Last week, withdrawal of the US Republican healthcare bill, Brexit announcement and robust economic data in the UK and Eurozone garnered significant amount of market attention.
The greenback ended the week mostly lower against its major peers, after the US House Republicans pulled their health-care bill, throwing into doubt the US President, Donald Trump’s ability to push through its pro-growth economic agenda. In economic news, growth in the US manufacturing sector unexpectedly slowed to a 5-month low in March, while services sector activity surprisingly eased to its lowest level in 6 months in the same month, thus pointing towards a slowdown in the nation’s economic activity. Additionally, the nation’s existing home sales dropped higher-than-expected in February, whereas initial jobless claims unexpectedly climbed to its highest level in 2 months last week. In contrast, the flash durable goods orders topped market expectations in February, buoyed by robust commercial aircraft demand.
Separately, the US Chicago Federal Reserve (Fed) President, Charles Evans, stated that the central bank is likely to hike interest rate hikes twice this year and added that it will possibly wait at least until June to decide on the next interest rate rise. Nevertheless, he also added that four rate rises this year isn’t totally out of the realm of possibility, if the economy “really” picks up and inflation tops the Fed’s 2.0% target. Also, the San Francisco Fed President, John Williams, stated that the economy is in a good shape and he expects the central bank to raise interest rates three or four times this year.
The Pound ended the week higher against the USD, after the British annual consumer price index (CPI) climbed 2.3% in February, accelerating at the fastest pace in more than 3 years and breaching the Bank of England’s (BoE) inflation target of 2.0%, thus amplifying calls for an early interest rate hike by the BoE. Moreover, the nation’s retail sales sharply rebounded in February, indicating that an uptick in inflation has not yet crushed consumer spending. Early last week, Sterling declined from a 3-week high after the UK government indicated plans to invoke Article 50 on 29 March 2017, and start the two-year countdown to Brexit.
The Euro ended the week higher against the USD, after the release of upbeat manufacturing and services PMIs across the Eurozone that painted a robust growth picture of the region’s economic activity. Data revealed that growth in manufacturing as well as services sector activity, both accelerated at its fastest pace in nearly 7 years in March.
EURUSD
Last week, the EUR traded 0.57% higher against the USD and closed at 1.0797, after the Eurozone’s preliminary Markit manufacturing and services PMI, both unexpectedly advanced in March. Additionally, the region’s flash consumer confidence index improved more-than-anticipated in the same month. Separately, the European Central Bank (ECB), in its economic bulletin report, stated that economic recovery in the Euro-bloc continues to pick up pace and added that recent incoming data point towards robust momentum in the first quarter. In contrast, the region’s seasonally adjusted current account surplus narrowed in January. Elsewhere, growth in Germany’s manufacturing sector surprisingly jumped in March, while services sector activity advanced more-than-expected in the same month. Also, the nation’s producer price index rose less-than-forecast in February. On the other hand, the GfK consumer confidence index unexpectedly fell in April. The EUR hit a high of 1.0 825 and a low of 1.0719 against the USD in the previous week. The pair is expected to find support at 1.0736, and a fall through could take it to the next support level of 1.0675. The pair is expected to find its first resistance at 1.0842, and a rise through could take it to the next resistance level of 1.0887. This week, investors will focus on inflation data across the Eurozone along with Germany’s unemployment rate, retail sales as well as Ifo report on business climate and expectations.
GBPUSD
Last week, the GBP traded 0.61% higher against the USD and closed at 1.2468, after data revealed that UK’s annual inflation advanced more than market estimates in February. Moreover, the nation’s retail sales rebounded more-than-expected in the same month. On the other hand, the nation’s BBA mortgage approvals unexpectedly dropped in February, while public sector net borrowings posted a less-than-expected deficit in the same month. Meanwhile, the British government announced that Prime Minister, Theresa May, will launch Brexit proceedings on 29 March 2017. During the previous week, the pair traded at a high of 1.2531 and a low of 1.2335. The pair is expected to find its first support at 1.2362 and first resistance at 1.2558. The second support is expected at 1.2250 and second resistance at 1.2642. Looking ahead, investors anxiously await Britain’s final 4Q GDP, the GfK consumer confidence index, net consumer credit and mortgage approvals data, all set to relea se this week.
