The week ahead will be very thin and even more subdued at the end of the week, as the markets will close for Easter Holidays. Yesterday has been choppy and most currencies have been range-bounded heading into holiday mood.The U.S. Existing Home Sales plunged but some comments from two Fed officials that rates may rise in April underpinned the currency. The Existing Home Sales plunged by 7.1% in February from last month’s figure to a seasonally adjusted annual rate of 5.08M. Eurozone was broadly unchanged as the flash Consumer Confidence for March slumped more in the negative territory. It fell to -9.70 the lowest level since March 2014.

Eurozone Consumer Confidence

The pound edged lower against almost all the G10 currencies as they keep highlighting the bad consequences of UK economy leaving the EU in combination with government cuts over the disability spending. The U.S. stocks have recorded smooth gains with no a specific sector to outweigh of losses or gains. Today, the economic calendar is relatively busy with UK Inflation the spotlight of the day and a smattering low-level data out, like ZEW and IFO Surveys and Markit PMIs.

EURUSD

EUR/USD – Technical Outlook
The EUR/USD pair has started the week with a slightly positive tone (EUR/USD +0.12%), following three strong consecutive positive weeks ahead of the German IFO and ZEW. The pair has recovered well from the 1.1060 lows seen earlier in the week, and which also coincides with both the 4-hour 50-SMA and the 200-SMA, and surged above the suggested target at 1.1100. The dollar erased some gains versus the euro the last few hour as the pair is building a new strong support around the psychological level of 1.1200. The initial support will arrive at March 10 highs - 1.1219, below which would then run towards 1.1200 and then at the significant level of 1.1060, which coincides with both the 50-SMA and the 200-SMA on the 4-hour chart. On the upside, resistance will be seen at Thursday’s high at 1.1344 and above there at 1.1377.

GBP/USD – Technical Outlook
The GBP/USD pair has been choppy and fairly directionless the last couple of hours following the aggressive buy from the 1.4100 area. The pair had another test of the upside, reaching 1.4515 before grinding lower into the Asian session to finish below the session lows. The next level to watch, ahead of the release of the February CPI, PPI, RPI, will be the 1.4350 and then 1.4250, which coincides with the 50-SMA on the 4-hour chart. Meanwhile, technical indicators are providing mixed signals. Relative Strength Index (RSI) has flattened out just around the mid-point at 50 while the Stochastic indicator has dropped below 20. Furthermore, MACD oscillates above the zero line, however, it fell below its trigger line, and, therefore, a cautious stance is required for today.

GBP

USD/JPY – Technical Outlook
The U.S. dollar is continuing to push higher against the Japanese yen currently trading above 112.00. However, USD/JPY is continuing to struggle near the psychological level of 111.00, following several failed attempts to break below it. The charts are looking rather mixed and it will continue to be the Fed that drives the direction in the bigger picture for this pair, so a cautious stance is warranted as far as the pair moves in that sideways channel.

AUD/USD – Technical Outlook
The AUD/USD pair has traded in a tight range 0.7568 – 0.7627 and currently sits pretty much in the middle, leaving the outlook unchanged. Technically, on the upside, back above 0.7630 would possibly look to retest 0.7680. On the other hand, if the bulls fail to sustain any gains above the intraday key support of 0.7568, further losses look possible and would then look to test 0.7540 and then 0.7525.

Gold – Technical Outlook
The yellow metal extended its losses following several numerous failed attempts to break above the key resistance level at $1,271, as well as above the significant level at $1,283. The precious metal has been moving in sideways channel, looks more like an ascending triangle, since early February. Technically, despite the brief retracement below $1,250, the outlook remains unchanged and it would appear that the $1,220/$1,280 range is set to remain intact for now.

Brent & WTI Crude Oil – Technical Outlook
Brent Crude Oil surged to fresh 2016 yearly highs the previous week, following five strong winning weeks, which added more than 15%. The catalyst for the latest move appears to have been renewed weakness in the dollar which came as the Federal Reserve revised its rate hike forecast for this year from four to two. With the dollar having been beaten around the globe, I would expect further upside pressure to the oil prices. Therefore, the next level to watch to the upside will be the key resistance level of $45.00.

The WTI surged above the psychological level of $40.00 and is now trading near in a fresh 2016 highs. Technically, above the $42.45 session high would see a run back to $43.00 and to the significant level of $45.00.

S&P500 is Looking More bullish
The S&P500 index has been looking more bullish over the last couple of weeks but I am not yet convinced that the correction is over. The index ran into strong resistance around 1945 and more recently from the key level at 2000, as well as from both the 50-SMA and 200-SMA. The index during Friday’s session pushed above a key level of resistance at 2050, bringing further ratification of the bullish outlook seen since rebounding from the key support level at 1800.

The 4-hour chart is showing a new-found support around the 2000 barrier and the daily 200-SMA, indicating the potential for a further push to the upside. However, it seems that the index will only continue to be bullish, in such an overbought environment, when we should see a close above both the descending trend line and the psychological level of 2135. Furthermore, the lower time-frames indicate there is a possibility that this could occur. Technical studies support the notion since the MACD is above the zero line, which is also known as the center line. In addition, the ADX crossed above 20 and this means upside momentum is increasing. Alternatively, given how aggressive the rally has been over the last few weeks, we could see a brief period of consolidation between the 2000 and 2120 levels. Buying dips still appears to be the main game for the US500 index.

Daily U.S. Market Summary

What to watch today
On Tuesday, expect from the UK Inflation Report, the Markit PMIs, the German IFO and ZEW Surveys will attract market’s attention. Firstly, during the morning, the German IFO Survey will be released.
The Business Climate and the Expectations are predicted to have improved in March while the Current Assessment to have declined slightly, compared to the last month. Shortly afterwards, investors will keep an eye on the flash Markit Purchasing Managers’ Indexes for March. Eurozone’s Manufacturing PMI is expected to rise to 51.4 from 51.2 while the Services PMI to remain unchanged at 53.3.

Meanwhile, going to the UK, February’s final Inflation Report will be published. The year-over-year Inflation Rate for February is forecasted to have remained at 0.3% and to rise by 0.4% from -0.8% before. The month-over-month indicator is expected to turn back to positive at 0.4% from the tumble of -0.8% in January.

UK Inflation Rate

The Producer Price and Retail Price Indexes will be out as well. A while later, the ZEW Current Situation and Economic Sentiment for March are predicted to come out and improve to 53.0 from 52.3 before and 5.9 versus 1.0 prior, respectively.

We then turn to Unites States, the economic calendar is very quiet yesterday with only a smattering low-level data out scheduled. The preliminary Markit Manufacturing is forecasted to rise at 51.8 from 51.3 before. Other indicators regarding manufacturing and housing sectors will be released.

Economic Calendar

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