Last week, saw the strongest rise in the value of the Australian dollar and the strongest drop in the value of the Japanese yen. Volatility in the Forex market soared sharply after the FOMC release last Wednesday.
The Fed caught markets last week, releasing chaos after it hinted that the age of cheap money is coming to an end. The US economy is solid thanks to the spending stimulus, with consumption soaring and inflation increasing dangerously.
The main event of the week will be the US Nonfarm payrolls that are expected to come at 675k, pushing the unemployment rate lower. Usually this would be a great number, but anything below 1 million is unlikely to cause market to panic about a Fed tightening.
The most important economic data next week will be:
On Tuesday, the US CB Consumer Confidence will be released which is a survey of financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity
Wednesday, EU will release its inflation yearly estimates with the CPI. Later the US ADP Non-Farm Employment Change, the Chicago PMI and the monthly Pending Home Sales.
On Thursday, Canadian banks will be closed in observance of Canada Day. The German Final Manufacturing and the US Unemployment Claims and ISM Manufacturing PMI will be released.
Friday the most important figure of the month the US NFP which will certainly shake the on-holiday markets. Also, earlier investor will be watching ECB President Lagarde Speech.
Major Currencies Performance and Signals
EUR/USD
EURUSD had a down week last week but still ranging between the 1.1950 and 1.1900 price channel. The pair is expected to have a bearish bias next week but always wary of the NFP number on Friday.
FORECAST: SELL
Resistance: 1.1950, 1.2000, 1.2050
Support: 1.1900, 1.1850, 1.1800
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 US NFP This Friday.
FORECAST: SELL
Resistance: 1.3900, 1.3950, 1.4000
Support: 1.3850, 1.3800, 1.3750
AUD/USD
The Aussie recovered from a bad last week and is on track to surpass the 0.7600 price line again. We expect the trend to be bullish this week.
FORECAST: BUY
Resistance: 0.7600, 0.7650, 0.7700,
Support: 0.7550, 0.7500, 0.7450
USD/JPY
As expected, the USDJPY finished the last week ranging. We will have to see on the news front from the US NFP if the pair is going to trend either bullish or bearish. Again, our outlook for this week is neutral.
FORECAST: NEUTRAL
Resistance: 111.00, 111.50, 112.00
Support: 110.50, 110.00, 109.50
USD/CAD
The Loonie finished undecided last week, a concurring trend from last week. The USDCAD pair is depended a lot on Crude Oil so investors will be wary of any announcements coming from the OPEC meetings and Crude oil Inventories this week.
FORECAST: NEUTRAL
Resistance: 1.2300, 1.2350, 1.2400
Support: 1.2250, 1.2200, 1.2150
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