USD/JPY

The USD/JPY pair rose during the course of the week, but struggled at the 110 level. Because of this, I think that we will still have quite a bit of bearish pressure in this market, especially considering that the Friday candle itself was a shooting star. If we can break down below though bottom of the candle, the market will more than likely drop down to the 109 level which can act as a GOOD SUPPORT, if not the 108 level. On the other hand, if we can break above the top of the range for the week, the market could very well go looking for the 112 handle.

 

EUR/USD

The EUR/USD pair fell during the course the week, but remained supported near the 1.12 level. I think that we may get a short-term bounces week, but I’m not expecting much in the way of movement. In fact, this is a market that I will be surprised if I place any trades in or the next several sessions.

1.1170 ACT AS A VERY GOOD SUPPORT FOR THE FULL LAST WEEK , IF BROKEN WE CAN SEE THE PAIR GOING GOING THE 1.1130.

UPSIDE IT NEED TO BREAK 1.13 CAN ACT AS A STRONG RESISTANCE, BREAKING OF THE RESISTANCE CAN TAKE THE PAIR TO 1.1350-1.14

 

GBP/USD

The British pound continues to be very volatile as concerns about the United Kingdom leaving the European Union continues to be in the forefront of trader’s minds. Ultimately, at this point in time I believe that the market will try to grind itself lower but there is going to be so much volatility due to headlines that this is a pair that could be very difficult to deal with over the next several sessions, at least until we get to the month of June when we get the vote.

 

UPSIDE;- STRONG RESISTANCE CAN BE SEEN AT 1.4580 BREAKING OF THE LEVEL CAN TAKE THE PAIR TO 1.4660

 

DOWNSIDE;-   STRONG SUPPORT CAN BE SEEN AT 1.4500 , BREAKING OF SUPPORT CAN TAKE TAKE THE PAIR TO NEXT LEVEL 1.4460.-1.4400

 

AUD/USD

The AUD/USD pair went back and forth during the course of the week, but the thing that I noticed is that even with the short-term rally we have seen quite a bit in the way of resistance near the 0.73 level. Ultimately, I think that we will continue to see bearish pressure in this market as the Reserve Bank of Australia has cut rates recently. Short-term rallies will be selling opportunities based upon exhaustion as far as I can tell.

 

UPSIDE;- 0.7300 CAN ACT AS A STRONG RESISTANCE , BREAK OF 0.7300 CAN TAKE THE PAIR TO 0.7360

 

DOWNSIDE;- 0.7220 CAN ACT AS A STRONG SUPPORT, BREAK LOW 0.7200-0.7200 CAN TAKE THE PAIR TO 7100-7000

 

FUNDAMENTALS TO WATCH OUT FOR THIS WEEK

This week is relatively risk heavy with data and events. Focus is on Janet Yellen speech.

 

What to watch for over the coming days –

 

Flash PMI reading from Europe -

 

Market will closely watch out for PMI reports from Europe to see, whether growth slows or recovers.

 

Glenn Stevens’ speech -

 

Australia’s central bank governor Glenn Stevens is scheduled to speak on Tuesday and will be closely watched to see, whether he drops another rate cut hint or not. RBA in recent days has reversed its position from hawkish to dovish.

 

Euro area meeting on Greece -

 

Tuesday Euro Zone finance ministers will meet on Tuesday to determine, whether Athens is eligible for bailout loans or not?

 

BOC rate decision -

 

Bank of Canada will announce monetary policy decision on Wednesday. In recent days, Canadian economy, especially energy sector has been hit hard by wildfire, which has taken away around 1.8 million barrels/day worth of production offline, amid lower crude price. Will BOC take action to address the issue?

 

G-7 meeting –

 

Thursday will mark the start of two day G-7 meeting in which Japanese Prime Minister Shinzo Abe is widely expected to raise the Yen issue to the leaders, excessive strengthening of it. This meeting could define whether BOJ will intervene or not. It will also table discussions on global stimulus, refugee crisis, China’s aggression in Asia and climate changes.

 

Janet Yellen –

 

Mega events of the week is on Friday, when FED chair Janet Yellen will be speaking on monetary policy and market will be looking for cues over June rate rise.

Source Market News International (MNI) –

FED: April FOMC mins confirm June remains live for a rate hike, and ...

 

FED: April FOMC mins confirm June remains live for a rate hike, and show a bigger consensus for hiking than mkt expected. MOST participants said if data show better growth, "then it LIKELY would be appropriate" to hike in June; participants generally thought medium-term outlook had not changed. Minutes also indicate "closely monitor" was meant "to convey" sense that risks had diminished. Several judged risks 'roughly balanced' but many others saw downside risks - disagreement is prob why that phrase was dropped. Voting members were a little more cautious -- they said "it would be prudent to wait for add'l info" & leave options open. But with recent info looking stronger, the Street will take this as additional confirmation that a June hike is more likely than not. Separate special discussion of Fin'l Stability says more stringent regs have upped banking system resilience.

WEEKLY FORECAST

 

USD/CAD

The USD/CAD pair initially fell during the course of the week but turned right back around to form a hammer on the weekly chart. I believe that we are simply trying to build up enough momentum to break above the 1.30 level. If and when we do, the market should continue to go much higher, perhaps 2 handle. I believe that of course you have to pay attention to oil, and right now it does look likely to struggle.

 

AUD/USD

The AUD/USD pair broke down during the course of the week, and more importantly went below the 0.73 level. This is an area that begins a pretty significant noisy range all the way down to the 0.70 level. Because of this, I believe that the Australian dollar will grind lower, but grind is probably the key word in that sentence.

 

GBP/USD

The British pound initially tried to rally during the course of the week but turned around to form a shooting star. This looks like a pair that is trying to “roll over”, and as a result I think we will continue to see a little bit of weakness. We will more than likely see an attempt to reach towards the 1.41 level over the course of the week. I’m not looking for any type of meltdown, just a slight grind.

 

EUR/USD

The EUR/USD pair initially tried to rally during this past week, but turned around as we closed just above the 1.13 handle. This is a market that continues to show extreme amounts of volatility, and of course quite a bit of resistance at the 1.15 level. However, I think that the 1.12 level below will be supportive so this could be a very choppy week in the Euro. At this point in time, I believe it’s probably best to leave this particular market alone for the next several sessions.

 

Fundamentals to watch out for this week

This week is relatively risk heavy with data and events.

What to watch for over the coming days –

UK inflation data and employment report -

April inflation report, which includes, Retail price index, Consumer price index, Producer price index, House price index will be released on Tuesday. Employment report is due on Wednesday.

 

U.S. inflation -

FED is having extra focus on inflation, which makes Tuesday’s CPI extra impotent.

Japan’s GDP

First quarter GDP reading is due on late Tuesday. Pressure to act will rise over BOJ, if economy dips into recession.

Euro Zone inflation -

Many of the new measures taken up by the ECB has kicked in, so market participants will be watching its impact in April inflation data, due on Wednesday, if any.

 

There are lot more than regular economic data, which could influence markets big time.

 

FED minutes

FOMC will release its minutes of meeting on Wednesday, which could provide insight over future rate hikes, especially how much concern FED will be about Brexit in its June meeting.