Forex Market Update - page 13
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Weekly Forex Update
The highlight of the week was the US Federal Reserve’s interest rate decision which was maintained status quo in wake of recent global economic and financial pressures that have threaten the US economy growth. The Fed, after a two-day meeting of its policy-making committee, scaled back its interest rate guidance to just two rate rises in 2016, lower than the four it had mentioned after the December FOMC meet. However, the Fed noted that the nation’s labor market was strengthening and the economy had continued to chug at a moderate pace despite facing risks from an uncertain global economy and financial markets. Meanwhile, the central bank expects US consumer prices to reach the 2% target in two to three years but trimmed its estimate of GDP growth in 2016 to 2.2% from 2.4%.
US macroeconomic data showed that the core consumer price index unexpectedly managed to tick higher on a yearly basis in February, adding to signs that inflation is moving closer to the Fed’s target. On the other hand, consumer prices on a monthly basis fell in the same month, largely due to a slide in gasoline prices. Meanwhile, retail sales in the country declined less than anticipated in February, suggesting that the economy remained on solid ground. Another set of data showed that industrial production in the US contracted more than forecasts, as untimely warm weather and the energy sector’s slump weighed on the industrial production. Separately, housing starts in US climbed more than expected on a monthly basis in February, reaching its highest level since September.
The Euro ended the week on a stronger footing, after the final estimate of the Euro-zone’s core consumer prices were revised upwards on a yearly basis in February. On the other hand, year on year price growth remained in negative territory in the same month, way below the ECB’s 2% target, raising concerns about the health of the Eurozone economy. Meanwhile, industrial production in the region bounced back strongly on a monthly basis in January, notching its highest rate since January 2010.
The BoE kept the key interest rate unchanged at a historic low of 0.5%, dashing speculation that the one or more of the nine-member Monetary Policy Committee (MPC) could be moving towards a first rate hike. Also, the central bank board members unanimously agreed to keep its bond-buying scheme intact at £375 billion. Additionally, the minutes of the BoE’s recent policy meeting indicated that the growing uncertainty over a “Brexit” has significantly contributed in recent decline in the value of the Pound and could hit economic demand.
EURUSD
During the previous week, the EUR traded 1.08% higher against the USD and ended at 1.1271, after Eurozone’s consumer price inflation rose more than anticipated on a monthly basis and core consumer price inflation also advanced on a yearly basis in February. Additionally, Eurozone’s industrial production rose more-than-expected on a monthly basis in January, led by increased output of capital goods, such as equipment and machinery, growing at its fastest rate in more-than six years. Moreover, employment in Eurozone increased on a quarterly basis in fourth-quarter of 2015. However, annual inflation remained weak in the same month. Meanwhile, construction activity in the region registered a rise in nearly four years, while the trade balance declined in January. The pair traded at a high of 1.1343 and a low of 1.1058 during the previous week. The pair is expected to witness its first support at 1.1104 and second support at 1.0938, while the first resistance is expected at 1.1390 and second resistance at 1.1509. This week, investors would keep an eye on the manufacturing and services PMI data across the Euro-zone to gauge the strength in the European economy. Additionally, the ZEW survey of consumer sentiment in Eurozone and Germany will also be eyed by investors.
GBPUSD
The GBP advanced against the USD last week, closing 0.71% higher at 1.4475. The BoE opted to keep benchmark interest rate unchanged at 0.5%, after all nine members of the Bank's Monetary Policy Committee (MPC) voted to keep rates at their record low. Meanwhile, the BoE minutes of its latest monetary policy meeting showed that increased uncertainty in the run up to the referendum on UK’s membership in the EU had weighed on the Pound and could slow the nation’s economic growth. In other economic news, Britain’s unemployment rate held steady at 5.1% in the three months ended January, the lowest level since 2006 and weekly earnings edged up more than expected as the labor market continued to improve. The GBP hit a high of 1.4516 and a low of 1.4053 against the USD in the previous week. The pair is expected to find support at 1.4182, and a fall through could take it to the next support level of 1.3886. The pair is expected to find its first resistance at 1.4644, and a rise through could take it to the next resistance level of 1.4811. Looking ahead, investors would keep a close eye on UK’s consumer prices as well as retail sales data. Also, the nation’s mortgage approvals and public sector net borrowing data would also grab market attention.
USDJPY
Last week, the USD traded 1.99% lower against the JPY and closed at 111.55. The BoJ decided to keep its monetary stance unchanged, despite risks to the nation’s economic growth. The central bank downgraded the economic as well as inflation expectations and admitted that pick-up in exports had paused, mainly due to the effects of the slowdown in emerging economies, opening the door to further action in months ahead to ignite growth. Separately, the BoJ minutes of its January policy meeting indicated that board members had a debate on whether to adopt negative interest rate policy or to expand the massive asset-buying programme and eventually decided to implement the former option. The decision to adopt negative rates was passed by a 5-4 vote. Macroeconomic data released during the week showed that industrial production in Japan contracted again while the tertiary industry index rebounded stronger than expected on a monthly basis in January. The pair traded at a high of 114.15 and a low of 110.67 during the previous week. Immediate downside, the first support level is seen at 110.09, followed by 108.64, while on the upside, the first resistance level situated in 113.58, followed by 115.61. Moving ahead, market participants look forward to the release of Japan’s National consumer prices as well as the manufacturing PMI data. Investors would also monitor Japan’s coincident as well as leading economic indices data for further cues.
USDCHF
The USD traded 1.38% lower against the CHF last week, with the pair closing at 0.9691. The Swiss National Bank (SNB) left the benchmark interest rate unchanged at 0.75%, at par-with market expectations and maintained the target range for the three month Libor between -1.25% and -0.25%. The central bank indicated the Swiss franc continues to be slightly overvalued, while lowered the economic forecast and expected major deflation amid cheaper oil and slowdown in global growth. The State Secretariat for Economic Affairs downgraded Switzerland’s growth outlook as there was no clear sign of significant growth in global economy. The GDP is expected to grow at 1.4% this year down from 1.5% projected earlier and for 2017 cut the growth outlook to 1.8% from1.9%. The pair traded at a high of 0.9916 and a low of 0.9651 during the previous week. Immediate downside, the first support level is seen at 0.9591, followed by 0.9489, while on the upside, the first resistance level situated in 0.9855, followed by 1.0018. Going forward, investors this week would closely monitor Switzerland’s trade balance and the ZEW survey’s expectations for further direction in the Swiss Franc.
USDCAD
During the previous week, the USD traded 1.72% lower against the CAD and ended at 1.3003. In economic news, Canada’s annual inflation rate slowed to 1.4% in February down from 2.0% in January, mainly due to falling gasoline prices. However, core consumer prices on a monthly basis edged up while on a yearly basis it fell in February. Another set of macroeconomic data indicated that retail sales in the nation rebounded stronger than expected on a monthly basis, marking its biggest one-month gain in close to six years in January. Other economic data showed that Canadian manufacturing shipments rose more than anticipated on a monthly basis in January. Meanwhile, wholesale sales unexpectedly remained flat in the same period. During the previous week, the pair traded at a high of 1.3406 and a low of 1.2923. The pair is expected to witness its first support at 1.2816 and second support at 1.2629, while the first resistance is expected at 1.3299 and second resistance at 1.3594. Moving ahead, market participants would concentrate on Canada’s unemployment rate as well as building permits data for further direction in the CAD.
