The Federal Reserve speeds up its quantitative tightening, and this is certainly bullish news for the USD. At the same time, this is a negative factor for the American stocks, which have entered their seasonally worst month.
Weekly Market Outlook: March 11-15
A new week and new events. Let’s go through the significant dates in the economic calendar.
On March 12, the British market will be under pressure because of the big number of events. Firstly, economic figures will shake the British currency. Pay attention to GDP and Manufacturing Production releases. During the day traders should check news as British lawmakers will vote on the Prime Minister’s plan to leave the European Union. If the Tuesday’s vote is defeated, the members of the Parliament will vote on a no-deal scenario on March 13 and on a Brexit delay on March 14.
If you are scared of the high volatility, try your luck on USD trading. CPI and Core CPI figures will be released in the middle of the day. Mr. Powells’s speech may affect the American currency as well. So stay up to date with FBS.
On Wednesday, March 13, the US currency will be affected by the economic data again. Core Durable Goods Orders and PPI figures are important indicators to trade on. Also that day, the British annual budget release may have some impact on the GBP.
Friday, March 15, will be highlighted by the meeting of the Bank of Japan. No changes to the interest rate but traders will definitely consider the tone of the statement.
Us-China trade war stays one of the most discussed topics. Chinese lawmakers are expected to vote on a foreign investment law which includes measures to protect the IP of foreign companies and ease pressure on them to transfer technology to local partners, an effort to address US concerns.
What technical indicators say about the direction of GBP/USD?
On the daily chart of the GBP/USD pair, the MACD indicator formed a bearish divergence that resulted in the downward movement. Up to now, the pair is supported by 50-day and 200-day MAs. The further direction of the pair will depend on the vote’s outcome. In case of the vote for or a delay in the Brexit deal, more likely the British currency will be supported that will boost the pair. Key resistances for the week lie at 1.3085, 1.31800 and 1.3350. If the situation is not that optimistic for the pound, the pair will meet supports at 1.2915, 1.2820 and 1.2650.
Will the EUR recover? Last week the EUR/USD pair plunged below 1.12. However, at the end of the week managed to recover. The further direction will depend on the strength of the American currency. As I said above, there will be many economic releases that will affect the USD. If the US currency is supported, the euro will keep suffering. A break below 1.12 will [rovoke a slide towards 1.1141, 1.1055. But the Awesome oscillator formed a bullish divergence with the price chart, that signals a recovery of the European currency. The first important resistance lies at 1.1261. As soon as this level is broken, the pair will have a chance to move up towards 1.1348 and 1.1467.
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