The 10 essential things to know in FX this week
The weekly edition of the economic calendar, looking at:
- The euro
- The US dollar
- Pound sterling
- Other important trends – this week from China and Canada
- Economic data calendar
- Following last week’s positive data releases the pound should consolidate this week. The upcoming elections seems to be giving the market only minor jitters but as we roll towards May 7 we expect the pound to come under more pressure during this period of uncertainty.
- UK Retail Sales figures for March due this Thursday is seen one of the more hot releases in the UK of late as it has come ahead of market expectations in four of the last five months. Last month’s 0.7% increase was typical of the recent trend, but not as exuberant as the other beats. For what it’s worth, consensus is only expecting a 0.4% rise this time around, and if recent history can tell us anything, watch for a decent figure to be the ultimate result and this should stabilize pound jitters.
- Unlike EURUSD, the GBPUSD Moving Average has turned conclusively higher, indicating a possible shift to bullish momentum. For this week, all eyes will be on key psychological resistance at 1.50 – if that level is eclipsed a continuation toward 1.5200 could be in play.
This weeks range: GBP/EUR 1.3720 – 1.4000; GBP/USD 1.4735 – 1.5050
- The ongoing possibility of a Greek exit from the euro zone and its ability to meet its Emergency Liquidity Assistance requirements continue to dominate the conversation in Europe and at the IMF meetings in Washington. The Greek bailout will again be a key focus of the Eurogroup meetings on Friday with a satisfactory deal unlikely to have been completed by then. The US treasury secretary, Jack Lew, is calling on the Greek government to take the lead in finding a solution that is palatable for all parties.
- The German ZEW survey of sentiment, out on Tuesday, has been gradually climbing over the last five months. The general consensus is calling for another increase, but again not as aggressively as recent increases. Should the result be slightly better than last month’s figure and than market expectations, the market will expect the result to help give the EUR some “oomph” in the early part of this week.
This week’s range: EUR/USD 1.0600 – 1.0880
- Unemployment and flash manufacturing figures on Thursday will be eagerly anticipated with the data to be scrutinised closely by investors and the Federal Reserve following the weak, but positive CPI figure on Friday. Any sign of stronger data will be welcomed by those same groups who are looking to grasp on to any signs of a resurgent US economy that could provide more clarity into the timing of the highly anticipated first tightening of interest rates.
- Despite the last week’s drop in the greenback, USDJPY remains trapped in a sideways range between support at 118.30 and resistance up at 121.80. With neither the Moving Average nor the Slow Stochastics offering a clear signal, more consolidation in the recent range is probable this week, but if we do see a breakout below 118.30 support, bears could quickly target 117.00 or 116.00 next.
- US durable goods orders for March will be released this Friday and the market expectations are an increase of 0.7%. Watch for a move in the US.
- Global investors and analysts will be focused intently on China’s flash manufacturing PMI data on Thursday looking keenly for signs of economic resurgence. In a quiet economic data week this figure will likely take on additional significance.
- The Canadian dollar is looking like an economic rock star! With the Bank of Canada taking a more optimistic stance, employment on the rise, and inflation back to decent levels, the CAD has become a market favourite. However the Canadian Wholesale Sales release for February may not follow recent positive trends and this may destabilise the CAD recent track record.