AUDUSD
During the previous week, the AUD traded 0.56% higher against the USD and ended at 0.7603. The minutes of the RBA’s recent monetary policy meeting showed that the board members saw reasonable prospects for continued growth in the nation but reiterated that prolonged low inflation would provide scope to ease monetary policy further, if needed. Meanwhile, the board members remained cautious on whether the Australian labor market can continue its improvement over the coming months. Macroeconomic data showed that Australia’s unemployment rate unexpectedly dropped back to 5.8% in February from 6.0% recorded in the preceding month, as fewer people looked for work, thereby suggesting that the underlying labor market conditions would keep the RBA on the sidelines for the time being. The AUD hit a high of 0.7682 and a low of 0.7415 against the USD in the previous week. Immediate downside, the first support level is seen at 0.7452, followed by 0.7300, while on the upside, the first resistance level situated in 0.7720, followed by 0.7835. Moving ahead, the RBA Governor, Glenn Stevens’ speech would be closely watched by the market participants. Additionally, the nation’s house price index would be on investor’s radar.
Gold
Gold rose last week, closing 0.48% higher at USD1255.40 per ounce, on the back of broad weakness in the greenback, after the Fed scaled back interest rate hike expectations at its recent FOMC meeting. The yellow metal hit a high of USD1271.90 per ounce and a low of USD1226.00 per ounce in the previous week. The yellow metal is expected to witness its first support at USD1230.70 per ounce and second support at USD1205.40 per ounce, while the first resistance is expected at USD1276.60 per ounce and second resistance at USD1297.20 per ounce.
Crude Oil
Crude oil strengthened in the previous week, closing 2.44% higher at USD39.44 per barrel, on renewed expectations, after Qatari oil minister, Mohammed Bin Saleh Al-Sada, stated that producers from within and outside the Organization of the Petroleum Exporting Countries (OPEC) will meet in April to discuss plans for a freeze in output. The Energy Information Administration (EIA) showed that US crude oil stocks advanced by 1.3 million barrels to 523.2 million barrels in the week ended 11 March, while the American Petroleum Institute (API) indicated that the nation’s oil inventories rose less than anticipated by 1.5 million barrels to 523.0 million barrels last week. The commodity traded at a high of USD41.20 per barrel and a low of USD35.96 per barrel in the previous week. The commodity is expected to find its first support at USD36.47 per barrel and first resistance at USD41.71 per barrel. The second support is expected at USD33.60 per barrel and second resistance at USD44.08 per barrel.
Good trades.
The greenback ended the week on a stronger footing, following hawkish remarks from the US Federal Reserve (Fed) officials supporting the case for an interest rate hike as soon as the next monetary policy meeting, scheduled for the end of April. Macroeconomic data released during the week showed that the final Q4 US Gross Domestic Product (GDP) was revised upwards to 1.4% from the initial estimate of 1.0% mainly supported by stronger personal spending on services. The report also showed that corporate profits dropped the most in seven years last year, highlighting that the US economy entered 2016 on uneven footing.
Another set of economic data indicated that durable goods dropped more than expected in February, with business investment dropping by the largest amount since December due to weak global economic growth, low oil prices and financial market turbulence. Meanwhile, services sector activity in the US recovered in March after falling into contraction territory for the first time in two years. However, data failed to eliminate doubts surrounding the economy, as momentum this year remains lackluster. On the other hand, the number of Americans filing for first time jobless benefits rose less than expected last week, as the figure remained consistent with a strong labor market. Also, new home sales in the US rebounded in February, highlighting a gradually improving real estate market.
The Euro lost ground against most of the major peers, as the Brussels attack overshadowed Germany’s Ifo and Euro-zone’s PMI survey data. Data showed that the German Ifo business climate index advanced for the first time in four months suggesting that domestic demand is shielding the Euro-zone’s largest economy from slowing global growth. Additionally, private sector activity in the Euro-zone improved in March, pointing that the economy has regained some momentum at the end of the first quarter. On the other hand, the Euro-zone’s ZEW economic sentiment index slightly fell in March but was better than market expectations.
The British Pound ended the week on a negative footing, due to uncertainty over Britain’s upcoming referendum on its membership in the European Union. The possibility of “Brexit” has increased, following the Brussels terrorist attacks earlier last week. On the macroeconomic front, consumer prices in the UK rebounded less than estimated on a monthly basis while on a yearly basis it remained unchanged in February, way below the central bank’s 2% target, providing another reason for the Bank of England to ‘stay on hold’ position for an extended period. Meanwhile, UK retail sales fell less than expected on a monthly basis in February, indicating that consumer demand remains relatively upbeat so far this year.
EURUSD
Last week, the EUR traded 0.91% lower against the USD and closed at 1.1169. In economic news, the Euro-zone’s Markit services and manufacturing PMI’s both advanced indicating that private sector activity picked up pace in March. Meanwhile, Eurozone’s current account surplus narrowed in January and the consumer confidence index fell for a third consecutive month in March, indicating draining optimism amongst consumers. In other economic news, in Germany, the Markit services PMI advanced in March, while the manufacturing activity unexpectedly weakened for the same month. Meanwhile, Germany’s ZEW economic sentiment index fell short of market expectations and the Euro-zone’s economic sentiment index dropped to a 15-month low in March, as uncertainty continue to remain over the economic outlook in emerging markets. The pair traded at a high of 1.1286 and a low of 1.1144 during the previous week. The pair is expected to find support at 1.1113, and a fall through could take it to the next support level of 1.1057. The pair is expected to find its first resistance at 1.1255, and a rise through could take it to the next resistance level of 1.1341. This week, investors would focus on the Euro-zone as well as Germany’s consumer price inflation data for further clues. Meanwhile, Germany’s unemployment rate and retail sales data along with Euro-zone’s inflation data would also be keenly watched by investors.
GBPUSD
Last week, the GBP traded 2.34% lower against the USD and closed at 1.4137, as UK’ inflation rate continued to stay at historically low levels. Data showed that the nation’s consumer price index remained steady on a yearly basis at 0.3%, far below the BoE’s inflation target of 2.0%. Meanwhile, consumer prices on a monthly basis climbed less than forecasts on a monthly basis in February, giving the BoE leeway to maintain key interest rate at a record low. Separately, retail sales in the nation declined less than expected on a monthly basis in February. The GBP hit a high of 1.4469 and a low of 1.4056 against the USD in the previous week. The pair is expected to find support at 1.3970, and a fall through could take it to the next support level of 1.3806. The pair is expected to find its first resistance at 1.4382, and a rise through could take it to the next resistance level of 1.4632. Looking ahead, investors will monitor UK’s 4Q gross domestic product and the current account data for further direction. Moreover, the nation’s net consumer credit and Markit manufacturing PMI will also grab significant market attention.
