Last week in the US It was another strong week for stocks, with equities continuing the rally from the prior week that triggered shortly after the FOMC rate hike. Global bond sell-off deepened and the US yield curve continued to flatten. There are early signs that consumer sentiment has deteriorated clearly since the Russian assault started, and rising inflation puts pressure on private consumption.
Next week on the economic data focus will be on the Russia-Ukraine conflict but also the US NFP’s:
On Tuesday, the US will release its JOLTS Job openings and CB Consumer Confidence.
On Wednesday the day starts with the New Zealand’s ANZ Business Confidence and in the afternoon with the US ADP Non-Farm Employment Change, quarterly Final GDP and Crude Oil Inventories.
Thursday all day the OPEC-JMMC Meetings will be held and late on the Canadian monthly GDP, monthly US Core PCE Price Index, Unemployment Claims and Chicago PMI.
On Friday the most important number of the month the US NFP Employment Change and Unemployment Rate will be released. Later, the US ISM Manufacturing PMI will also be announced.
Major Currencies Performance and Signals
EUR/USD
The EUR fell a bit last week as we continue to see the downtrend play out. Eventually, this is a market that I think will drag down towards the 1.085 level.
FORECAST: SELL
Resistance: 1.1000, 1.1050, 1.1100
Support: 1.0950, 1.0900, 1.0850
GBP/USD
The British pound headed higher last week but has also given back quite a bit of the gain. We expect that the GBP will go down due to continued risks and no resolution in the horizon of the Russian-Ukrainian war.
FORECAST: SELL
Resistance: 1.3200, 1.3250, 1.3300
Support: 1.3150, 1.3100, 1.3050
AUD/USD
The Aussie rallied considerably last week to reach the 0.75 level. This is an area that has been very difficult for markets to overcome for quite some time, so it should not be a huge surprise that we have stopped right there.
FORECAST: BUY
Resistance: 0.7550, 0.7600, 0.7650
Support: 0.7500, 0.7450, 0.7400
USD/JPY
USD/JPY has risen 400 points in the past week as the US/Japan rate differential exploded wider. The BoJ and MoF have tried to talk them down with limited success. We are neutral on USDJPY this week.
FORECAST: NEUTRAL
Resistance: 122.50, 123.00, 123.50
Support: 122.00, 121.50, 121.00
USD/CAD
Last week the Loonie broke below confluent support via the trend-line from June, the 200-day moving average, and the emphatic low created on March 3 at 12586. This has brought in even more selling on top of what was occurring prior to the breakdown.
FORECAST: SELL
Resistance: 1.2500, 1.2550, 1.2600
Support: 1.2450, 1.2400, 1.2350
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