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The euro continues to remain weak against the U.S dollar, following solid U.S economic data, and another bearish technical weekly price-close. The EURUSD pair is currently trading just above the key 1.1610 support level, after again being swiftly rejected from its 200-week moving average, located at 1.1670. Euro traders now await a raft of economic data coming out from the Eurozone this morning and the start of the Eurogroup meetings from Luxembourg.

The EURUSD pair remains strongly bearish while trading below the 1.1640 technical level. Further intraday selling towards 1.1573 and 1.1510 levels remains most likely, while price-action holds below the 1.1640 level.

Should price-action move above the 1.1640 level for a sustained basis, further upside towards the 1.1670 and 1.1690 remains most likely.

The U.S dollar has moved sharply higher against the Japanese yen, hitting 114.73, as Asian investors reacted to Friday's solid NFP job report from the United States. Price-action has now pulled back towards 114.35 support region, following the Bank of Japan Meeting Minutes. The Meeting Minutes showed no change in fiscal policy, however, Goushi Kataoka, a new member of the policy board, dissented and argued against the BOJ's view that current policy is sufficient to meet its target.

The USDJPY pair remains intraday bullish while trading above the 114.24 level. Further upside towards the 114.50 and 114.75 technical level should occur while price-action holds above 114.24.

Should price action decline below the 114.24 level for a sustained period, further intraday losses towards the 113.89 and 113.57 support levels remains likely.

Europe will move the markets on Monday, as investors get set to digest a flurry of economic data from the currency region.

Activity begins at 07:00 GMT with a report on German factory orders. Factory output in Europe’s largest economy is forecast to drop 1.5% in September, after rising 3.6% the previous month.

The Swiss government will report on consumer inflation at 08:15 GMT. The monthly report is expected to show a 0.2% increase in October, following a similar gain the previous month. This likely translates into an annualized gain of 0.8%.

Investors can also expect multiple PMI reports courtesy of IHS Markit. The research group will report on Italian, French, German and Eurozone services activity between 08:15 GMT and 0:9:00 GMT. The monthly reports will also include the Composite PMI indicator, which gauges manufacturing and services activity. Germany’s Composite gauge is expected to show a reading of 56.9. The euro area Composite indicator is expected to come in at 54.9.

At 09:30 GMT, Sentix will release its investor confidence index. The monthly gauge is expected to show an increase to 30.8 in November from a reading of 29.7 the previous month.

Meanwhile, a report on Eurozone inflation will make headlines at 10:00 GMT. The monthly producer price index (PPI) is expected to rise 0.4% in September, translating into a 2.8% year-over-year gain.

Shifting gears to North America, US Federal Reserve Chairwoman Janet Yellen will deliver a speech at 13:00 GMT. Yellen will be replaced by Fed Governor Jerome Powell as Chair of the US central bank next February.

New York Fed President William Dudley will also deliver a speech at 17:00 GMT.

Earlier in the day, the Reserve Bank of New Zealand (RBNZ) reported a slight downtick in inflation expectations. Third quarter inflation expectations slipped to 2% annually, official data showed. That’s down from 2.1% the previous month.

EUR/USD

The euro was practically motionless on Monday, as market participants awaited key economic data. The EUR/USD exchange rate was last seen trading at 1.1612, where it was little changed compared with the previous close. The euro is vulnerable to further weakness but continues to trade in a narrow range.

GBP/USD

Cable was little changed on Monday, as a dearth of market-moving developments kept investors on the sidelines. The GBP/USD exchange rate continues to hold above 1.3000, with upside limited to 1.3111, which is the high from Friday.

NZD/USD

The New Zealand dollar fell against the greenback on Monday, as investors digested the latest inflation figures. The NZD/USD was down 0.2% at 0.6890, extending a three-week downtrend that has wiped more than 300 pips from the pair. The pair is expected to fall even further as the RBNZ remains on hold with respect to monetary policy while the Federal Reserve signals for higher rates. The NZD/USD faces immediate support at 0.6820. On the opposite side of the ledger, resistance is located at 0.6992.

