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

Source: Dukascopy Bank SA
Dovish RBA, worrying notes from the S&P have all weighted on the performance of the Aussie. The currency plunged 1.16% over the last week, as S&P ratings agency warned the AAA rating could be revised unless the government makes substantial cuts to the budget. It seems that the release of the latest budget will have a long-term bearish impact on the Aussie and fundamentals. Last week's report has already shown that Oz consumer moral plunged to the lowest level since August 2011, as households are afraid of the looming spending cuts and a new tax on high-income earners. In case this week's private capital expenditure report disappoints markets as well, we can see another sharp rally to the downside, meaning the RBA can revive its rate cut speculations once again. At the moment, Dukascopy traders are mixed on the Aussie, as they are selling and buying the currency in almost equal number of cases. Aggregate technical indicators, however, are pointing at the upcoming rebound, hence, long traders can focus on a recent high and a resistance of the falling wedge pattern (1D chart) around 0.9374. At the same time, a move below major level at 0.92 will clear the way for the weekly S1 and 200-day SMA at 0.9176/61.

Meanwhile, the Japanese Yen is still climbing higher, with the JPY currency index rising 0.18% over the last 5 trading days and gaining 0.75% during the month. It is important to mention that USD/JPY has been trading in boundaries of the symmetrical triangle on the daily chart since the beginning of this year and no later than on June 3, the pair will penetrate either upper or lower pattern's boundary. Additionally, trading volume is receding, and statistically, it does so in 86% if the time, also bolstering the case of the upcoming breakout. While the price can penetrate any of the trend lines, statistical data from both sides will be the main catalysts for the pair, as on Thursday will be unveiled Q1 U.S. preliminary GDP and Japan's inflation figures for April. The world's largest economy can even show a contraction in the first quarter, while the resilience of the Japan's economy can push the cost of living above estimates, meaning we can see another movement to the south from the USD/JPY pair. Technical indicators are mixed, while pending orders do not give a clear ‘buy' or ‘sell' signal as well. Therefore, the pair will be driven by fundamentals and a re-test of 101.20 and then a move towards 100.41 can be expected this week.

Last week's the single currency was almost unchanged, posting a 0.09% decline. It can be another calm week for the Euro, however, it is likely to remain under pressure until June 5, when European policymakers are likely to pull the trigger.
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.