U.S. Dollar Touches a 7-Month High

U.S. retail sales rose more than forecast last month amid a surge in motor vehicle purchases and rise in discretionary spending, pointing to solid demand that reinforces anticipations of an interest rate hike from the Federal Reserve in December. In addition, data on Friday suggested an increase in inflation, with producer prices rising widely in September to record their highest year-on-year expansion since December 2014.

Gold prices fell strongly on a strong USD and amid concerns over the possibility of an interest-rate increase by the end of the year. The U.S. dollar index touched new highs last Friday for a second consecutive week, posting 7-month highs and settling above 98 pips.

Gold settled at $1,250 and could re-test $1,260 but it is unlikely to break such levels due to lack of economic data being released.

Euro failed to settle at $1.10 vs. USD. The single currency is awaiting the Eurozone's inflation rate, which is expected to be 0.4% in September. In addition, ECB President Mario Draghi will speak at an event in Frankfurt later on today.

In this manner, the single currency could meet the support of $1.0960 and could decline further to $1.0760.

GBP settled below $1.22 at the end of last week’s trading session. Technically, cable could decline further to $1.20 during the course of the week.

Oil prices fell slightly, negatively affected by a rising of the U.S. rig count and a strong dollar. Technically, U.S. crude could be strongly supported by $50 and settle above $52 and $53 during the coming period.

The most important economic events:

• EUR Euro-Zone Consumer Price Index (MoM) (SEP): (GMT: 11:00) – Medium – Forecast (0.4%) – Previous (0.1%).
• USD Industrial Production (SEP): (GMT: 15:15) – Medium – Forecast (0.2%) – Previous (-0.4%).
• USD Manufacturing (SIC) Production (SEP): (GMT: 15:15) – Medium – Forecast (0.1%) – Previous (-0.4%).
• NZD Consumer Prices Index (YoY) (3Q): (GMT: 23:45) – High – Forecast (0.1%) – Previous (0.4%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.