Economic Data, Powell Speech To Drive Headlines Tuesday

OctaFx Analyst Team OctaFX

A combination of economic data and monetary policy speculation will dictate market action on Tuesday.

The economic data wire begins in Europe at 05:45 with a report on Swiss unemployment. Switzerland’s jobless rate is projected to hold steady at 2.9% in April.

German industrial production will make headlines at 06:00 GMT. Output at German factories is forecast to rise 0.8% in March, translating into an annualized growth rate of 3%.

The German government will also report on the national trade balance at 06:00 GMT. Berlin’s monthly trade surplus is forecast to expand to €27 billion in March from €20.7 billion in February. In seasonally adjusted terms, the surplus likely expanded by €800 million to €20 billion.

Exports are projected to rise 1.8% month on month. Imports are forecast to grow.

Shifting gears to North America, Federal Reserve Chairman Jerome Powell is set to deliver a speech at 07:15 GMT. The Fed chief led the central bank in holding interest rates steady last week. Policymakers are expected to continue raising interest rates when they meet in June.

In terms of economic data, the American Petroleum Institute (API) will release its weekly report on US crude inventories. Official inventory data courtesy of the US Energy Information Administration (EIA0 are due the following morning.

US oil prices surged on Monday to their highest level in three-and-a-half years. There’s reason to believe that crude prices will continue trekking higher in the short term as OPEC supports sustained output cuts through 2018.

EUR/USD

Europe’s common currency edged higher at the beginning of the week but failed to sustain a consistent rally. As a result, EUR/USD settled around 1.920, where the pair was last seen trading. EUR/USD has established a bottom near 1.1900, with prices bottoming out of the hole early on Monday. However, the overall trend remains firmly bearish with the US dollar aiming higher.

GBP/USD

Cable resumed its tepid recovery on Monday, as prices continued above 1.3570. However, the upside remains limited by a strengthening US dollar. GBP/USD faces immediate support at 1.3510. On the opposite side of the ledger, resistance is seen at 1.3610. The pair could experience narrower trading ranges ahead of the Bank of England policy decision due on Thursday.

USD/JPY

The USD/JPY continued lower at the beginning of the week, with prices edging below 109.00. At the time of writing, the pair was trading at 108.98, where it was little changed compared with the previous close. Immediate support is located near 108.50, which corresponds with the 24 April swing low. On the flipside, immediate resistance is located near 109.40. Demand for USD/JPY is intricately tied to risk sentiment in the broader financial markets.

Author

OctaFx Analyst Team

OctaFX

OctaFX is a market-leading forex broker, providing personalised forex brokerage services to customers in over 100 countries worldwide.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.