Let’s have a look at the economic calendar.
Weekly Forex Outlook: Mar. 26-30
US President Donald Trump signed a presidential memorandum that will target up to $60 billion of Chinese products with tariffs. If China comes up with countermeasures, trade tensions will escalate further.
Concerns about trade wars have overshadowed central bank policy. The Federal Reserve raised the federal funds rate to 1.75% and signaled a relatively upbeat outlook for the economy. This is exactly the outcome the market was expecting, and the US dollar didn’t get any strength from the event.
The US dollar index declined and looks vulnerable for 2018 lows in the 89.20 area.
In the current uncertain environment, traders prefer low-risk assets like the Japanese yen, especially in pairs like AUD/JPY and NZD/JPY. As for USD/JPY, if it settles below the key level of 105.00, we’ll see a deeper decline.
GBP/USD rose to the highest levels since January above 1.4200. The pound went up as the European Union and Britain agreed on a Brexit transition deal and the UK released strong wage growth figures. Two members of the Bank of England unexpectedly voted for a rate hike. However, traders focused on the idea that rates will rise only very slowly, so the pound retreated down by the end of the week. Traders continue to expect a rate hike in May, so the meeting didn’t really bring any surprises.
The 200-week MA creates resistance near 1.43. GBP/USD may retrace down to 1.3930 and 1.38.
EUR/USD continued consolidation between 1.24 and 1.22. Long-term uptrend remains in place, although the pair has lost its bullish momentum. European PMIs came below expectations. As a result, we expect the euro to continue trading close to the current levels.
The economic calendar for the upcoming days is very light. Friday will be a bank holiday in many countries because of approaching Easter. The few important releases include US consumer confidence on Tuesday, American GDP on Wednesday and British current account together with Canadian GDP and US core PCE price index on Thursday.
The market sentiment improved based on an ease of the trade war tensions between China and the US.
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Watch and find out the key levels for EUR/USD, GBP/USD and NZD/USD for today!