Last week everybody’s attention was drawn to stocks. Indices in the US have reached new maximums, while currencies were consolidating and were relatively quiet. The US Dollar has weakened against the Euro and the Japanese Yen. But it’s strengthened its position against the British Pound. One of the reasons of currencies’ inability to form a strong trend like stocks was the new QE stages undertaken by central banks worldwide. The impact of it was quite equivocal for currencies. But it was definitely positive for shares. Unfortunately all those easing programs have overshadowed currencies’ perspectives, because investors are excited to find out which bank is going to win the contest. In other words they are wondering, who will succeed in easing its currency more than others. Growth in stocks and consolidation in currencies also suggest, that investors are more interested in purchasing shares than to try to find out which support or resistance the currency will break. Absence of essential data from the US this week also sustained consolidation. The only more or less eminent index was IBD/TIPP (Index of Economic Optimism). It showed a surprising downfall of sentiments. According to the report Americans have become less optimistic about economic perspectives and federal policy, but more optimistic regarding personal funds. So we’ll have to wait till Thursday in order to receive some significant data from the USA. There will also be an abundance of influential events from other parts of the world. So tomorrow looks quite promising and exciting. Today we recommend to pay attention to German Industrial Production (March) at 10:00 GMT. Previous number was +0.5% and the forecast is -0.1%.
The Euro is trading around 1.3080. Overall bias is bullish. The euro is attempting to get higher on better than expected earnings from European Banks. Analysts suppose that the Euro is going to trade strong in the range 1.3050 – 1.3250 and aim at higher targets.
The pair has been trading around 99. Strong rally in Japanese equities can help the Dollar to appreciate against the Yen. Next target on the upside will be 100. Support for this endeavor is located at 98.
The Pound has moved down. It reached the anticipated target of 1.5480 and found an important support in that area. So the most probable scenario here is a few days’ consolidation.
09:35 EUR German 5-Year Bobl Auction
10:00 EUR German Industrial Production (MoM)
11:00 USD MBA Mortgage Applications (WoW)
12:00 BRL Brazilian CPI (YoY)
12:00 NOK Norwegian Interest Rate Decision
12:15 CAD Housing Starts
12:30 USD FOMC Member Stein Speaks
14:30 USD Crude Oil Inventories
14:30 USD Gasoline Inventories
15:30 BRL Brazilian Foreign Exchange Flows
17:00 USD 10-Year Note Auction
22:45 NZD Employment Change (QoQ)
22:45 NZD Unemployment Rate