Easter Week Forex Predictions You Should Read Now

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Easter Week Forex Predictions You Should Read Now

Trading volumes remain thin as major FX hubs across Europe and the US are closed in celebration of Good Friday and the East er Holiday. However, the US Dollar remained strong across the board and made solid advancements against its main counterparts this week. Whether these gains will extend into next week remains to be seen so let’s have a look and gauge the most probable scenarios.

EUR/USD – Technical Outlook

Currently trading at 1.1245, the pair had a bearish week, partly due to mixed German economic data but US Dollar strength played a big role as well. T he bulls failed several times to break the resistance at 1.1325, which resulted in a sell-off that took price below the 100-period Exponential Moving Average on the 4-hour chart. This pair is now in close vicinity of support at 1.1215.We will likely see a touch of the mentioned support but low volumes will be present through the first part of the coming week. This may generate alternating periods of high and low volatility, with choppy price action, until the holiday is over.

GBP/USD – Technical Outlook

This pair is trading right on the 1.3000 psychological level after breaking a bullish trend line. There is a chance of an extended drop so be careful with your trades. The break of the long term bullish trend line (daily chart above) marks an important victory for the bears and opens the door for a touch of 1.2800 – 1.2790. However, such a move will take more than one week unless something outstanding happens on the political scene. A quick climb above the 100 days EMA (daily chart above) and above the trend line would invalidate a bearish scenario for the time being.

USD/CHF – Technical Outlook

The US Dollar posted solid gains against the Swiss Franc over the last 4 weeks. This week the pair finally managed to break the long term resistance located at 1.010. The weekly chart above shows the pair edging above 1.010 resistance and, although the week is not over, this looks like a true break. If we get a weekly close above resistance the 1.01 level will turn into support. Once confirmed that will open the door for an extended climb with 1.033 as target. On the lower time frames, the pair is overbought which indicates that a retracement may be in order before other significant advances take place.

USD/JPY – Technical Outlook

This pair is currently trading at 111.90 and in close vicinity of the previous resistance at 112.15. Recent price action created a double top at 112.15 and will determine the next medium-term direction. A bounce lower will probably take the pair into the 100 days EMA and into the support at 110.90 – 111.00, while a break will open the door for 113.00. It’s possible that either scenario will take more than a week to develop, considering the low volumes generated by Easter celebrations, so don’t get too excited by near-term price action.

EUR/USD Forecast Apr. 2-6 – Will it pick a direction after Easter?

EUR/USD made a move to the upside but quickly returned to the known range. Will it pick a new direction now? Inflation figures and PMI data stand out as a new quarter begins. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Germany’s inflation advanced in March but fell short of expectations. Import prices followed the same path and Spain’s CPI also disappointed. In the US, GDP was upgraded to 2.9% in Q4 2020 while other data did not surprise. Trade tensions eased with some positive noises from China and the US while stocks remained jittery. The turbulence eventually slowed down as markets set into the long weekend.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

  1. German Retail Sales: Tuesday, 6:00. German consumers squeezed their shopping for the second month in a row: sales dropped by 0.7% in January. A bounce of 0.7% is on the cards for February.
  2. Spanish Unemployment Change: Tuesday, 7:00. Spain, the fourth-largest economy in the euro-zone, suffers from a high unemployment rate. Its early measure of changes in the numbers of the jobless is an important indicator. After a drop of 6,300 in February, March is expected to see a slide of 47,500.
  3. Manufacturing PMIs: Tuesday: 7:15 for Spain, 7:45 for Italy, the final French number at 7:50, final German figure at 7:55 and the final euro-zone number for March at 8:00. Back in February, Markit’s forward-looking indicator for the manufacturing sector stood at 56 points, reflecting solid growth. A drop to 54.7 is on the cards now. Italy, the third-largest economy, had a score of 56.8 and 55.6 is projected now. The initial figure for France for March stood at 53.6, for Germany at 58.4 and for the euro-zone at 56.6. A confirmation of these initial reads is likely now.
  4. Flash inflation: Wednesday, 9:00. The initial read for inflation in March is expected to show an increase in CPI from 1.1% to 1.4% y/y and core CPI from 1% to 1.1%. However, expectations may have dampened after Germany’s figures came out below expectations. The ECB is likely to taper down its bond buys in September and end it completely at the end of the year. However, there is a fierce internal debate within the Governing Council between the doves such as President Draghi and the hawks, led by the leading candidate to replace him, Jens Weidmann. Inflation is the single needle in the ECB’s compass and any rise or fall matters.
  5. Unemployment Rate: Wednesday, 9:00. The jobless rate in the euro-zone has been falling gradually. It reached 8.6% in January and yet another drop to 8.5% is expected now. The unemployment rate was above 12% in 2020.
  6. German Factory Orders: Thursday, 6:00. The volume of orders dropped by a whopping 3.9% in January, but it is important to remember that the indicator is quite volatile. An increase of 1.6% is projected for February.
  7. Services PMI data: Thursday, 7:15 for Spain, 7:45 for Italy, the final French number at 7:50, final German figure at 7:55 and the final euro-zone number for March at 8:00. Spain’s services PMI was 57.3 in February, and a drop to 56.2 is projected for March. Italy had a level of 55 points and a significant drop to 53.9 is on the cards now. The initial French figure for March stood at 56.8, the German one at 54.2, and the whole euro-zone had 55. The final print is expected to confirm the initial estimates.
  8. PPI: Thursday, 9:00. Changes in producer prices feed into consumer prices. Back in February, the PPI rose by 0.4%. A flat read is expected for March. Note that German import prices dropped, indicating a potential downturn here as well.
  9. Retail Sales: Thursday, 9:00. The volume of retail sales slipped by 0.1% in January and February is expected to show a bounce back of 0.6%. Germany’s numbers published earlier in the week may impact the expectations for the figure for the whole of the euro-zone.
  10. German Industrial Production: Friday, 6:00. Similar to the factory orders measure, also industrial output slipped, but only by 0.1% in January. A rise of 0.2% is expected now.
  11. French Trade Balance: Friday, 6:45. The second-largest economy had a wide trade deficit of 5.6 billion euros, contrary to Germany’s chronic surpluses. A slightly narrower deficit is on the cards now: €5.3 billion.
  12. Retail PMI: Friday, 9:10. Markit’s last word for the week comes via the gauge for the retail sales. In February, the figure stood at 52.3 points, just a bit above the 50 point mark that separates expansion and contraction. A similar figure is likely now.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar kicked off the week by moving higher, eventually rising above 1.2450 mentioned last week. The pair then turned south, ending the week close to where it started it.

