In the spotlight last week, he had the Central Banks, like the Fed and BoE sending dovish messages to the market. The Fed Chair Powell be under scrutiny as he testifies before Congress, and the UK releases key consumer inflation and spending reports.
The FOMC policy meeting was largely dovish, with policymakers repeating that the Fed has no plans to raise interest rates before the year 2023. Nevertheless, the growth estimation was optimistic, as the US recovery shows signs that is paying off.
In the Eurozone inflation headline showed 1.1% and the core reading at 0.9%, reinforcing the preliminary forecast. ECB President Christine Lagarde said that the bank would not respond to inflation volatility as Inflation has been moving higher recently.
Currencies that are impacted by Commodities were tested by the weak performance in equities, even though their decreases against the US Dollar were limited. Gold rose in advance of the weekly close, settled down at $1,744 a troy ounce, while crude oil prices also increased a tad at the end of the week.
Next week in the US, a number of secondary indicators are going to be announced starting on Wednesday’ Markit PMIs for March alongside durable goods orders for February. On Friday, personal income and spending and the core PCE price index for February will be released.
In the EU, still in a lockdown, the recovery fund money still hasn’t been allocated, and the vaccine rollout has been a disaster with a negative coverage of the AstraZeneca vaccine. The PMI measures on Wednesday are considered important as they will give investors a idea of how the EU performed in March and whether the difference with US carries on. Forecasts point to an increase in both the manufacturing and the services numbers.
In the UK, unemployment data for January will be anticipated by traders on Tuesday, inflation measures for February are out on Wednesday together with the preliminary PMIs for March, before finally retail sales for February are released on Friday.
EUR/USD
The pair has pin ponged around in the same range during the week as we continue to see the 1.20 level as resistance and the 1.18 region as support.
We believe this is going to continue in the next week as we don’t see any clear trend
FORECAST: NEUTRAL
Resistance: 1.1950, 1.2000, 1.2050
Support: 1.1900, 1.1850, 1.1800
USD/CAD
The Loonie was down slightly last week. There are no Canadian economic releases in the upcoming week. The US stimulus package has been approved by Congress and should stimulate the economy, which is bullish for the US dollar.
FORECAST: LONG
Resistance: 1.2550, 1.2600, 1.2650
Support: 1.2500, 1.2450, 1.2400
GBP/USD
The Cable had the same story with the EURUSD pair as it traded in between the 1.3950 resistance to the 1.3850 support.
We believe this is going to continue the next week depending on news coming from the US.
FORECAST: SHORT
Resistance: 1.3900, 1.3950, 1.4000
Support: 1.3850, 1.3800, 1.3750
AUD/USD
The Australian Retail Sales missed expectations in February, according to preliminary estimates.
The weakness of global indexes and higher US Treasury yields weighed on the Aussie.
AUDUSD has limited bearish potential, corrective decline likely once below 0.7690.
FORECAST: SHORT
Resistance: 0.7750, 0.7800, 0.7850
Support: 0.7700, 0.7650, 0.7600
NZD/USD
The Kiwi has had a tough week, as we are starting weakness in the recent uptrend. If we break down below the 0.7100 support, then it is likely that the market could drop quite a bit and go looking towards the 0.6800 handle underneath where the next support level is found on the longer-term charts. In the alternative scenario, I would anticipate trading in the same range we had been in over the last couple of weeks.
FORECAST: SHORT
Resistance: 0.7200, 0.7250, 0.7300
Support: 0.7150, 0.7100, 0.7050
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