The Week Ahead: Trading Outlook

Key Events This Week: April 13th – 17th

  • GBP: CPI Tuesday
  • USD: Retail Sales Tuesday, CPI, Univ of Michigan Friday
  • AUD: Unemployment Rate Thursday
  • EUR: ECB Rate Decision Wednesday
  • CAD: BoC Rate Decision & Monetary Policy Wednesday

USD Index Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish A much firmer week for the Dollar which was boosted on the back of a more Hawkish than expected FOMC Minutes release. Treasury yields gained this week on the inflow and USD was firmly supported across the board. Retails sales and CPI data next week are going to be crucial and we can expect much more strength to the upside on positives numbers or a rotation lower on weaker numbers. With the Fed’s data dependant stance the main market focus, US data is expected to create higher volatility in the markets. EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish A dreadful week for the single currency which was hammered on USD demand, and carry trade demand alike. Eurostoxx reached 7 year highs which saw the currency continue lower and issue surrounding Greece continue to weigh. Trading back to Yearly lows, the parity hunt continues. ECB Rate decision this week is not expected to deliver any surprises. GBPUSD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish The battle weary UK currency continued lower last week, victim to USD demand. Uncertainty surrounding the UK elections continue to weigh and despite a better start to the week, driven by big M&A news, weak data on Friday saw the currency print new yearly lows against the USD. USDJPY: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bullish As Japanese investors sold foreign securities in record amounts recently, repatriating the money into their native currency, JPY has had another positive week, except of course against the USD. A surging Nikkei has continued to support USDJPY which is making a run for yearly highs once more. USDCAD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish Oil prices continue to drive the Canadian currency at the moment within the Canadian economy suffering the effects. BoC are in the spotlight now as markets expect them to acknowledge this issue in it’s monetary policy meeting this week, though no change to the interest rate is expected. AUDUSD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish Carry trade demand and a less Dovish than expected RBA gave the Aussie a boost this week and indeed has even held it up against the USD. Markets are still expecting further RBA easing and with higher US interest rates in the near future, AUD downtrend is expected to resume.

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