Technical lines from top to bottom:

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1.2555 is the three-year high the pair reached in mid-February. 1.2477 was the high point in March but did not hold up for long.

1.2445 capped the pair in early March and remains important. The next important level is only 1.2335 which supported EURUSD in mid-February and is a pivotal line.

Further below, 1.2270 was a swing low in mid-February and mid-March. It is followed by 1.2240 that supported the pair during two consecutive days in mid-March.

1.2155 was a low point in early March and the last line before 1.2090, the 2020 high.

I am bearish on EUR/USD

In this ugly contest, the euro is now the uglier currency, with slowing inflation and weakening growth. Economic signs from the US economy have been improving. This bias may change quickly though.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay’s Google Profile

AUD/USD Forecast Apr. 2-6 2020 – sliding lower in the channel

The Australian dollar continued struggling and lost further ground leading into Easter. Will its fate turn around in the second quarter? Here are the highlights of the week and an updated technical analysis for AUD/USD.

Fears of a trade war actually waned ahead of the holiday, but the Aussie continued its downside slide. The RBA may like it. The continued drop of the pair mostly came from the American side: US GDP was upgraded to 2.9% annualized growth in Q4 2020, better than had been expected.

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

  1. MI Inflation Gauge: Monday, 1:00. The Australian authorities publish inflation figures only once per quarter, so this figure from the Melbourne Institute complements the data.
  2. Chinese Caixin Manufacturing PMI: Monday, 1:45. China is Australia’s No.1 trading partner and the independent forward-looking gauge for the Chinese economy impacts the Aussie. In February, the indicator stood at 51.6 points. An increase to 51.8 is on the cards now.
  3. AIG Manufacturing Index: Monday, 23:30. The Australian Industry Group’s measure showed robust growth in the manufacturing sector: 57.5 points, significantly above the 50-point threshold that separates growth from contraction. A slide could be seen now.
  4. ANZ Job Advertisements: Tuesday, 1:30. The Australia New Zealand bank’s gauge of jobs dropped by 0.3% in February. This early indicator of the labor market may tick up in March.
  5. Rate decision: Tuesday, 4:30. The Reserve Bank of Australia has not changed its interest rates since 2020 and this March decision is unlikely to be very different with a consensus that the interest rate remains at 1.50%. The team led by Phillip Lowe will likely continue saying that the high value of the currency weighs on reaching the inflation goal despite the recent drop of the A$ against the greenback. Household debt and the slow pace of growth in wages are sources of worry while the relatively low unemployment rate and exports are still doing well. Any change in the tone may move the Aussie as expectations are very low for any kind of move. Markets predict no rate hikes in 2020.
  6. Commodity Prices: Tuesday, 6:30. As a commodity exporter, this monthly measure of commodity prices has an impact, even though prices of key metals change on a daily basis. A y/y drop of 1% was recorded in February.
  7. Retail Sales: Wednesday, 1:30. The volume of retail sales rose by a disappointing rate of 0.1% in February, providing evidence that internal consumption is not going anywhere fast. A faster growth rate of 0.3% is on the cards now.
  8. Building Approvals: Wednesday, 1:30. The change in building consents is somewhat volatile, but still provides a snapshot of the construction sector. After a jump of 17.1% in January, a drop of 4.8% is on the cards now.
  9. AIG Services Index: Wednesday, 23:30. This forward-looking index has shown OK growth in February: 54 points. A similar number is likely now.
  10. Trade Balance: Thursday, 1:30. Australia surprised with a wide surplus in its trade balance in January: A$1.06. A narrower surplus is on the cards now: 0.72 billion.

*All times are GMT

AUD/USD Technical Analysis

Aussie/USD started off the week with an attempt to move to the upside but struggled and fell to the lowest levels since December, nearing the 0.7650 level mentioned last week.

Technical lines from top to bottom:

0.8050 capped the pair in August and also temporarily in January, on its way up. 0.7990 was the high point in February and protects the 0.80 level.

0.7890 worked as support in February and resistance in October. 0.7780 capped the pair in late March and also was a pivotal line in February.

The round level of 0.7710 was resistance in December and also in March. The new low of 0.7675 is next.

Lower, 0.7650 worked as resistance in several occasions in late 2020. The last line to watch is the round 0.75 level.

Downtrend channel

As the chart shows, the pair is trading in a downtrend channel. This is a bearish sign.

I remain bearish on AUD/USD

The US Dollar is gaining its footing once again and the Australian dollar does not have anything to offer against it.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay’s Google Profile

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