EURGBP (0.8880): The EURGBP which posted strong gains on Thursday on the back of the BoE's rate hike was seen giving up some of the gains. EURGBP could be seen pushing lower as price action approaches the breached resistance and support level near 0.8867 - 0.8857. Establishing support at this level will suggest renewed bullish momentum to the upside. The next main target for EURGBP comes in at 0.9016. However, in the event that EURGBP slips below 0.8857, the bias could turn bearish as EURGBP risks pulling down lower towards 0.8778.

USDJPY (114.26): The USDJPY closed with a doji candlestick pattern on the daily chart on Friday. This comes near the resistance level of 114.31 - 114.07. Price action has been struggling to break out from this resistance level in the past few sessions but with little success. On the 4-hour chart, the inverse head and shoulders pattern was, however, validated as USDJPY broke out above 114.24. As long as this price level holds, USDJPY could be seen pushing higher. A close below 114.24 on the intraday basis could, however, signal the sideways momentum to continue.

EURUSD (1.1609): The EURUSD closed on a bearish note on Friday. The bearish engulfing pattern formed on the daily chart could suggest further downside momentum. On the 4-hour chart, price action has broken out from the bearish flag pattern. However, the EURUSD will be seen testing the previous lows near 1.1573. A break down below this low will indicate further declines in price. Alternately, if support is established higher, EURUSD could remain range bound and potentially invalidating the bearish outlook.

The US dollar closed last Friday on a stronger note as the US nonfarm payrolls showed a rebound. The US economy was seen adding 261k jobs during October with September and August payrolls numbers being revised higher as well. The unemployment rate fell to fresh lows at 4.1%, but average hourly earnings remained muted. The ISM non-manufacturing PMI was seen rising to 60.1, beating expectations of 58.5.

Earlier today, the New Zealand inflation expectations data showed that consumer prices were seen rising 1.87% for this year. For the next two years, the forward looking inflation expectations data showed that headline consumer prices are expected to rise 2%. The data comes ahead of this Wednesday's RBNZ monetary policy meeting.

The economic calendar is light today with only the Canadian Ivey PMI data coming out. The FOMC member Dudley is expected to speak later in the day. Data from the Eurozone is quiet with the services PMI numbers due for release.

Saudi Arabia's Crown Prince Mohammed bin Salman's detaining of many prominent citizens this weekend pumps oil even higher from Friday's impressive session.

Oil rocketed higher on Friday as the markets negotiated the Non-Farm Payrolls without incident and concentrated on tightening global supplies, ignoring overbought technical indicators. Crude maintained the positive tone in early Asian trading after the Saudi Arabian bombshell over the weekend with multiple arrests of various Princes, Ministers and prominent businesspeople on suspicion of corruption. Crown Prince Mohammed bin Salman is wasting no time in yet another new role as the head of the anti-corruption commission. This Arabian night of the long knives has unsettled markets this mo0rning and should ensure that crude maintains a bid tone over the start of the week.

Brent crude soared 2.30 % on Friday to close at 62.35 and has settled another 0.20% in Asia following an initial spike to 62.60. This provides initial resistance for Brent with the charts showing no more resistance until 66.00 should it break. On the downside, Brent has a triple daily bottom at 60.10 which is crucial support. Trendline support at 58.50 follows it.

WTI spot climbed an impressive 1.80 % to close at 55.55 on Friday. It has made further upside progress this morning, spiking to 55.80 on its open before settling back to a still positive 55.60. The technical picture suggests that the way is now clear for a run at the 2015 highs around 61.50 although it must negotiate an area of congestion between 57.50 and 60.00 along the way. Support is somewhat distant at a daily triple bottom at the 53.70 area followed by trendline support at 53.10.

