Are you fundamentally disappointed this week? Me too: we had ECB waving the flag of extraordinary measures to fight low inflation (not even expecting towards real deflation?) and US payrolls numbers almost meeting expectations presenting a nice bounce after the wild winter that froze the economy, albeit not enough to trigger a strong dollar come back. But at the end of the day, majors are still missing definitions when it comes to trends, and that’s no good news.
Indeed, fundamental data has its influence in currencies in the long term, and for the most produce intraday noise when released. News helped greenback advance against its European rivals, but key levels had held for now and dollar buyers may get quickly disappointed and run away if the situation extends into next week, leaving the American currency vulnerable to the downside. Commodity currencies however, are nicely up on self strength and will get more attention the upcoming week, with most of the fundamental action taking place in Asia.
Keep an eye on Asia
For the most, Australian dollar will be in the spotlight, with local employment figures and several Chinese releases that will keep AUD/USD and AUD/JPY busy: as better the numbers, the more chances of an Aussie extension of current upward momentum, particularly against safe havens. Worth’s reminding the AUD/USD has for now a triple roof in the 0.9300 figure, and if somehow data disappoints and the neckline of 0.9215 gives up, Aussie buyers may capitulate.
Germany and the US
In Europe, there’s little coming from the EU itself, but some major readings from Germany, including Industrial Production, Trade Balance, and inflation readings all through the week. With the EUR/USD barely above key 1.3660 price zone support, there’s quite a high risk that worse than expected readings push the pair lower; keep in mind however, that in the long term view the movement could extend down to 1.34 and remain just corrective, without really affecting the bullish trend.
In the US, several FOMC members will give different speeches, while the entity will also release the Minutes of its latest meeting: trading will be looking for tips on whether the Central Bank will rise rates or if it will continue in its $10B per month tapering, albeit I would expect no actual revelation and little new on them.
Technical trading seems pointing to rule upcoming week, but afore mentioned data will surely help defining where strength is across the board.
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