USDJPY
The USD traded 1.42% higher against the JPY last week, with the pair closing at 113.13. The Japanese Yen lost ground, after Japan’s manufacturing activity fell into contraction in March for the first time in almost a year, as output, new orders and exports all fell, suggesting that the Bank of Japan (BoJ) may soon see the requirement for further stimulus. Other economic data indicated that the all industry activity index rebounded at a faster than expected pace on a monthly basis in January, after registering a drop in the previous two months. Separately, the BoJ board member, Yukitoshi Funo, stated that the central bank will not hesitate to ease monetary policy again, if risks aggravate a fragile economic recovery. He also warned of a hit to Japanese exports and capital expenditure due to emerging market slowdown and volatile financial markets. The USD hit a high of 113.33 and a low of 111.21 against the JPY in the previous week. The pair is expected to witness its first support at 111.75 and second support at 110.42, while the first resistance is expected at 113.87 and second resistance at 114.66. Moving ahead, market participants look forward to Japan’s preliminary industrial production data and the final Nikkei manufacturing PMI reading for further cues. Also, retail trade as well as housing starts data would be on trader’s radar.
USDCHF
During the previous week, the USD traded 0.85% higher against the CHF and ended at 0.9773. On the macroeconomic front, Switzerland’s trade surplus expanded in February, from January. Meanwhile, the ZEW economic expectations index rose to a level of 2.5 in March from -5.9 in February. Another set of economic data showed that the M3 money supply in the nation edged up on a yearly basis in February. Last week, the KOF institute slashed Switzerland’s GDP growth to 1.0% in 2016 from an expansion of 1.1% projected earlier on the back of global economic weakness. Meanwhile, for 2017, the economic growth outlook was kept unchanged at 2.0%. During the previous week, the pair traded at a high of 0.9789 and a low of 0.9674. The pair is expected to witness its first support at 0.9703 and second support at 0.9631, while the first resistance is expected at 0.9818 and second resistance at 0.9861. Going forward, investors this week would closely monitor Switzerland’s real retail sales and the SVME PMI data to get better insights in the Swiss economy. Additionally, the nation’s UBS consumption and the KOF leading indices data would grab market attention.
USDCAD
The USD rose against the CAD last week, closing 1.98% higher at 1.3261, after the US economic growth was upwardly revised for 4Q15. Last week, according to a private research report, Canada’s economy is projected to expand at a rate of 1.9% in 2016 and by 2.0% in 2017. Meanwhile, the nation’s unemployment rate is projected to rise from 6.9% in 2015 to 7.4% and 7.3% in 2016 and 2017, respectively. During the previous week, the pair traded at a high of 1.3298 and a low of 1.3022. The pair is expected to witness its first support at 1.3094 and second support at 1.2919, while the first resistance is expected at 1.3370 and second resistance at 1.3472. Going forward, investors this week would keep a close watch on Canada’s GDP as well as on the RBC manufacturing PMI data for further direction in the CAD.
AUDUSD
Last week, the AUD traded 1.26% lower against the USD and closed at 0.7508. In economic news, Australian house prices rose by just 0.2% on a quarterly basis in 4Q15, compared to a rise of 2.0% in the previous quarter, indicating that the nation’s property market is showing signs of cooling. Market expectation was for the index to remain flat. Separately, the Reserve Bank of Australia Governor, Glenn Stevens, stated that tighter regulatory measures adopted to slow lending to investors have cooled house price growth in the Sydney and Melbourne housing property market. The AUD hit a high of 0.7651 and a low of 0.7477 against the USD in the previous week. The pair is expected to find its first support at 0.7439 and first resistance at 0.7614. The second support is expected at 0.7371 and second resistance at 0.7720. Moving ahead, market participants look forward to Australia’s AiG performance of manufacturing index and new homes sales data.
Gold
Last week, gold fell 3.05% to close at USD1217.05 per ounce, as the greenback strengthened, after hawkish comments from the US Fed officials raised speculation about the possibility for another increase in interest rates when policymakers gather next month. Gold hit a high of USD1262.20 per ounce and a low of USD1212.60 per ounce during the previous week. Immediate downside, the first support level is seen at USD1200.13 per ounce, followed by USD1181.57 per ounce, while on the upside, the first resistance level situated in USD1249.73 per ounce, followed by USD1280.77 per ounce.
Crude Oil
Last week, crude oil traded marginally higher and ended at USD39.46 per barrel, as major oil producers are preparing for the April meeting in Qatar where the output freeze deal should be discussed. Separately, the Energy Information Administration showed that US crude oil stocks expanded by 9.4 million barrels in the last week to 532.5 million barrels and the American Petroleum Institute indicated that oil inventories rose by 8.7 million barrels to nearly 532.0 million barrels in the week ended 18 March 2016, eroding hope of an ease in the supply glut. The commodity traded at a high of USD41.90 per barrel and a low of USD38.33 per barrel in the previous week. Crude oil is expected to witness its first support at USD37.98 per barrel and second support at USD36.37 per barrel, while the first resistance is expected at USD41.55 per barrel and second resistance at USD43.51 per barrel.
Good trades
The highlight of the week was the dovish comments by the Federal Reserve chair, Janet Yellen, after she emphasized that the US central bank should proceed carefully towards higher interest rates against the backdrop of global economic uncertainty including the slowdown in China and collapsing oil prices. Although, she admitted that the US economy remained resilient despite a rough start to the year, but suggested that chances of a rate hike in April are very dim. Meanwhile, Yellen’s remarks contrasted with the stance of some Fed officials, who in recent time have opined that the US economy was strong enough to warrant further rate hikes. Macroeconomic data released during the week indicated that the US non-farm payrolls beat market expectations in March and wages rebounded, shrugging off concerns of a global economic slowdown. However, the nation’s unemployment rate unexpectedly edged up to 5.0% in March, highlighting that slack remains in some corners of the US labor market. On the other hand, the US ISM manufacturing activity swung back to expansion territory for the first time in seven months at a better-than-expected pace in March. Meanwhile, the number of Americans applying for new unemployment benefits rose last week, but remained below a level that is associated with an improving labor market. On the contrary, US companies added more than expected in jobs March, supported by strong gains in construction, retail and shipping. The Euro ended the week on a stronger footing, after Germany’s inflation on a yearly basis climbed above zero in March, indicating that domestic demand as well as the ECB stimulus measures may be starting to boost price gains. However, inflation numbers remained far below the 2% inflation rate desired by the ECB. Meanwhile, core consumer prices in the Euro-region slightly edged up but the headline inflation rate remained negative on a yearly basis in March, suggesting that the ECB may unleash a new round of stimulus measures in the single-currency area. The British Pound ended the week in red, on continued fears of a possible UK exit from the European Union. Data released during last week showed that the UK economic growth unexpectedly quickened on an annual basis in the final quarter of 2015, pointing that the nation’s economy ended the year with a better than estimated outlook. Meanwhile, UK’s current account deficit sharply widened in the fourth quarter to hit a record high, underlining pressures from the global economic downturn. Also, UK’s manufacturing PMI remained subdued in March, as global growth continues to weigh on UK manufactures, indicating that the nation’s economic growth may run out of steam in the first quarter after showing a slight expansion in the previous quarter.
