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

Source: Dukascopy Bank SA
During the last week traders were able to earn more than 4% by investing in Bank of America, JP Morgan Chase & Co. and in palladium, as their prices soared 4.84%, 4.51% and 4.28%, respectively. When speaking about currencies, the most attractive pair was AUD/JPY that rocketed 2.74%, with Aussie rising 0.61% against other currencies, while Japanese Yen sank more than 2% on comments about more than a trillion dollars large public pension fund in the world's third largest economy.

Over the observed period the most traded currency pair performed a 207-pip rally, mostly pushed up by the ECB's comments. While the central bank stayed pat on its monetary policy, the ECB also upgraded its growth outlook to 1.2% for this year, while also lowering its inflation estimate. The inflation is now expected to stand at 1.0% in 2014– twice less than the official target, compared with 1.1% expected earlier. However, during the press conference, Draghi pointed out that deflation risks in the Eurozone are easing for now, and pledged inflation will hit the desired 2% by the end of 2016. These comments are diminishing hopes for another rate cut or an introduction of the U.S.-style asset-purchase programme. Therefore, it was not a surprise that the single currency received a strong bullish bias, with EUR/USD skydiving to 1.3915– the highest level since October 2011. While fundamental data are mixed, with the U.S. labour market showing surprising resilience in February (payrolls at 175K versus 151K expected), technical analysis is suggesting the outlook is bullish, as after Thursday's and Friday's rally the pair has breached the important resistance at 1.3852. The pair is no longer trading in boundaries of the rising wedge pattern on the 4H chart. In case the pair moves above recent high once again, the next stop will be located at a weekly R1 at 1.3959. Amid a lack of fundamental data from Europe, U.S. retail sales and producer prices as well as consumer sentiment from University of Michigan will have a significant impact on financial markets. Retail sales are most likely to surprise markets to the downside, due to severe weather conditions in February, while a gauge of consumer sentiment is projected to pick up in March, bolstering the case consumer spending will continue driving growth in the world's largest economy.

Nevertheless, this week's spotlight will be RBNZ's meeting on Wednesday, where New Zealand is poised to become the first developed country to start raising interest rates. With stable economic improvement, rising inflation expectations and a need for higher interest rates all these factors are adding more pressure on the RBNZ. Currently, vast majority of analysts believe the central bank will increase its key refinancing rate by 25 basis points in March, bringing an end to the three-year period of record-low borrowing costs. Therefore, the Kiwi should rocket versus other currencies. The NZD/USD is facing a strong resistance around 0.8550, however, if it is breached, 0.8627 will be put on the map. The fact the pair has penetrated the resistance line of the symmetrical triangle pattern that was formed on the 4H in April is also adding to signs the pair will continue climbing higher.
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