The Week Ahead: Trading Outlook

Key Events This Week: February 15th – 20th:

USD: FED Minutes Feb 19th
EUR:  ZEW Survey Feb 17th, PMI’s Feb 20th
GBP: Jan CPI Feb 17th, ILO Unemployment & BOE Minutes Feb 18th,
JPY:  Q4 GDP Feb 15th, BOJ Rate Decision Feb 18th
AUD: RBA Minutes Feb 17th                                                                                                                                   CAD: Retail Sales Feb 20th

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

February’s strong Payroll figures and growing political uncertainty in the Eurozone helped to support the Dollar early last week though worse-than-expected US retails sales saw price soften. Rising US yields continue to support the greenback and with Eurozone political risk having slightly diminished, markets await comments from Fed’s Yellen later this month. This weeks FED minutes will be eyed but unlikely to garner much reaction in light of the strong payrolls data.

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

Saw choppy price action this week amidst conflicting reports surrounding a resolution to the situation with Greece. The single currency headed higher from year to date lows on reports of Greece being given an extension of the emergency liquidity assistance. The ongoing uncertainty surrounding Greece and it’s position in the Eurozone is likely to continue to weigh on price over the coming weeks and with negotiations appearing far from smooth, price action is likely to remain choppy and reactive. All eyes will be on the EU summit Monday for the next instalment in the Greek saga

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

Registered a positive week on the back of a hawkish quarterly inflation report and BoE Governor Carney’s subsequent comments. With the Inflation forecast raised, reserve manager inflows are likely to continue to strengthen the currency, which has now broken out of the downtrend running from 2014 highs. Weekend  hawkish comments from BoE board member Weale will like support cable as we head into the new week.

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

JPY saw a sharp rebound last week following unsourced comments that the BoJ is reluctant to expand monetary easing. This move was further fuelled by the disappointing US retail sales data. Markets await Comments from BoJ’s Kuroda this week with a denial of the reports likely to revive yen selling

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

CAD had a choppy week on the back of volatility in crude prices. Disappointing US retail sales saw CAD regain some of the ground it conceded earlier last week but USD bullishness looks likely to continue from these levels. The BoC is likely to continue its doveish tone and with oil prices threatening Canadian growth, further CAD downside is expected to materialize

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

.Another bearish week for the currency following the unexpected cutting of interest rates by the RBA . Week data out of China added downside pressure as commodity prices fell but the pair managed to rebound somewhat on the back of disappointing US retail sales, the rebound continued on the back of a speech given by RBA governor Stevens who was found to sound less doveish than expected. RBA minutes will be eyed this week for further clues as to the RBA’s stance.

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