Last week's overview, this week's key events

Source: Dukascopy Bank SA
The Euro and the greenback were two the most attractive currencies for investors last week, with such crosses like EUR/SEK, USD/SEK, USD/RUB and EUR/CAD soaring 1.93%, 1.89%, 1.75% and 1.64% over the last five trading days. At the same time, investors were able to earn even more by investing in XAG/USD (+4.03%), Nikkei 225 Index (3.12%) as well as Britain's benchmark index FTSE-100 that rocketed 2.97% over the week.

As it was predicted earlier the cable was highly affected by fundamental news from the U.K., such as MPC votes, BOE's comments and data from the nation's labour market that all pushed the Pound lower. On a hourly chart the cable has formed a falling wedge pattern after hitting 1.6823 on February 17. During the whole week the pair was moving in pattern's boundaries, but it seems it will be extremely difficult for bears to push the pair below a weekly pivot and 200-hour SMA at 1.6639. Moreover, after inching slightly below this level the pair soared even above pattern's resistance, suggesting the depreciation will be short-lived. This week markets will focus on the BoE's inflation report on Tuesday and second GDP estimate a day later. Moreover, on Friday Mark Carney will participate in a panel discussion at the Symposium on Financial Stability and the Role of Central Bankers. Keeping in mind central bank's confidence about economic growth, they are likely to confirm the ongoing recovery and most likely will fail to assure markets the policy will remain accommodative for some the foreseeable future. Therefore, the Pound is projected to strengthen versus other major currencies during the week, while the cable can aim this year's high at 1.6823.

The most traded currency pair is still trading in boundaries of a channel up pattern that can be found on a 4H and 1H charts. The pair was bounded in a 87-pip range last week, refusing to go above or below 1.37 level. Nevertheless, it seems that 1.3683 is a key level for short traders and as long as the pair hovers above it, the outlook is bullish. While almost 66% of Dukascopy traders are holding short positions on the pair, 59% of all pending orders are placed to buy the pair, while trader Valen920 believes the pair will hit 1.3810 by this Friday, February 28. The pair has a potential to perform a strong rally this week, as the greenback will most likely remain under pressure until the release of the U.S. Q4 GDP data that is expected to show the economy has lost the momentum over the corresponding period. The world's largest economy has been reporting weak data from practically all sectors of the economy, including the labour and housing markets. Nevertheless, the Fed has expressed only hawkish comments, saying they will start raising interest rate as soon as the unemployment hits 6.5%, citing broadening economic recovery. However, even Fed's confidence cannot push the GDP higher, hence the U.S. Dollar is projected to decline this week, with the EUR/USD first aiming 1.3758 and in case it is breached than 1.3810 will be put on the map.
Back to articles

Actual Topics

Subscribe to "Fundamental Analysis" feed

Subscribe
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.
To learn more about Dukascopy Bank Binary Options / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Crypto Trading / CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Business Introducer and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.