EURUSD
The EUR traded 2.03% higher against the USD last week, with the pair closing at 1.1395, after German consumer prices rose at a faster-than-expected pace on a monthly basis in March after remaining unchanged in the previous month. Other economic data showed that inflation in the Eurozone fell on an annual basis in March, thus remaining in the deflation territory. Meanwhile, the overall economic sentiment in the Eurozone fell to its lowest level in March since February 2015, amid lower confidence in construction and financial services sectors. Moreover, the consumer confidence remained steady at its lowest level in March since December 2014. Further, the sentiment in the services sector dropped in March and the industrial confidence fell to a thirteenth-month low in the same month. Other economic data indicated that manufacturing output in the Eurozone and in its peripheries rose higher than market expectations in March. Meanwhile, German retail sales unexpectedly dipped on a monthly basis in February. During the previous week, the pair traded at a high of 1.1439 and a low of 1.1153. Immediate downside, the first support level is seen at 1.1216, followed by 1.1041, while on the upside, the first resistance level situated in 1.1502, followed by 1.1613. This week, investors would focus on the Markit’s survey of services PMI across the Eurozone and Sentix investor confidence for further cues. Additionally, Germany’s industrial production, factory orders and trade balance will attract market attention.
GBPUSD
The GBP advanced against the USD last week, closing 0.62% higher at 1.4224, after UK’s economy expanded more-than-expected in the fourth quarter of 2015, marking the 12th consecutive quarter of positive growth since the first quarter of 2013. Moreover, the manufacturing activity rose slightly in the month of March, but is close to moving back into a state of contraction. In other economic news, UK’s GfK consumer confidence remained flat, staying at the lowest level in more than a year, amid fears that Britain might opt to leave the European Union. Further, the current account deficit widened more-than-expected in 4Q 2015, led by rising imports of goods, and declining goods exports. Moreover, the BoE Governor, Mark Carney warned of the challenges faced by global policymakers in low-nominal growth situations and further stated that loose monetary policy is not the alone solution. During the previous week, the pair traded at a high of 1.4461 and a low of 1.4121. Immediate downside, the first support level is seen at 1.4079, followed by 1.3930, while on the upside, the first resistance level situated in 1.4419, followed by 1.4610. Looking ahead, investors will look forward to UK’s NIESR gross domestic product estimate and Markit’s construction and services PMI for further direction. Moreover, UK’s official reserves, industrial, manufacturing production and total trade balance data will generate a lot of market attention.
USDJPY
The USD traded 1.26% lower against the JPY last week, with the pair closing at 111.71. On the data front, Japan’s unemployment rate rose in February, rising for the first time in three months. Further, industrial production declined the most on a monthly basis in February since 2011, underscoring Japan’s struggle to rebound from a negative growth at the end of last year. Other economic data showed that Japan’s manufacturing output contracted at the fastest pace in three years in March, due to new export orders shrinking sharply. During the previous week, the pair traded at a high of 113.82 and a low of 111.59. The pair is expected to find its first support at 110.93 and first resistance at 113.16. The second support is expected at 110.15 and second resistance at 114.61. Moving ahead, market participants look forward to Japan’s Nikkei services PMI, leading index, trade balance and consumer confidence index, all scheduled for release this week.
USDCHF
During the previous week, the USD traded 2.00% lower against the CHF and ended at 0.9578. In economic news, Switzerland’s UBS consumption indicator advanced in February, on the back of persistent and strong growth in private consumption. Moreover, the nation’s SVME Purchasing managers’ index climbed surprisingly in March. Meanwhile, the KOF leading indicator indicated eased less-than-expected in March. Additionally, real retail sales dropped for a consecutive seventh month on a yearly basis in February. During the previous week, the pair traded at a high of 0.9788 and a low of 0.9555. Immediate downside, the first support level is seen at 0.9495, followed by 0.9409, while on the upside, the first resistance level situated in 0.9727, followed by 0.9874. Going forward, investors this week would closely monitor Switzerland’s consumer price inflation data, foreign currency reserves and unemployment rate for further direction in the Swiss Franc.
USDCAD
The USD fell against the CAD last week, closing 1.88% lower at 1.3011. The CAD gained ground, after Canada’s GDP figure indicated that the nation’s economy expanded for a fourth consecutive month in January, following strong manufacturing output. Moreover, manufacturing activity in Canada rose for the first time in eight months in March. Meanwhile, the industrial product price index dropped more-than-expected in February. During the previous week, the pair traded at a high of 1.3287 and a low of 1.2857. Immediate downside, the first support level is seen at 1.2817, followed by 1.2622, while on the upside, the first resistance level situated in 1.3247, followed by 1.3482. Moving ahead, market participants would concentrate on Canada’s unemployment rate, international merchandise trade as well as building permits and housing starts data.
AUDUSD
Last week, the AUD traded 2.29% higher against the USD and closed at 0.768. On the economic front, Australia’s private sector credit growth climbed on a monthly basis in February. Moreover, manufacturing activity expanded in March notching its fastest pace of expansion in twelve years. The AUD hit a high of 0.7725 and a low of 0.7493 against the USD in the previous week. The pair is expected to find its first support at 0.7539 and first resistance at 0.7771. The second support is expected at 0.7400 and second resistance at 0.7864. Moving ahead, market participants will keep a close watch on the RBA’s interest rate decision, and retail sales as well as trade balance data. Further, traders will watch the AiG performance of construction and services indices data scheduled for the week.
Gold
Gold rose last week, closing 0.46% higher at USD1222.60 per ounce, amid a broad weakness in the greenback, as the Fed Chairwoman, Janet Yellen, remained dovish on future rate hikes in the US, increased demand for the precious yellow metal. However, gains in gold prices were kept in check, after a better-than-expected US jobs report signaled strength in the economy and bolstered speculation that the Fed could raise interest rates soon. Gold hit a high of USD1246.80 per ounce and a low of USD1207.70 per ounce during the previous week. The yellow metal is expected to witness its first support at USD1205.27 per ounce and second support at USD1186.93 per ounce, while the first resistance is expected at USD1244.37 per ounce and second resistance at USD1265.13 per ounce.
Crude Oil
Last week, crude oil traded 6.77% lower and ended at USD36.79 per barrel, amid persistent concerns over the crude supply glut after Kuwait and Saudi Arabia announced that they will resume oil production of 300,000 bpd at the jointly operated Khafji field. Oil prices remained in red, after the Saudi deputy crown prince, Mohammed bin Salman, stated that the kingdom will not freeze output unless Iran and other major producers do so, thus jeopardizing a production freeze agreement. Moreover, the US Energy Department reported that US crude oil inventories rose by 2.3mn bls last week to reach a new record high of 534.8mn bls and the American Petroleum Institute (API) reported that US crude inventories rose smaller than anticipated by 2.6mn bls last week. Crude oil hit a high of USD40.14 per barrel and a low of USD36.63 per barrel in the previous week. Crude oil is expected to witness its first support at USD35.46 per barrel and second support at USD34.29 per barrel, while the first resistance is expected at USD38.97 per barrel and second resistance at USD41.31 per barrel.
Happy pips.
Weekly Forex Update
Last week, the minutes of the Federal Reserve’s (Fed) recent monetary policy meeting indicated that an interest rate hike in April was unlikely because of global risks such as weaker growth in China and financial market volatility. There was a noticeable disagreement between members as some liked to keep open the possibility for a hike in April, while others argued that the central bank should proceed cautiously until the economy picks up steam. Separately, the Fed Chair, Janet Yellen, defended her decision of raising interest rates late last year, stating that the nation’s economic growth was making “substantial progress”. She further stated that the US labor market has strengthened and the nation’s inflation has moved up despite strong dollar and lower oil prices. Macroeconomic data released during the week indicated that factory orders in the US slipped more than expected for a third time in the last four months, amid weak global demand and a stronger local currency. Meanwhile, the ISM showed that growth at US services firm expanded at a faster than anticipated pace in March after a slowdown in the nation’s service activity in the prior two months. Also, the number of mortgage application in the US rebounded for the first time in four weeks in the week ended April 01. Moreover, the number of Americans filing for fresh jobless benefits increased less than forecast in the week ended April 02, indicating that the nation’s labor market continues to remain sound despite tepid economic growth.
