likely at 0.638. 



Source: GAIN Capital, TradingView

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