WEEKLY REVIEW: Markets were driven by speculations this week

Two speculations were in focus this week: speculation that the Fed will start raising its interest rate in December and speculation that the European Central Bank (ECB) will add further stimulus measures next month.

The Fed released its latest monetary policy meeting minutes on Wednesday. The Fed said that an interest rate hike in December is possible, but it will depend on the incoming economic data. The U.S. economic data remained mixed. The U.S. consumer price inflation slightly rose in October, while the industrial production dropped.

I think that Fed officials are awaiting the release of the personal consumption expenditures (PCE) price index, the Fed's preferred measure of inflation, next week and the release of the November labour market data on December 04. If this data meets expectations or is better than expected, the Fed will likely hike its interest rate in December.

The ECB President Mario Draghi said today that the ECB is ready to use "all the instruments" to boost inflation in the Eurozone, adding that the inflation in the Eurozone should be raised "as quickly as possible".

Comments by several officials also suggest that the ECB is likely to add further stimulus measures in December.

The foreign exchange market is likely to remain volatile as market participants will continue to look for further clues for the Fed's and ECB' monetary policy.

It is likely that the currency pair EURUSD will test the resistance level at $1.0763 or at $1.0800, if the U.S. economic data will negative and there will be no negative news from the Eurozone.

If the U.S. economic data is positive and in case of the negative news from the Eurozone, the currency pair EURUSD may test the low of April 14 at 1.0531 or the low of March 13 at $1.0461.