The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
Weekly Forex Outlook: April 2-6
The US dollar recovered from the bottom of the range, in which it has been trading since the end of January.
There were some positive factors for the greenback. Firstly, concerns over global trade protectionism eased. Secondly, there was some progress on North Korea’s nuclear program. Plus, investors closed their USD short positions ahead of the end of the quarter.
Of course, as the new quarter begins in April, the USD will no longer have the support of monetary inflows, so it remains to be seen whether the American currency is able to continue strengthening. Pay attention to the technical levels of the USD index: resistance is at 90.50 and support is at 88.20.
USD/JPY rose from 104.60 to 107.00. The pair may rise to 107.60 and 108.50 especially in case of the weekly close above 106.00.
GBP/USD made a pullback down. Notice that there’s a strong resistance at 1.4270 – it’s a 200-week MA. The last time the pair traded above this line was in 2014.
EUR/USD keeps meeting resistance at 1.2450/1.2500 ahead of 1.12550. it’s not likely that the situation will change in the coming days. Focus on support at 1.2200, although a break lower would take some really good news from America.
Britain will release manufacturing PMI on Tuesday.
On Wednesday, await Australian retail sales, the UK construction PMI, euro area’s flash inflation for March, US ADP employment report and ISM services PMI.
Thursday will bring AUD trade balance, GBP services PMI and Canada’s trade balance.
Finally, the first Friday of April, so the US will release NFP, average earnings, and unemployment rate.
Last week the speech of the Fed's Chair Jerome Powell led to big swings in the market. The USD jumped, while EURUSD and GBPUSD revisited lows. Gold and US500 also got under pressure.
The gold has made a perfect retest, but will it hold against the rising dollar? Also, the Jackson Hole Symposium and Jerome Powell's speech may become critical for most assets, and finally, more economic releases and earnings reports await you.
Although the last week was intense, this one may be more dynamic and volatile. After the FOMC meeting and controversial decisions from the Bank of England, we saw a historical pound decrease, and the gold plunge. And there’s even more for you.
After the US CPI last week came out above the forecast, traders started expecting a 75-basis point rate hike…
In this video, we will talk about the potential change of a trend in the euro, another stock rally amid a global downtrend, gold prospects, and news that shakes the world right now. It’ll be a helpful video you don’t want to miss.