Oil prices continued to march higher on both sides of the Atlantic early Monday. In the early trading hours, Brent reached a high of $62.44, a level last seen in July 2015, and represents a 40.8% surge from June's lows. There's no doubt that OPEC and co. have been a major influencer of the most recent rally, but oil traders have a new political risk to consider, in the coming days and weeks. The anti-corruption crackdown in Saudi Arabia resulting in the arrest of 11 princes, and dozens of senior officials, led many traders to question how oil prices will be affected.

Given that OPEC's strategy is unlikely to change, and the 1.8 million barrels a day production cuts will be extended when the organization meets on 30 November, fundamentals remain supportive for high prices. The last thing Saudi may be thinking of is returning to the market share battle, as prices above $60 provide great support for the listing of Aramco in 2018 and these prices are essential for the Kingdom's economic transformation plans. From the demand side, the outlook is also positive, with the global synchronized economic growth at its strongest levels since the financial crisis. The critical question now, is how the political situation develops from here. I think current market fundamentals justify a price of $60 - $62, but any further extension in the rally, would likely be an additional political risk premium.

The response from the U.S. shale industry is of great importance at the current stage. Exports from the U.S. have risen to a record 2.13 million bpd in the week through 27 October according to EIA, and after five consecutive weeks of falling rig counts, are we going to see a reversal due to the rising oil prices? Most probably. As we approach $60 for WTI most of the U.S. shale companies will become profitable, and such additional output, will put a limit on any price gain.

The backwardation in Brent has fueled speculative long positions to benefit from rolling over future contracts. However, given net long positions have reached record highs, a short squeeze will likely pressure prices despite the geopolitical risk premium.

Overall, I think prices are currently approaching the higher end of the trading range for the rest of the year, and will be looking for a mean reversion towards or below $60 in the weeks to come

Key Highlights

• The Euro failed to recover this past week near 1.1680 against the US Dollar and declined.
• There was a break below an ascending channel with support at 1.1630 on the 4-hours chart of EUR/USD.
• This past Friday, the US nonfarm payrolls number for Oct 2017 was released, which posted 261K versus the 310K forecast.
• Today, the Euro Zone's Services PMI for Oct 2017 will be released, which is forecasted to remain at 54.9.

EURUSD Technical Analysis

The Euro started a recovery from the 1.1575 low against the US Dollar this past week. However, the EUR/USD pair failed near 1.1680, declined once again and is now back in the bearish zone.

During the upside correction, the pair traded above the 23.6% Fib retracement level of the last decline from the 1.1836 high to 1.1575 low. However, it faced a strong selling interest near 1.1680 and the 38.2% Fib retracement level of the last decline from the 1.1836 high to 1.1575 low.

It started declining and broke an ascending channel with support at 1.1630 on the 4-hours chart. The pair is now back in the bearish zone below 1.1640-50 and might continue to move down.

US Nonfarm Payrolls

The US nonfarm payrolls number for Oct 2017 was released by the US Department of Labor on this past Friday. The market was looking for a solid rise of 310K in jobs compared with the last decline of 33K.

The actual was 261K, which was below the forecast. On the positive side, the previous reading was revised from -33K to 18K. Moreover, there was a decline from 4.2% to 4.1% in the US unemployment rate.

The report added:

Since January, the unemployment rate has declined by 0.7 percentage point, and the number of unemployed persons has decreased by 1.1 million. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 369,000 to 4.8 million in

October.

Overall, the result was positive and weighed on EUR/USD for a downside reaction below 1.1640.

Economic Releases to Watch Today

German Factory Orders for Sep 2017 (MoM) – Forecast -1.5%, versus +3.6% previous.

Germany's Services PMI for Oct 2017 – Forecast 55.2, versus 55.2 previous.

Euro Zone Services PMI for Oct 2017 – Forecast 54.9, versus 54.9 previous.

Canada's Ivey PMI Oct 2017 (s.a.) – Forecast 60.2, versus 59.6 previous.