The Euro ended the week on a stronger footing, on the back of stronger than expected retail sales data on a yearly basis, notching its fourth consecutive month increase in February, led by lower oil prices and a slowly falling unemployment rate. However, gains in the common-currency were kept in check, after the final estimate of the manufacturing as well as the services PMI fell short of consensus estimates in March. Additionally, German factory orders unexpectedly dipped on a monthly basis in February, highlighting that the region’s top economy is suffering from a cooling of global activity. Separately, the minutes of the European Central Bank’s (ECB) latest policy meeting showed that board members discussed the possibility of a sharper interest rate cut but eventually decided that a smaller one was appropriate, given the current economic assessment. However, future rate cuts also remain on the table.
The British Pound ended the week in red, following dismal industrial and manufacturing output data in the UK. The nation’s manufacturing production eased more than expected on a monthly basis in February and the industrial production also contracted in the same period. The weaker figures have raised concerns over the performance of the UK economy. Meanwhile, the UK think tanker, NIESR estimated that the nation’s economic growth slowed considerably in the first quarter amid Brexit fears.
EURUSD
Last week, the EUR traded marginally higher against the USD and closed at 1.1397, after Euro-zone’s retail sales grew for a consecutive fourth month in February. Also, Germany’s trade surplus increased more than anticipated in February, as exports rebounded strongly, indicating that Germany’s economic growth could accelerate in the first quarter. In other economic news, Eurozone’s Sentix investor confidence advanced marginally, but came in less than market expectations in April. Moreover, the region’s unemployment rate improved slightly to 10.3% in February, from 10.4% recorded in the prior month. Additionally, final estimate showed that services sector in the Euro-zone and in its peripheries expanded less-than-expected in March, highlighting an uphill task for the ECB to prop up the Euro economy. Meanwhile, German industrial output dipped in February, dragged down by weak manufacturing output. The pair traded at a high of 1.1455 and a low of 1.1327 during the previous week. The pair is expected to witness its first support at 1.1331 and second support at 1.1265, while the first resistance is expected at 1.1460 and second resistance at 1.1522. This week, investors would keep a watch on Eurozone’s industrial production, consumer price index and trade balance data for further cues. Additionally, Germany’s consumer price index will also attract market attention.
GBPUSD
During the previous week, the GBP traded 0.68% lower against the USD and ended at 1.4127, on the back disappointing manufacturing and industrial production data. The manufacturing production dropped more-than expected and the industrial activity eased unexpectedly on a monthly basis in February, thus both acting as a drag on the UK economy. Another set of data showed that UK’s construction activity remained unchanged in March from February, staying at its slowest rate for growth output since June 2013. Meanwhile, the services sector PMI edged up in March, after reaching its lowest level in nearly three years in the previous month. However, the sector still remained sluggish, due to slowing global economy as well as uncertainty over the upcoming EU membership referendum. The pair traded at a high of 1.4324 and a low of 1.4006 during the previous week. The pair is expected to find support at 1.3979, and a fall through could take it to the next support level of 1.3833. The pair is expected to find its first resistance at 1.4297, and a rise through could take it to the next resistance level of 1.4469. Looking ahead, investors will focus on UK’s consumer price inflation data, and the CB leading economic index for further direction. Moreover, the BoE’s interest rate decision will keep investors on their toes.
USDJPY
The USD traded 3.24% lower against the JPY last week, with the pair closing at 108.09. On the data front, Japan’s leading index eased for a fourth straight month in February, at par with market expectations and the coincident index fell at its fastest pace since March 2011 in the same month. Moreover, the Nikkei services PMI declined and recorded a nine-month low level in March. In other economic news, the nation’s trade balance on a BOP basis posted a surplus in February while the consumer confidence in Japan rose more-than-expected in March, indicating growing optimism in consumers regarding Japan’s economy. During the previous week, the pair traded at a high of 111.77 and a low of 107.67. The pair is expected to find its first support at 106.57 and first resistance at 110.67. The second support is expected at 105.07 and second resistance at 113.26. Moving ahead, market participants look forward to Japan’s machine tool order, industrial production data all scheduled for release this week.
USDCHF
Last week, the USD traded 0.53% lower against the CHF and closed at 0.9528. In economic news, Switzerland’s seasonally adjusted unemployment rate rose to 3.5%in March, from a level of 3.4% recorded in the previous month. Meanwhile, the consumer price inflation rose 0.3%, on a monthly basis in March, in line with market expectations It followed an advance of 0.2% in February. Additionally, foreign currency reserves also increased in March. During the previous week, the pair traded at a high of 0.9623 and a low of 0.9521. Immediate downside, the first support level is seen at 0.9496, followed by 0.9457, while on the upside, the first resistance level situated in 0.9598, followed by 0.9661. Going forward, investors this week would keep a watch on Switzerland’s producer and import prices data for further cues.
USDCAD
During the previous week, the USD traded 0.18% lower against the CAD and ended at 1.2988, In economic news, Canada’s international merchandise trade deficit widened sharply in February, growing three times from its previous month’s level. Moreover, the Ivey purchasing managers’ index dipped again in March, casting doubts on the nation’s manufacturing prospects. Meanwhile, unemployment rate in Canada unexpectedly fell to 7.1% in March, following a surge in job gain in the labor market. Additionally, housing starts in Canada eased less-than-expected in March and building permits jumped more than market forecasts in February. The USD hit a high of 1.3220 and a low of 1.2952 against the CAD in the previous week. The pair is expected to find support at 1.2887, and a fall through could take it to the next support level of 1.2786. The pair is expected to find its first resistance at 1.3155, and a rise through could take it to the next resistance level of 1.3322. Moving ahead, market participants this week would closely monitor the Bank of Canada’s interest rate decision and monetary policy report, to get better insights in the Canadian economy.
AUDUSD
The AUD traded 1.64% lower against the USD last week, with the pair closing at 0.7554. The Reserve Bank of Australia (RBA) kept interest rate unchanged at 2.0% for the straight eleventh month. Meanwhile, the RBA Governor, Glenn Stevens, indicated that an appreciation in the Aussie could complicate the adjustment currently under way in the nation’s economy. On the macroeconomic front, Australia’s retail sales came in below expectations ending flat on a monthly basis in February, casting doubt over the ability of household spending to boost economic growth in the year ahead. Moreover, the nation’s trade deficit expanded surprisingly in February. Additionally, the services sector activity slid towards contraction in March and the construction activity eased further in the same month. The pair traded at a high of 0.7675 and a low of 0.7492 during the previous week. The pair is expected to witness its first support at 0.7473 and second support at 0.7391, while the first resistance is expected at 0.7656 and second resistance at 0.7757. Moving ahead, market participants will keep a close watch on Australia’s unemployment rate and consumer inflation expectation. Further, traders will watch National Australia Bank’s business conditions, Westpac consumer confidence and financial stability review all scheduled for the week.
