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

Source: Dukascopy Bank SA
The Aussie, kiwi and loonie were last week's top performers, each adding 2.54%, 1.24% and 1.68%, respectively, as previous week's comments from central banks boosted investors' interest in these currencies. At the same time, Dukascopy currency index showed that the single currency lost 0.92%, while the greenback plunged 0.66%. Therefore, the most traded currency fell less than 100 pips and was not able to move below the important support level at 1.3715, represented by a weekly and daily S1. What is more important, is the fact the Sterling index was almost unchanged over the period, despite the release of the CPI, retail sales and GDP figures. It means that Carney's message has finally been understood by markets and only a high divergence from the expected figure can provide a strong impact on markets.

Dukascopy traders were selling the kiwi in 75% of the time, and 75% of opened positions are short, suggesting traders do not believe the NZD/USD pair will continue its appreciation. The only report that was published last week from New Zealand was the trade balance. The reading surprised markets to the upside, as demand from China was still strong. Moreover, after RBNZ's comments more traders jointed bulls, pushing the pair to 0.8697. The pair is currently just 67 pips from the resistance line of the channel up pattern on a 4H chart and 170 pips from the historically highest level.

This week's main highlight will be the ECB's meeting, as Draghi and his team will try to solve the puzzle since Friday's report from Germany showed inflation slowed to 0.3% in March. Speculations the ECB will pull the trigger next week have heated up after inflation rate moved back into dangerous zone at 0.7%. The upcoming meeting can potentially become a serious threat to the region's financial system and currency markets. However, this scenario can work only in case the ECB will go ahead with the increasingly popular idea of implementation of the negative deposit rate on bank deposits, hence, forcing domestic banks to pay for the privilege to park their money at the central bank. Last week ECB's officials have already signalled it is a top choice, while the IMF claimed the SNB should consider the similar measure. Any dovish comments from the central bank will provoke a massive selloff in the Euro. Key support lines for EUR/USD are located at 1.3715 and 1.3633. Moreover, slightly lower at 1.3585 is located a 200-day SMA and a support line of the rising wedge pattern on a daily chart.
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.