EUR
The euro has an eye on Italian politics, following the news that an Italian coalition government could be in the making. The leaders of the League and Five Movement parties have announced that they could form a functioning government.
‘[Neither party should] look to 19th-Century solutions when trying to solve the problems of the 21st Century.’ Italian President Sergio Mattarella has warned.
The Trump decision of taking the U.S. out of the nuclear deal with Iran stressed the Euro as The UK, Germany and France declared a statement in response to the decision. The three countries are still in their “continuing commitment” to the JCPoA Iran deal, and they invited the US to “avoid taking action obstructing its full implementation by all other parties to the deal”.
The weak German factory orders added another stone to the weaker Eurozone economic data, convincing traders that the European Central Bank monetary stimulus policy will not be erased earlier.
Next week, all eyes will be on German GDP on Tuesday, with a growth forecast of 0.4%
USD
The inflation indicator CPI (MoM) was 0.2%, unlike the forecast 0.3%.
The ongoing correction in the US Treasury bond yields, along with fading expectations of faster Fed rate hike moves, pushed traders to continue unwinding their long USD besides the softer CPI.
President Donald Trump decided to take the U.S. out of the nuclear deal with Iran, raising the risk of conflict in the Middle East and expanding the effect on global oil supplies and the global economy.
“The Iran Deal is defective at its core. If we do nothing, we know what will happen. In just a short time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapons. This horrible one-sided deal should have never, ever been made.” Trump announced on Tuesday
The dollar rose as the yield on 10-year U.S. Treasury notes jumps above the important 3% level, to the highest level in two weeks.
Next week eyes will be on retail sales with a forecast of 0.4%
CAD
Canadian employment change fell hard to 1.1K after forecast was 17.8K. This erased the gains the currency had made according to high oil prices
Next week, all eyes will be on CPI with a previous reading of 0.3%
GBP
The BoE’s Monetary Policy Committee voted to leave interest rates on hold at 0.5% and also left its asset-purchase program unchanged. This was widely anticipated after softer first quarter growth rising by just 0.1%.
“The recent weakness in data for the first quarter had been consistent with a temporary soft patch, with few implications for the outlook for the UK economy. There was value in seeing how the data unfolded over the coming months, to discern whether the softness in Q1 might persist” the meeting minutes said.
Looking ahead, there is limited UK data to be released next week with monthly jobs and wages data on Tuesday. A pick-up in salaries and a reduction in the unemployment rate may give the GBP a small advance, leading towards future inflation pressure, although current expectations are in line with last month’s figures.
Next week, all eyes will be on the jobs report. Wages are expected to drop to 2.7% in March, while there are expectations for the jobless claims to rise to 13.3K in April. The unemployment rate is likely to stay at its lows of 4.2%.
NZD
On his first meeting as governor of the Reserve bank of New Zealand, Adrian Orr sent a dovish statement although he left the cash rate at 1.75%.
According to first quarter growth with 0.7% from the previous 0.8%, Orr seemed to remove the tightening bias, with a neutral stance speech saying that the next move in the interest rate could be up or down.
US INDEX
On the daily chart, the price has bounced from the descending trend line starting at 2017 high. The price is near the key resistance 94.15 where it bounced with a pin bar. A bat harmonic pattern boosts the continuation of the bearish momentum. A divergence in the RSI confirmed this possible downfall, If the price could break beneath the key support level of 92.6, it may reach 91.1 again.
NZD/USD
On the daily chart, the price has reached the support zone of 0.7035-0.6965. The price touched the upward trend line from the low of 2008 with a strong hammer. An AB=CD pattern is formed in a smaller frame. It presented a divergence in RSI as well. If the price breaks the lower trend line as shown, it is expected to get back up again to the resistance zone of 0.715-0.7185.
AUD/USD
On the daily chart, the price had a false breakout beneath the support zone 0.75-0.7535. That enhances the harmonic pattern AB=CD further. The pair made a price action (pin bar) at this false break that encourages more the bullish sentiment. If we take into account a divergence in RSI and a breakout of the descending trend line as shown, we think the price is ready for the next move up to 0.7635 then 0.7715
USD/CAD
On the daily chart, the price made its way into the resistance zone 1.2925-1.3 and approached the descending trend line from the high of 2015. The price reversed from these levels, breaking beneath the key support level 1.28. If the daily candle closes under this level, it will prompt the price for more bearish action down to the 1.252-1.243 support zone.
AUD/JPY
On the daily chart, we can see that the price bounced from the support area 80.35-81.2 A well-noticed head & shoulders reversal pattern is shaped. The price is at its second shoulder with a break of the descending trend line as shown. With an oversold condition in the RSI and the breaking of the descending trend line, the price is expected to get back up again to the resistance area of 84-84.35.
USD/JPY
The price is located at a very strong short-selling area, rebounding from the descending trend line starting from 2018 high, which is the same level of 50% Fibonacci, besides breaking its upward trend line starting from its 2011 low. Also reaching the top edge of the upward channel along with forming an AB=CD harmonic pattern and a divergence on RSI. We will wait for a break beneath the upward channel to go short with a target at 108.1 and then at 104.8.
AUD/NZD
On the daily chart, the price bounced from the support zone 1.0475-1.0545. Also breaking a lower trend line followed by a break of the descending channel.
The price has broken the resistance zone 1.066 & 1.073. The harmonic pattern improves the chance of a bullish continuation. Following a break of 1.073 and approaching 1.084, it is assumed to continue its bullish move to 1.102
Forex Academy