Gold
Gold traded 1.48% higher during the previous week, closing at USD1240.69 per ounce, as a broad weakness in the US Dollar, soft global macroeconomic data and the Fed’s cautious stance towards hiking interest rate increased demand for the precious yellow metal. Gold hit a high of USD1245.00 per ounce and a low of USD1215.70 per ounce during the previous week. Gold is expected to its find support at USD1222.20 per ounce, and a fall through could take it to the next support level of USD1204.30 per ounce. The yellow metal is expected to find its first resistance at USD1251.50 per ounce, and a rise through could take it to the next resistance level of USD1262.90 per ounce.
Crude Oil
Last week, crude oil strengthened 7.96% to close at USD39.72 per barrel, amid renewed hopes of a freeze in oil production, as producers from within and outside the OPEC will meet in Doha on April 17. Moreover, oil prices further strengthened the US Energy Department reported that US crude oil inventories unexpectedly fell by 4.9mn bls during the last week to 529.9mn bls and the American Petroleum Institute (API) reported that crude oil inventories declined by 4.3mn bls last week. Additionally, Baker Hughes reported that the US oil rig count declined by 8 to a level of 354, reaching its lowest level since November in the week ended 08 April. Last week, the commodity traded at a high of USD39.84 per barrel and a low of USD35.24 per barrel. Crude oil is expected to witness its first support at USD36.65 per barrel and second support at USD33.65 per barrel, while the first resistance is expected at USD41.25 per barrel and second resistance at USD42.85 per barrel.
Good trades.
Weekly Forex Update
The highlight of the week was the European Central Bank’s (ECB) monetary policy decision after the central bank kept the benchmark interest rate, deposit rate and marginal lending facility rate on hold. However, the ECB President, Mario Draghi, kept the room open for a future rate cut and brushed off Germany’s criticism over his ultra-loose monetary policy. Further, he stated that uncertainty regarding Brexit would continue to weigh heavily on financial markets at least till the day of referendum. Additionally, he mentioned that the consequences of UK’s exit could impact the Eurozone’s economy minimally.
The Euro traded ended the week in red, following mixed private sector activity data in the Euro-zone and Germany. Data indicated that Eurozone’s manufacturing as well as services activity quickened less than market forecasts in April, indicating slower pace of growth in the region. On the other hand, the ZEW’s survey indicated that the economic sentiment in the Eurozone climbed to a three month high in April and the consumer confidence rose slightly in the same month to stop three months of decline. In Germany, the ZEW survey for economic sentiment improved higher than forecast in April, rising for the second straight month, indicating modest economic growth in the months ahead. Meanwhile, the producer prices in the nation fell in March, registering its sharpest fall in over six years.
The US Dollar ended the week on a strong footing, after the number of Americans applying for fresh unemployment benefits declined to its lowest levels in the past 4 decades last week, pointing towards continued development and a robust US labor market. On the other hand, the Markit manufacturing PMI unexpectedly fell in April, registering its lowest level in six and a half years. Moreover, the Chicago National Activity index edged lower in March and the Philadelphia manufacturing index slipped back into the contraction territory in April, suggesting that the nation’s manufacturing sector is still struggling.
In other economic news housing starts eased more-than-expected in March and the building permits for new home constructions touched a one-year low in the same month. The figures suggested a slowing housing market with signs of a slowdown in the first quarter economic growth. On the contrary, existing home sales rose on a monthly basis in March and the housing price index advanced in February.
The British Pound ended the week in green. Data indicated that the claimant count in the UK unexpectedly climbed for the first time since mid-2015 in March. Meanwhile, unemployment rate in the nation remained unchanged and in line with estimates in February. Moreover, the BoE Governor, Mark Carney, stated that Britain’s exit from the European Union could be a hindrance to UK’s economic growth, as it might lead to lower growth in the nation.
EURUSD
The EUR traded 0.53% lower against the USD last week, with the pair closing at 1.1224. The European Central Bank (ECB) held the main refinancing interest rate at 0.0%. In other economic news, the preliminary estimate of the manufacturing as well as services activity in the Euro-zone unexpectedly slowed in April, indicating that the single-currency region’s economic recovery is cooling. Meanwhile, Germany’s manufacturing PMI came in above market expectations in April while the services PMI missed consensus estimates. Meanwhile, the nation’s ZEW economic sentiment improved more-than-expected in April and producer prices dropped on an annual basis in March. Other economic data showed that the region’s consumer confidence improved marginally in April to end three months of decline. However, the index remains below the levels that prevailed throughout 2015. During the previous week, the pair traded at a high of 1.1394 and a low of 1.1218. The pair is expected to find support at 1.1165, and a fall through could take it to the next support level of 1.1104. The pair is expected to find its first resistance at 1.1341, and a rise through could take it to the next resistance level of 1.1456. This week, investors would keep a watch on the Eurozone’s industrial and consumer confidence, services and economic sentiment indicator for further cues. Moreover, the region’s as well as Germany’s unemployment rate and consumer price index data will grab market attention.
GBPUSD
During the previous week, the GBP traded 1.4% higher against the USD and ended at 1.4402. On the macro economic front, Britain’s unemployment advanced for the first time in seven months, signaling that the UK’s upcoming vote to leave the EU referendum was weighing heavily on the jobs market. The unemployment rate steadied at a level of 5.1% and the total average weekly earnings growth remained subdued in the three months to February, thus indicating sluggish wage growth. In more economic news, retail sales dropped on a monthly basis in March as households cut back on food and clothes, suggesting that consumers are less optimistic about the UK economy. Further, the public sector net borrowing fell more-than-expected in March and the Rightmove house prices advanced to a record high in April. Separately, the BoE Governor, Mark Carney, indicated that the decision to quit the EU could be a struggle for UK’s economic growth. He indicated that consequences of Brexit included pressures on Britain's record current account deficit, and liquidity in financial markets. The pair traded at a high of 1.4454 and a low of 1.4131 during the previous week. Immediate downside, the first support level is seen at 1.4205, followed by 1.4007, while on the upside, the first resistance level situated in 1.4527, followed by 1.4651. Looking ahead, investors will focus on UK’s preliminary gross domestic product, GfK’s consumer confidence, mortgage approvals and Nationwide housing prices and CBI distributive trades survey for future direction in the Pound.
USDJPY
During the previous week, the USD traded 2.77% higher against the JPY and ended at 111.81. On the data front, Japan’s merchandise trade surplus expanded less-than-expected in March. On the other hand, the exports fell for a straight six month in March, but the sharper decline was seen in the imports for the same month. Moreover, the Nikkei manufacturing PMI contracted further at the quickest pace in more-than three years in April. Further, the tertiary industry index eased less-than-expected on a monthly basis in February. The USD hit a high of 111.81 and a low of 107.84 against the JPY in the previous week. The pair is expected to witness its first support at 109.14 and second support at 106.50, while the first resistance is expected at 113.11 and second resistance at 114.45. Moving ahead, market participants look forward to the Bank of Japan’s (BOJ) interest rate decision & monetary policy statement along with the BOJ outlook report for further cues. Moreover, Japan’s unemployment rate, industrial production, and national consumer price index would be keenly observed by investors this week.
