Let’s start with a look at the economic calendar for the upcoming days.
Weekly Forex Outlook: April 16-20
The US dollar slightly declined last week but remained near the middle of its broad range since the end of January. Trade wars tensions have declined. However, during the weekend the United States and its allies launched missiles targeting what was said to be chemical weapons facilities in Syria. The move came as a retaliation for a suspected poison gas attack on April 7. So far, the markets’ reaction was limited and we see no broad risk aversion. Yet, of course, geopolitics will remain a discussed topic in the coming days, so traders should be aware of risks.
Japanese yen was losing last week. USD/JPY rose and managed to get inside the daily Ichimoku Cloud. It is now providing support at 107.15 and the next support is at 106.70. Resistance is at 107.85 and 108.50. The loose monetary policy of the Bank of Japan limited the strength of the Japanese yen. Japanese Prime Minister Shinzo Abe will meet the US President Trump on April 17-18 – this event can be a market-mover.
GBP/USD is testing levels above 200-week MA at 1.4230, although last week’s candle closed below this level. Expectations of a rate rise from the Bank of England have been a major driver of sterling’s gains in recent days. To continue rising to 1.4330 and 1.4420 the pound needs the UK economic data to come out strong. If the economy fails, return below 1.42 will lead to a correction to 1.41.
EUR/USD remains in an uptrend above 1.2215. It looks like there will be another week of consolidation. Resistance is at 1.2400. The euro was weakened by weaker economic data and cautious comments of the ECB members.
USD/CAD can be an interesting pair this week because of the Bank of Canada’s meeting. The central bank will likely sound more optimistic than the last time because of a prospect of NAFTA deal and higher oil. The pair may still slide to 1.25. Resistance is at 1.2660/80.
This week Britain will release important figures on Tuesday, Wednesday and Thursday. The Bank of Canada’s meeting & press conference will take place on Wednesday. On Friday, Canada will publish CPI and retail sales. Finally, US data will come out on Tuesday and figures from Australia and New Zealand will be out on Thursday.