Hot Topics:
- What kind of trigger could boost the Dollar?
- Will the Eurozone continue to bring weaker economic data?
- Could the UK CPI have reached their peak?
- Fear of a new war or do we expect a new bearish leg?
- A new higher high in oils is expected before it starts a corrective move.
- Downward continuation limited before the BoC decision.
What kind of trigger could boost the Dollar?
The recent tensions originated by the strike made between the US, UK, and France on Syria and the reactions of Russia condemning the act could continue to increase the volatility in the markets. Another triggering factor could be the one originated by the US Retail Sales, which fell in February -0.1%. In March the analysts’ consensus is expecting an increase near to 0.4%. In technical terms, the greenback is still in a range and could be making a bottom formation. The control levels are 88.66 to 89.16. Invalidation level is below 88.1.
Will the Eurozone continue to bring weaker economic data?
This week the Germany and Eurozone ZEW economic sentiment reports were released. Particularly, the level of confidence fell to 13.4 in February from 29.3 reported in January. Probably it could be produced by a stational factor, like the weather conditions (winter time). In the panoramic chart, we are watching the current structure, as a corrective formation that could reach new lows in the 1.196 – 1.20 area. The invalidation level is above 1.2476.
Could the UK CPI have reached their peak?
In the last months, the British CPI apparently reached their peak, with a CPI of 3.1% (YoY) reported in the past year in November. Then in December and January, it achieved a 3.0%, but in February in line with other activity indicators, it has shown a decrease in the economic activity. It is probable that at these levels we are witnessing a stabilisation of the economic activity. In the same way, on the chart, we are watching a potential top pattern as a mother wave that could initiate a new bearish cycle with a target at the base of the sideways channel. The invalidation level is above 1.4345.
Fear of a new war or do we expect a new bearish leg?
The Japanese currency is moving in an ascending diagonal pattern in search for its long-term 108 level resistance. Despite the US attacks against Syria, the price continues moving according to our vision. We expect to find sellers once the price strikes the 108.2 – 108.4 area, starting a new bearish leg.
The correlation between the Nikkei 225 and the USDJPY pair, bring us a clue about the moves that it could make. The first scenario is a breakout above 21,957 pts for a bullish continuation move, drawing the 22,764 – 23,050 area as a target. In the second scenario, if the price moves making a new bearish leg, we expect that move to reach the 20,660 zone, making a “mother wave” and starting a new bullish cycle.
A new higher high in oils is expected before it starts a corrective move.
Last week the oils, Brent and WTI, reached their highest levels since 2014. For inverse correlation and as it was envisioned by us on January 12th, the Crude Oil VIX ETF reached the Potential Reversal Zone, where it might start a bullish cycle. In practical terms, once the WTI reaches the 67.8 – 68.7 area, it is likely that it begins a corrective move.
And concerning Brent Oil, we could see it at a new high, to 72.9 level, before it starts a falling move.
Falls continuation is limited before the BoC decision.
Next Wednesday 18th the Bank of Canada (BoC) Monetary Policy Meeting will take place. The analysts’ consensus expects that the decision will maintain the interest rate at 1.25%. The price is making a downward cycle since March 19th, and our vision is that the Loonie might fall to the area between 1.245 – 1.254, where it could start an upward move, at least up to 1.274. The invalidation level for the ascending movement is 1.225.