USDCHF
The USD traded 1.05% higher against the CHF last week, with the pair closing at 0.9782. On the data front, Switzerland’s ZEW index for economic expectations advanced in April, marking its highest reading in 2016, thus indicating improved outlook for the Swiss economy, Meanwhile, the nation’s trade surplus narrowed in March. The USD hit a high of 0.9797 and a low of 0.9585 against the CHF in the previous week. The pair is expected to find its first support at 0.9647 and first resistance at 0.9860. The second support is expected at 0.9510 and second resistance at 0.9935. Going forward, investors this week would keep a watch on Switzerland’s UBS consumption indicator and KOF leading indicator for further cues.
USDCAD
The USD traded 1.17% lower against the CAD last week, with the pair closing at 1.2670. In economic news, Canada’s retail sales grew unexpectedly in February, a consecutive second increase, indicating a positive sign for the Canadian economy, as it is on track to achieve robust growth in the first quarter. Moreover, the nation’s consumer prices rose more than expected by 1.3% on a yearly basis in March, amid lower energy prices. Further, the Bank of Canada’s consumer prices advanced 0.7% on a monthly basis in March. Meanwhile, the wholesale sales dropped on a monthly basis in February. During the previous week, the pair traded at a high of 1.2992 and a low of 1.2593. The pair is expected to find its first support at 1.2510 and first resistance at 1.2909. The second support is expected at 1.2352 and second resistance at 1.3150. Moving ahead, market participants would closely monitor Canada’s gross domestic product, the industrial product price and raw material price indices for further direction in the CAD.
AUDUSD
During the previous week, the AUD traded 0.18% lower against the USD and ended at 0.7709, after Australia’s CB leading indicator declined in February and the Westpac leading indicator dropped on a monthly basis in March, still indicating a below trend growth in Australian economy. Moreover, the National Australian Bank’s business confidence dipped in 1Q16. Separately, the Reserve Bank of Australia’s recent monetary policy meeting minutes indicated that board members agreed that the current setting of monetary policy remained appropriate on the back of reasonable prospects for continued growth in the Australian economy. The central bank reiterated that continuing low inflation could allow for a future rate cut if the nation’s jobs sector needed a boost. Meanwhile, the monetary authority also warned that appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy. During the previous week, the pair traded at a high of 0.7836 and a low of 0.7635. Immediate downside, the first support level is seen at 0.7616, followed by 0.7525, while on the upside, the first resistance level situated in 0.7818, followed by 0.7928. Moving ahead, market participants will keep a close watch on Australia’s consumer price index and private sector credit growth data for further direction.
Gold
During the previous week, gold traded 0.10% lower and ended at USD1233.03 per ounce, asa broad strength in the greenback, reduced demand for the precious yellow metal. Meanwhile, upbeat US initial jobless claims data raised speculation that the Fed may raise interest rates earlier than expected. The yellow metal hit a high of USD1272.40 per ounce and a low of USD1228.50 per ounce in the previous week. Immediate downside, the first support level is seen at USD1217.33 per ounce, followed by USD1200.97 per ounce, while on the upside, the first resistance level situated in USD1261.23 per ounce, followed by USD1288.77 per ounce.
Crude Oil
Last week, crude oil strengthened 8.35% to close at USD43.73 per barrel, although, the much awaited top oil producers meeting in Doha on April 17, did not materialize and further raised oversupply concerns as Saudi Arabia demanded that Iran should join in the oil output agreement. Meanwhile, a strike in Kuwait by the oil and gas workers went on for 3 days which cut Organization of Petroleum Exporting Countries’(OPEC) crude production by half. Moreover, the US Energy Department reported that US crude oil inventories rose less than anticipated by 2.1mn bls to 538.6mn bls last week, while the American Petroleum Institute (API) reported that crude oil inventories advanced by 3.1mn bls last week. The commodity traded at a high of USD44.49 per barrel and a low of USD39.35 per barrel in the previous week. Crude oil is expected to witness its first support at USD40.57 per barrel and second support at USD37.39 per barrel, while the first resistance is expected at USD45.71 per barrel and second resistance at USD47.67 per barrel.
Good trades.
#Foreign_Exchange_Market_Data_Update
Last week, the forex market was dictated by hawkish comments from the US Federal Reserve (Fed) Chairwoman, Janet Yellen and some top Fed officials.
The greenback ended the week higher against its major peers, after the Fed Chair, Janet Yellen, cemented a March interest rate hike. Yellen indicated that an interest rate hike in this month would be "appropriate", if employment and other economic data hold up. Additionally, the Dallas Fed President, Robert Kaplan, stated that the Fed might need to raise interest rates in the near future, while the San Francisco Fed President, John Williams, stated that a March interest rate hike “is on the table for serious consideration”. Separately, the US President, Donald Trump, in his address to Congress, called for major infrastructure spending of around $1.0 trillion, but did not elaborate on any key details about his economic plans.
#Foreign_Exchange_Market_Data_Update
Last week, the forex market was dictated by robust non-farm payrolls report in the US and the European Central Bank’s (ECB) monetary policy meeting.
The greenback ended the week higher against its key counterparts, after data showed that US employers hired workers at a robust pace in February, thus paving the way for the Federal Reserve (Fed) to raise interest rates. Additionally, the nation’s unemployment rate dropped to 4.7% in February. However, wage growth disappointed with a weaker than expected rise in the same month. Meanwhile, ADP’s private sector added the most number of jobs since December 2015 in February. Also, the nation’s final durable goods orders grew more than expected in January and factory orders advanced for a second straight month in the same month. Meanwhile, the Organization for Economic Cooperation and Development (OECD), in its latest economic outlook report, revised up its 2017 growth forecast for US as it expects economic growth to pick up this year on fiscal stimulus plans. It lifted its growth projections to 2.4% for this year, while the forecast for next year was trimmed to 2.8% from 3.0%. Additionally, the OECD projected that global economic growth is set to continue a “modest recovery” over the next two years, but warned that the recovery may be derailed by financial vulnerabilities and political uncertainties.
The Euro ended the week on a stronger footing against the USD, after the ECB President, Mario Draghi, struck a more optimistic tone on the Eurozone’s economic recovery. The ECB, in its latest monetary policy meeting, left the key interest rate unchanged at 0.00% and reaffirmed that it will maintain its asset purchase program at least until the end of the year. In a post meeting statement, the ECB President stated that the governing council is less likely to provide additional stimulus to the Eurozone’s economic recovery. Additionally, the central bank sharply revised up its inflation forecast, while issuing a modest upgrade to its growth forecasts.
The GBP ended the week in negative territory against the USD, after Britain’s manufacturing and construction output, both came in worse than expected in January, while industrial production dropped less than estimated in the same month, suggesting that the negative effects of the Brexit vote are beginning to bite the nation’s economic growth.
Separately, UK’s Finance Minister, Philip Hammond, in his Budget speech, stated that the Office for Budget Responsibility (OBR) expects UK economy to grow faster in 2017 than previously estimated, but warned that Britain’s economy is likely to feel the pain of Brexit more sharply in the coming years despite showing resilience so far.
