© Dukascopy Bank SA
As we already mentioned, there will be several important news releases from the world's largest economy this week, which all will have a direct impact on the pair. The economy is recovering from a winter slump and each stronger-than-expected report will be highly welcomed by markets. At the same time, Japan is likely to post a 4.2% expansion for the first quarter on an annual basis on Wednesday. Solid growth will diminish hopes for fresh stimulus and provide another reason for Kuroda to express his confidence about the future economic performance.
Traders are getting less and less optimistic about the pair with each week, as the proportion of optimists plunged to 62.5% this week from almost 69% a week earlier. The consensus forecast stands however, for 101.92– below Tuesday's price above 102– mark. Some of the traders even believe the decline can be even more impressive, with Audriua saying "in my view market is gathering volume to go down and push through 101.300 support area." Unless the pair trading between 104.16 and 100.74 the outlook will be neutral, as the pair has been fluctuating between these levels since January 23.
© Dukascopy Bank SA