Last week, even though the FOMC statement was close to that of the last meeting, the hawkish forecasts and “dot plots” surprised markets. Some Fed members are now looking for an increase in rates by the end of 2022! Fed Chairman Powell will be testifying on Tuesday on “The Federal Reserve’s response to the coronavirus”. Traders will be eagerly watching for more information from the Fed. Following up the FOMC this last will be the Bank of England on Thursday.
The most important economic data next week will be:
On Monday, the Australian monthly Retail Sales and the ECB President Lagarde Speaks
On Tuesday, the US’s Fed Chair Powell Testifies due to testify on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis, via satellite.
Wednesday, the French, German, UK and the whole EU Flash Manufacturing and Services PMI will be released throughout the day. Later the monthly Canadian Retail Sales. Later on, the US will report its Flash Manufacturing and Services PMI and then the Crude Oil Inventories.
On Thursday, the UKs Monetary Policy decision and rates will be reported. Later in the day, the US’s quarterly Final GDP and Unemployment Claims will be announced.
Lastly, a generally quiet Friday again with the US reporting its monthly Core PCE Price index which is the change in the price of goods and services purchased by consumers, excluding food and energy. This differs from the Core CPI in that it only measures goods and services targeted towards and consumed by individuals. Later, the US’s Revised UoM Consumer Sentiment figure will be released.
Major Currencies Performance and Signals
EUR/USD
The euro dropped massively last week and its expected to be volatile for because of the next week Fed on Tuesday. We remain with a bearish bias because of the strength of the US Dollar.
FORECAST: SELL
Resistance: 1.1900, 1.1950, 1.2000
Support: 1.1850, 1.1800, 1.1750
GBP/USD
As expected, the British pound moved lower last week, and we expect the same in the next week with the eyes at the Fed Chairman Powell will be testifying on Tuesday on “The Federal Reserve’s response to the coronavirus”. We remain bearish.
FORECAST: SELL
Resistance: 1.3800, 1.3850, 1.3900
Support: 1.3750, 1.3700, 1.3650
AUD/USD
In the same trend, the Aussie finished the week with a bearish trend. We expect that next week the AUDUSD will carry on the bearish trend downwards with the Australian Retail Sales release.
FORECAST: SELL
Resistance: 0.7500, 0.7550, 0.7600,
Support: 0.7450, 0.7400, 0.7350
USD/JPY
The USDJPY finished the last week undecided on a future trend. We will have to see on the news front from the US if the pair is going to trend either bullish or bearish. Our outlook for this week is neutral.
FORECAST: NEUTRAL
Resistance: 110.50, 111.00, 111.50
Support: 110.00, 109.50, 109.00
USD/CAD
The Loonie rallied considerably against the Canadian dollar during the week, violating above the key 1.2450 price level. We expect a bearish pullback and range bounding after that between 1.2200 and 1.2400-1.2350 range.
FORECAST: NEUTRAL
Resistance: 1.2500, 1.2550, 1.2600
Support: 1.2450, 1.2400, 1.2350
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