The Week Ahead: Trading Outlook

Key Events This Week: April 6th – 10th

USD: ISD Non Manufacturing Composite April 6th, Minutes Release From March 18th FOMC April 8th
GBP: BoE Rate Decision, Asset Purchase Target April 9th
AUD: RBA Rate Decision April 7th
CAD: Unemployment Rate April 10th

USD Index: Short Term (1-3 Days): Bearish – Medium Term ( 1-3 Weeks) Bullish

Began to perform better again across the G10 space. Although data out of the states has been softer recently, so too has data elsewhere. However all strength was reversed on Friday following the shockingly low NFP print and now markets are beginning to move back rate hike expectations, threatening a further USD correction.

EURUSD:Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

Tumbled early last week as concerns mount over Greece with the due date for it’s payment to the IMF approaching, and currently outweighing any reflationary signs out of the EuroZone. Saw late strength on Friday’s low NFP. Data this week focuses on EuroZone PMIs

GBPUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

A very erratic week for the UK currency last week, which saw negative action despite better PMI prints. Concerns over the upcoming election are worrying investors. The principal concern surrounding this issue is that of whether or not the party or parties which form the Govt will indeed hold an EU referendum which may reduce investment flows. Trading up through the descending trendline from this year’s highs on the weak US NFP. The BoE releases it’s rate decision and asset purchase target on Thursday which will be keenly observed given the recent weak data out of the UK.

USDJPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish

Fell early last week on weaker industrial production numbers but recovered some ground as USD positions began to see paring heading into the NFP crunch. JPY has been benefiting from safe haven flows stemming from a raft of global tensions and has benefited too from the drop in oil and continued to benefit on Friday. BoJ monetary policy statement and trade balance data will be the key focal points this week.

USDCAD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish

The better GDP print bolstered the Canadian currency but many feel the Canadian economy is heading for trouble which is creating limited directional flow on better data. A significant rebound in oil prices is needed to held the CAD case. Saw strong inflows last week and continued to outperform on Friday. Unemployment rate the headline data for the week.

AUDUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

An extremely hard fought week for the Aussie as price printed new yearly lows. Iron ore prices have been plummeting and markets are increasing expectations of an RBA rate cut at the next meeting this week. Bounced from yearly lows on Friday’s NFP print but not to the extent that we saw across the G10 as the weak commodity story and rate cut expectations continued to weigh.
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