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- Next week the spotlight will be on the FED
Next week the spotlight will be on the FED
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Loading..."All hail KingUSD" or at least that's what most investors want. Everyone expects the Federal Reserve to raise the interest rate next week. But the market has already priced this interest rate rise. What does this mean? We will probably not see a significant rise in USD, and many market participants will be disappointed again. The hope for a USD appreciation next week comes from the FOMC press conference and the central bank's forecasts for economic growth. If optimistic sentiment is maintained, it is very likely that we will see a strengthening of the US currency.
Next week we will also see the decision on the interest rate and the Bank of England. Market expectations: 2% chance for hike ... however, news is important and should be careful about high market volatility. Analysts predict that at its May meeting, the central bank of England will raise 25 basis points. On Tuesday, the island's inflation report will shed more light on what the bankers could do. 3% inflation, at an interest rate of 0.5% .. is a big difference. If inflation in the country continues to rise, BoE will be forced to raise interest rates at a faster pace.
Despite the departure of Gary Cohn and Rex Tillerson from the administration of Donald Trump, the market is rather positive. In the past week there were downward moments, but positivism prevailed. The tech benchmark, Nasdaq, has reached a new all time high. As if the market was not scared by the replacement of two of the main figures in the presidential administration.
What does the technical analysis of the main currency pairs tell us and what can we expect next week:
EUR/USD: The pair is still consolidating. The ceiling of traders who agree to buy EUR based only on expectations that the ECB will reduce QE may have already been reached. The double has made several failures of the SMA 50. For the time being we expect a break below 1.21 or a break above 1.255 to take action.
GBP/USD: Rather medium-term downward trend. We see some lower peaks, but we do not have a strong impulse to bring the price below 1.3700. The price is still above the SMA 200, indicating that the bulls still control the situation. More logical for longs when reaching main support or shorts when breaking and keeping the price under this support.
USD / JPY: Downward trend, lower peaks and deeper bottoms. The price stays under the resistance and there are no indications that it will return over it (at least for the time being). The price is below the SMA 200/50 - a negative signal. It is good to use pair correction to look for short positions.
Which economic data will move the market next week:
Monday
1:50 Japan - Trade Balance
12:00 EU - Trade balance
Tuesday
2:30 Australia - RBA Meeting Report
11:30 UK - CPI
12:00 Germany - ZEW's Economic Trust Index
Wednesday
11:30 UK - Employment Level
20:00 United States - Decision on the Base Interest Rate
22:00 New Zealand - Decision on the Base Interest Rate
Thursday
2:00 Australia - Change in employment
11:00 Germany - Manufacturing PMI
11:30 UK - Retail sales
14:00 United Kingdom - Decision on the Base Interest Rate
14:30 US - Initial jobless claims
Friday
1:30 Japan - CPI
14:30 Canada - CPI
14:30 Canada - Retail sales
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