Weekly Wrap: Markets awaiting FOMC Statement

We may see relatively quiet trading as traders await comments from FED and FOMC regarding tapering and forward guidance.

KEY EVENTS THIS WEEK:

AUD: Import prices; PPI q;q

CAD: GDP m/m

CHF: KOF Economic Indicator

CNY: Manufacturing PMI

EUR: Retail Sales; Business Climate; Private Loans; Prelim CPI; Unemployment; Flash CPI

GBP: Net Lending; HPI

JPY: Monetary Policy Statement; BOJ Press Conference

NZD: Business Confidence; Cash Rate; RBNZ Rate statement

USD: Core Durables; FOMC Statement; FED Funds; Advance GDP; Unemployment

Australian Dollar:

As expected the Aussie Dollar continues to trade within a sideways range. A quiet week domestically until we get to Friday's PPI, so the US is likely to be the driver for the Aussie Dollar. Last week closed with a Rikshaw Man Doji and was also an inside week, denoting lower volatility with indecision. We could be witnessing a bearish pennant forming, however we also need to be open to the potential for a basing pattern to unfold. Range-trading strategies are preferred whilst we remain between 0.864 and 0.89.

USD Dollar

The only major currency pair to be Net Long. The USD Index may have seen an end to the correction at 84.50 (for an A-B-C correction) with a break above 86.10 swing high targeting the 86.86 highs. Last week closed to confirm a Bullish Piercing Line to further suggest the correction may have completed. Thursday will attract the most attention by traders as we have FOMC statement, rate decision and Advance GDP. We also find out if tapering finally ends, or gets extended.

Euro

A bearish Inside week suggests 1.288 was a swing high and I'll consider fading any rallies up to 1.274. Net Shorts have increased yet again. Most of the data this week is from Germany, but the headline figure form the Eurozone will be the Flash CPI.

British Pound

GBPUSD has closed within a 35 pip range for the past three weeks, which has seen a high-low range of 350 pips. The Bullish Pinbar 2 weeks ago was followed by a Riskshaw Man Doji to show a lack of direction. However I suspect 1.588 is a swing lo and for the potential retracement towards 1.63. Several MPC members speak this week which may shed light on the likelihood of voting members to dissent but other than this we are very light on UK news.

Japanese Yen

USDJPY may have seen the corrective low at 105.20 which would imply new highs over the coming week/s. Today saw the pair gap up from Friday's close and traders have already closed this gap - if this holds as support then we may see 'buy the dip' strategies at play until we approach the US data dump on Thursday AM (in Australia).

New Zealand Dollar

Business confidence peaked in Febuary and is expected to soften further this Wednesday. However the headline figure is oin Thursday's rate desicion and RBNZ rate statement. With CPI coming in weaker than expected we doubt RBNZ will be raising interest rates again this year, however an unexpected raise should support NZDUSD and keep it firmly above 77c.

Gold

The week closed back below $1240 and produced a Shooting Star Reversal, meaning the Double Top is still an option. With the USD Index suggesting a swing low is in place then if we see the Dollar continue to strengthen then this should see Gold remain firmley below $1240.