In the most recent trading week ended October 13, the dollar continued its bull run on the foreign exchange market partly due to expectations on U.S. monetary policy, despite more smoke than fire in the government's policies. However, though the strength of U.S. jobs data and the Consumer Price Index release was notable from the previous week, the increase in the number of new unemployment insurance claims would then trigger bearish momentum in the dollar.

The EURUSD and GBPUSD demonstrated a downtrend through the week, affected by dollar strength.

Let's review the market movements through the week.

October 7 (Mon)
In the U.S. employment statistics released the previous Friday, the number of non-farm payrolls exceeded expectations, demonstrating strength in the U.S. economy, and this led to bull supremacy in the dollar, sending the USDJPY as high as the low 149 range.

As the week opened after this trend, though the USDJPY began trades in the upper 148 yen range, it would tick nervously downward to the lower 148 range.

October 8 (Tue)
On Tuesday, the USDJPY temporarily fell to the low 147 range from Tokyo trading hours into London trading hours. However, some buying pressure on the lower end of the range sent the pair back up to close above 148.

October 9 (Wed)
Into the following morning, the minutes of the Federal Open Market Committee (FOMC) were released, and as expectations of a significant interest rate cut receded, dollar buying strengthened again.

The minutes revealed that several members supported a 25 basis point interest rate cut, leading to a more pervasive view that the pace of future interest rate cuts would be a gradual one. These fundamentals put traders in bull mode, sending the USDJPY up once again to the lower 149 range.

October 10 (Thu)
Newly-released minutes from the European Central Bank (ECB)'s Governing Council hinted at the possibility of a rate cut in October, putting the EURUSD in a downtrend. The EURUSD would fall again to 1.09.

In addition, the U.S. Consumer Price Index (CPI) for September was released, and the results were slightly better than expected, with a 0.2% month-on-month increase versus a 0.1% forecast and a 2.4% year-on-year increase versus a forecast of 2.3%. In contrast, the USDJPY fluctuated wildly as the number of new unemployment insurance claims in the U.S. increased much more than expected.

October 11 (Fri)
Although the U.K.'s GDP for August was 0.2% higher than the previous month, as expected, the GBPUSD did not appreciate significantly amid lingering concerns about the U.K. economy. The GBPUSD has continued to be weighed down by dovish comments from Bank of England (BOE) Governor Andrew Bailey.

In addition, the U.S. September PPI was 0.0% month on month, lower than the forecast of 0.1%, indicating a decline in inflationary pressure.

Economic Indicators and Statements to Watch this Week
(All times are in GMT)

October 17 (Thu)
09:00, Europe: September Harmonised Index of Consumer Prices (revised HICP)
09:00, Europe: September Harmonised Index of Consumer Prices (revised HICP, core index)
12:15, Europe: European Central Bank (ECB) Governing Council policy interest rate announcement
12:30, U.S.: September retail sales
12:30, U.S.: September retail sales (excluding automotive)
12:45, Europe: Regular press conference by European Central Bank (ECB) President Christine Lagarde
23:30, Japan: September Consumer Price Index, Japan (CPI, all items)
23:30, Japan: September Consumer Price Index, Japan (CPI, all items less fresh food)
23:30, Japan: September Consumer Price Index, Japan (CPI, all items less fresh food and energy)

The following currency pair charts are analyzed using an overlay of the ±1 and ±2 standard deviation Bollinger Bands, with a period of 20 days.

The USDJPY has snuck up on the milestone of 150 with little fanfare, reaching a point where it may be better to keep an eye on comments from Bank of Japan officials.

Next is an analysis of the USDJPY daily chart.

The pair is on pace to test the high it reached before falling sharply in August. From this point, there is a great possibility of overall trend divergence based on whether it results in a further rise beyond this high or falling back.

The daily chart shows an upward-tilting middle line, with the pair in a bandwalk between the +1 and +2 standard deviation Bollinger Band and showing the potential for strong bullish pressure in the near term.

A quick move to capture a breakout above 149.38 would be wise, but buying on dips also offers benefits in the expectation that this line will turn from resistance to support.

We continue with an analysis of the USDJPY weekly chart.

The pair has concluded its descending bandwalk to stay above the -1 standard deviation Bollinger Band with a positive candle, even if with a long whisker.

The weekly chart appears to be leaning in a bullish direction.

With the dollar strengthening, and there being no fundamental factors supporting euro bulls, it is possible that selling pressure will increase for this pair.

Next is an analysis of the EURUSD daily chart.

The pair has stayed clearly below the 1.10 mark after leaving a double-top neckline, now beginning a descending bandwalk.

Short trades appear simple and effective.

We continue with an analysis of the EURUSD weekly chart.

The pair has fallen further after breaking below the +1 standard deviation Bollinger Band, reaching the middle line. Contrary to its USDJPY cousin, we can see that bears are dominant.

Like the EURUSD, the dollar is strong and there are no buy-side fundamentals working in the pound's favor, so this pair is expected to favor the downside as well.

Now, we analyze the daily GBPUSD chart.

Since 1.3044 was the starting point for the most recent rise, a break below this level will make further drops a nearly assured outcome, a sell signal as dictated by Dow theory.

We continue with an analysis of the GBPUSD weekly chart.

If the support line around the 1.3 milestone is broken, short trades may be a winning option in the expectation of the support line turning into a resistance.