EURUSD
The EUR traded 0.46% higher against the USD last week, with the pair closing at 1.0669, after the ECB Chief, Mario Draghi signaled that there was no longer a sense of urgency in taking further monetary policy actions. The ECB maintained the key interest rate unchanged at 0.00%, as widely expected. In economic news, the Euro-zone’ seasonally adjusted final GDP was confirmed at 0.4% on a quarterly basis in 4Q 2016, at par with market expectations. Moreover, the region’s Sentix investor confidence index jumped in March. Separately, Germany’s Markit construction PMI advanced in February. Also, the nation’s industrial production rebounded more than expected in January, while seasonally adjusted trade surplus surprisingly expanded in the same month. In contrast, the nation’s seasonally adjusted factory orders sharply dropped in January. During the previous week, the pair traded at a high of 1.0699 and a low of 1.0525. The pair is expected to find its first support at 1.0575 and first resistance at 1.0749. The second support is expected at 1.0463 and second resistance at 1.0811. This week, investors will look forward to the final consumer price inflation and ZEW survey data across the Eurozone. Additionally, a speech by the ECB President, Mario Draghi will be awaited by investors’.
GBPUSD
During the previous week, the GBP traded 0.98% lower against the USD and ended at 1.2169, after Britain’s manufacturing and construction output, both dropped more than anticipated in January. Further, the nation’s industrial production registered a less than expected drop in the same month. Meanwhile, the nation’s total trade deficit narrowed slightly in January. Another set of data showed that NIESR estimated that UK’s economy grew 0.6% in the three months to February, meeting market expectations. Meanwhile, the seasonally adjusted Halifax house price index rose less than estimated in February. Separately, the OECD sharply raised UK’s growth projection for this year to 1.6%, up by 0.4% from its earlier estimate, due to a less severe impact from the historic Brexit vote. The GBP hit a high of 1.2300 and a low of 1.2135 against the USD in the previous week. The pair is expected to find its first support at 1.2105 and first resistance at 1.2270. The second support is expected at 1.2038 and second resistance at 1.2368. Looking ahead, investors’ anxiously await the BoE’s interest rate decision and UK’s ILO unemployment rate data, scheduled to release this week.
USDJPY
Last week, the USD traded 0.66% higher against the JPY and closed at 114.74. Macroeconomic data revealed that Japan’s final GDP was revised up to 0.3% on a quarterly basis in 4Q 2016. Further, the nation’s flash leading economic index rose more than expected in January, whereas the preliminary coincident index surprisingly climbed in the same month. Meanwhile, the nation’s BSI large manufacturing industries index climbed less than expected on a quarterly basis in 1Q 2017. Additionally, the nation’s Eco-watchers survey for future outlook came in better than anticipated in February. On the contrary, the survey for current situation unexpectedly eased in the same month. Also, the nation’s (BOP basis) trade deficit widened more than expected in January. Separately, in OECD’s interim report, Japan's growth forecast for this year was raised to 1.2% and the outlook for next year was retained at 0.8%. The USD hit a high of 115.51 and a low of 113.56 against the JPY in the previous week. The pair is expected to find support at 113.70, and a fall through could take it to the next support level of 112.66. The pair is expected to find its first resistance at 115.65, and a rise through could take it to the next resistance level of 116.56. Investors’ would shift their attention to the Bank of Japan’s interest rate decision along with Japan’s tertiary industry index and industrial production data, all set to release this week.
USDCHF
The USD rose against the CHF last week, closing 0.32% higher at 1.0107. On the data front, Switzerland’s consumer price index (CPI) jumped more than anticipated by 0.5% on a monthly basis in February. Moreover, the nation’s seasonally adjusted unemployment rate remained unchanged at 3.3% in February, meeting market expectations. During the previous week, the pair traded at a high of 1.0171 and a low of 1.0073. Immediate downside, the first support level is seen at 1.0060, followed by 1.0017, while on the upside, the first resistance level situated in 1.0158, followed by 1.0213. Moving ahead, investors will keep a close watch on Swiss National Bank’s (SNB) interest rate decision, due to be announced later this week.
USDCAD
The USD rose against the CAD last week, closing 0.7% higher at 1.3469. On the macro front, Canada’s unemployment rate unexpectedly fell to 6.6% in February, while seasonally adjusted housing starts unexpectedly advanced in the same month. Moreover, the nation’s building permits climbed higher than expected in January. Also, the nation’s new housing price index rose in January, in line with market anticipations. On the other hand, the nation’s seasonally adjusted Ivey PMI unexpectedly eased in February. The USD hit a high of 1.3535 and a low of 1.3372 against the CAD in the previous week. The pair is expected to find support at 1.3378, and a fall through could take it to the next support level of 1.3293. The pair is expected to find its first resistance at 1.3541, and a rise through could take it to the next resistance level of 1.3619. Going forward, traders will focus on Canada’s existing home sales data, the sole important release this week.
AUDUSD
The AUD weakened against the USD last week, closing 0.71% lower at 0.7540. Last week, the Reserve Bank of Australia (RBA), in a widely expected move, opted to keep the official cash rate steady at a record low level of 1.5% for a sixth straight meeting. The RBA Governor, Philip Lowe stated that global economic conditions have improved over recent months and that the Australian economy continues its transition from the mining boom. He further added that while the nation’s headline inflation is expected to pick up over the course of 2017, there remains considerable variation across the nation’s jobs and housing markets. In other economic news, Australia’s AiG performance of construction index advanced in February, whereas retail sales rebounded in line with expectations in January. Further, the nation’s seasonally adjusted home loan approvals unexpectedly rose in the same month. The AUD hit a high of 0.7633 and a low of 0.7491 against the USD in the previous week. Immediate downside, the first support level is seen at 0.7481, followed by 0.7415, while on the upside, the first resistance level situated in 0.7623, followed by 0.7699. This week, investors will await the release of Australia’s unemployment rate, consumer inflation expectations, NAB business confidence and Westpac consumer confidence indices.
Gold
Gold fell last week, closing 2.44% lower at USD1204.64 per ounce, as concerns about an imminent rate hike by the US Fed at its upcoming meeting weighed on the precious yellow metal. The precious metal traded at a high of USD1237.20 per ounce and a low of USD1194.50 per ounce in the previous week. The precious metal is expected to find its first support at USD1186.73 per ounce and first resistance at USD1229.43 per ounce. The second support is expected at USD1169.27 per ounce and second resistance at USD1254.67 per ounce.
Crude Oil
Crude oil plummeted in the previous week, closing 9.08% lower at USD48.49 per barrel, amid persistent concerns that record levels of US crude oil inventories would offset efforts by other major oil producers to cut global oil output. Additionally, the International Energy Agency (IEA) forecasted that US shale output will likely grow by about 1.4 million barrels per day by 2022. Oil prices failed to find support, after the Energy Information Administration (EIA) recorded a build of 8.21 million barrels in US crude oil inventories to 528.4 million barrels in the week ended 03 March 2017, while the American Petroleum Institute (API) indicated that US crude stockpiles jumped 11.6 million barrels to 526.8 million barrels in the last week. The commodity traded at a high of USD53.80 per barrel and a low of USD48.31 per barrel in the previous week. Crude oil is expected to its find support at USD46.59 per barrel, and a fall through could take it to the next support level of USD44.71 per barrel. The commodity is expected to find its first resistance at USD52.08 per barrel, and a rise through could take it to the next resistance level of USD55.69 per barrel.
Good trades Traders.