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

Note: This section contains information in English only.
Source: Dukascopy Bank SA
Will EUR/USD be able to hold above 1.38, will Mark Carney persuade markets the BoE will hold rates unchanged for the foreseeable future, what will be Australian Q4 growth and what happened with the U.S. labour market in February? All these questions will be answered this week, as a first week of a month is full of vital fundamental data as always.

Stronger-than-expected inflation data and stable unemployment rate diminished concerns the ECB will cut its key refinancing rate or implement negative deposit rate on Thursday. Even though consumer prices are far away from the ECB's target of 2%, there is nor danger of deflation, that has been one of the key concerns for European policymakers during the last several months. On the back of positive data the shared currency gained almost 0.5% against the greenback, moving to 1.3813– the highest since December. Before the release of the data technicals were speaking in favour of pair's depreciation, as market sentiment was strongly bearish, vast majority of pending orders was placed to sell the pair, while the penetration of the ascending triangle's support line also supported the case of pair's depreciation. Nevertheless, weak data from the U.S. due to extremely cold weather and positive CPI from the 18-nation area can push the most traded currency pair first to 1.3819 and then to 1.3866 represented by a weekly R2 and R3, respectively.

Another pair worth paying attention this week is the cable. The pair is still trading in boundaries of a channel up pattern on a daily chart, and according to one of the Dukascopy Community members Ctrader: "the price next week will move inside of the ascending channel, moving closer to the upper side with the resistance 1.6928." However, keeping in mind the fact the U.K. economy has lost some of the momentum recently, and the fact traders are selling the pair in 64% of the time, suggests it will be extremely difficult to touch this level. In contrast, we can see the similar situation that happened with EUR/USD last week– fundamental data can change it all. So far this year, Carney failed to assure markets that BoE's policy will remain accommodative for some time, and this week on Thursday we can receive another portion of hawkish or unconvincing neutral comments. Moreover, there is a high possibility U.S. payrolls and unemployment rate both will surprise markets to downside, therefore the outlook for the cable is bullish.

The last but not least currency that can be highly volatile this week is the Aussie. Earlier this year the RBA signalled the easing cycle is over, hence, this week central bank's meeting is unlikely to provide any surprises. At the same time, a release of the nation's GDP on Wednesday can add some turbulence to the markets, as both annual and quarterly figures are projected to improve in the final quarter, hence, AUD/USD can move back to the apex point of the triangle pattern on a 4H chart, which is located at 0.9026, just slightly above strong psychological level at 0.90.
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