USDJPY
The USD declined against the JPY last week, closing 1.22% lower at 111.33. Minutes of the BoJ’s January monetary policy meeting showed that board members rejected suggestions that the central bank should raise its 10-year government bond yield target in the future to match expected gains in treasury yields. Members held the view that Japan’s inflation and growth will gain momentum in the foreseeable future, but it remains a difficult task due to concerns about greater uncertainty in global financial markets. On the data front, Japan’s preliminary Nikkei manufacturing PMI dropped in March. Meanwhile, the nation’s adjusted merchandise trade surplus widened in February. Additionally, the nation’s annual exports grew more-than-anticipated in February, while annual imports recorded a less-than-expected rise in the same month. Also, the all industry activity index unexpectedly advanced in January. During the previous week, the pair traded at a high of 112.90 a nd a low of 110.63. The pair is expected to find support at 110.35, and a fall through could take it to the next support level of 109.35. The pair is expected to find its first resistance at 112.62, and a rise through could take it to the next resistance level of 113.89. Moving ahead, BoJ’s summary of opinions coupled with Japan’s jobless rate, the national consumer price index, industrial production, retail trade and large retailers’ sales data, scheduled for release this week, will be on investor’s radar.
USDCHF
The USD fell against the CHF last week, closing 0.73% lower at 0.9912. Macroeconomic data indicated that Switzerland’s trade surplus narrowed in February. Meanwhile, the State Secretariat for Economic Affairs (SECO) in its latest economic forecast, lowered Switzerland’s economic growth outlook to 1.6% in 2017, from the December forecast of 1.8%, while leaving the growth forecast for 2018 unchanged at 1.9%. The USD hit a high of 1.0003 and a low of 0.9882 against the CHF in the previous week. The pair is expected to find support at 0.9863, and a fall through could take it to the next support level of 0.9812. The pair is expected to find its first resistance at 0.9984, and a rise through could take it to the next resistance level of 1.0054. Ahead in the week, investors would direct their attention to Switzerland’s ZEW expectations survey, UBS consumption indicator and KOF spring economic forecast report.
USDCAD
Last week, the USD traded 0.22% higher against the CAD and closed at 1.3377. The Canadian Dollar lost ground, after Canada’s consumer price inflation rose less-than-anticipated on an annual basis in February. Meanwhile, on a monthly basis, the CPI rose 0.2% in February, meeting market expectations. Also, the nation’s retail sales rebounded more than anticipated in January. During the previous week, the pair traded at a high of 1.3409 and a low of 1.3265. Immediate downside, the first support level is seen at 1.3292, followed by 1.3207, while on the upside, the first resistance level situated in 1.3436, followed by 1.3495. Going forward, traders would look forward to a speech by the Bank of Canada Governor, Stephen Poloz, accompanied with the release of Canada’s GDP data, scheduled this week.
AUDUSD
Last week, the AUD traded 0.99% lower against the USD and closed at 0.7622. According to minutes of the Reserve Bank of Australia’s (RBA) March meeting, board members expect to see a continued rise in Australian consumer prices, albeit at a gradual pace. Further, the central bank warned of risks from rapidly climbing house prices and an acceleration of domestic household debt. On the macro front, Australia’s house price index advanced more than expected in 4Q 2016. On the contrary, the nation’s Westpac leading index dropped in February. The pair traded at a high of 0.7750 and a low of 0.7604 during the previous week. Immediate downside, the first support level is seen at 0.7568, followed by 0.7513, while on the upside, the first resistance level situated in 0.7714, followed by 0.7805. Going ahead, traders would keep a close watch on Australia’s HIA new home sales and private sector credit data, slated to release this week.
Gold
Gold traded 1.16% higher during the previous week, closing at USD1243.57 per ounce, amid weakness in the greenback after the US President, Donald Trump suffered a stunning political setback as Republican leaders pulled back the healthcare bill which was seen as the first policy test of Trump’s ability to cut deals as President. Gold hit a high of USD1256.40 per ounce and a low of USD1229.90 per ounce during the previous week. The yellow metal is expected to witness its first support at USD1232.07 per ounce and second support at USD1217.73 per ounce, while the first resistance is expected at USD1258.57 per ounce and second resistance at USD1270.73 per ounce.
Crude Oil
Crude oil traded 1.66% lower in the previous week, closing at USD47.97 per barrel, as investors continue to grapple with worries about growing US oil output and rising inventories. Moreover, the Energy Information Administration (EIA) reported that US crude oil inventories rose by 4.95 million barrels to 533.1 million barrels in the week ended 17 March, while the American Petroleum Institute (API) indicated that US crude oil stockpiles advanced by 4.53 million barrels to 533.6 million barrels in the same week. However, losses in crude prices were trimmed after Saudi Arabia stated that it had cut its oil exports to the US dramatically. Separately, over the weekend, a joint committee of ministers from the OPEC and non-OPEC oil producers agreed to review whether an agreement to cut supplies should be extended by six months. Crude oil hit a high of USD49.48 per barrel and a low of USD47.01 per barrel in the previous week. The commodity is expected to find its first support at USD46.94 pe r barrel and first resistance at USD49.41 per barrel. The second support is expected at USD45.74 per barrel and second resistance at USD50.68 per barrel.
Good trades ;).
