This week we will see two CPIs, five PMIs, and a dozen statements from banks governors from all over the world. Why do you need to follow these releases? Because it is a perfect opportunity for markets to gain volatility and for you to earn on this volatility.
Weekly Market Outlook: April 22-26
This week promises to be interesting.
The most important events will appear in the economic calendar on Wednesday. Australian CPI levels will affect the Aussie. As for the Canadian dollar, the meeting of the Bank of Canada will be under high attention. The interest rate is forecast to stay on hold. That’s why the speech of the central bank will have a strong impact. Last time, the Bank of Canada was quite dovish. If this time it manages to adopt a holding stance, the CAD will be supported. In the case of a similar pessimistic mood, the loonie will suffer.
On Thursday, the Bank of Japan will deliver its monetary path. There will be no changes to the interest rate. The impact of the statement will be limited as well if only the bank doesn’t surprise with unexpected comments.
Friday will give a chance to trade on the American data. Advanced GDP may drive the USD.
Some news for this week. Japan Prime Minister left Japan for a tour of Europe and North America. The most important event is a meeting with Mr. Trump. Parties are anticipated to discuss North Korea's denuclearization and Japan-US trade negotiations. Comments during this tour may affect related currencies a lot.
Let’s move to the technical setups.
USD/CAD and limited movements.
The USD/CAD pair can’t break above the consolidation zone. The downward pressure is high. MACD and Awesome Oscillator are still near the 0 level. The stochastic oscillator is near the overbought zone. The pair may rise based on the weak USD or an optimistic tone of the Bank of Canada. However, the rise will be limited. The first resistance lies at 1.34. As soon as the pair is closed above it, we can anticipate a rise toward the weekly pivot level at 1.3436, that may be blocked by the trendline. If bears are strong, the pair will fall below the middle weekly pivot at 1.3355. It will provoke a following decline towards 1.3308. A breakthrough will cause a dramatic fall to 1.3227.
USD/JPY is near important levels.
The pair rebounded from 0 Fibo level. MACD and Awesome Oscillator formed a bearish divergence with price chart. The divergence is not too bright but it still exists. If the US dollar weaker than the Japanese yen and the yen is supported by the Bank of Japan meeting, the pair may keep suffering. The first support is located at the level of 200-day MA at 111.55. If the level is broken, the next support will lie at 23.6 Fibo level at 111.05. If bulls take the situation under control, the pair will rise above 0 Fibo level. A break above this level will strengthen the further increase. The next target lies at 112.80.
When the NZD/USD will recover.
Last week, the New Zealand dollar plunged because of the low inflation data. On Friday, bulls managed to prevent the pair from the further decline. However, on Monday, the pair has been suffering again. Indicators signal that the pair is oversold. That is a positive sign for the New Zealand currency. As soon as the RSI and Stochastic Oscillator leave the oversold area, the New Zealand dollar/ US dollar pair will be able to rise. The first important level to break above lies at 0.6710. As soon as it’s crossed, the pair will get a chance to move up towards 0.6755. If the US currency is stronger, the pair will keep suffering. Support lies at 0.6638.
This week, we will continue monitoring the developments in the stock and commodity markets as tensions between Ukraine and Russia and Fed’s tightening cycle remain the main issues driving the markets.
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