Let’s have a look at the economic calendar.
Weekly Forex Outlook: Feb. 12 - 16
The spectacular decline of US stocks was the biggest event of last week. Dow Jones experienced a record fall: it lost more than 1,000 points in one day.
The US dollar took its chance to recover. Traders fear that the Federal Reserve will raise interest rates faster than expected. This may hurt profits of American companies, but boosts demand for the cheap dollar.
The USD index managed to return above 90.00 and has some chance for stabilization. Resistance is at 91.00.
Investors took profit on their bullish EUR/USD positions, and the pair slid by 1.4%. It has to rise above 1.2345 to resume uptrend. Decline below 1.2220 will open the way down to 1.2125 and 1.2080, although we think that the euro should be more or less stable given the euro area’s strong economy.
GBP/USD also corrected down last week. The Bank of England offered the pound a positive boost. It raised the UK economic forecasts and said that interest rates probably needed to rise sooner and faster than it had previously thought. However, the general market selloff affected the pound, and GBP/USD failed to stay above 1.40. Support is at 1.38 and 1.3665. Yet, fundamentals have improved and the pair may try to resume uptrend after some consolidation.
Australian and New Zealand dollars suffered because of the market’s risk aversion and the fact that central banks of these nations don’t plan to raise interest rates. Both AUD/USD and NZD/USD recovered by the end of the week, but still closed below the weekly moving averages.
Forex economic calendar for the coming days includes UK inflation figures on Tuesday, and US consumer inflation and retail sales on Wednesday. The flash European GDP figures will always be released in the middle of the week. Australian employment and US PPI will come out on Thursday and the speech of the RBA governor together with British retail sales and the US building permits are awaited on Friday.
Watch and find out how to trade EUR/USD and GBP/USD ahead of the ECB statement!
The market sentiment improved based on an ease of the trade war tensions between China and the US.
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