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

Note: This section contains information in English only.
Source: Dukascopy Bank SA
Canada GDP, RBA's rate decision and a slew of fundamental data from the United States and Europe pushed markets last week. All these shocks resulted in change in trends. After weeks of appreciation, the Aussie and kiwi posted either modest gains or even losses, while biggest gainer was the American Dollar that managed to advance 0.73% over the week. However, it seems that the main reason for such a performance were not strong statistics, but ECB's comments.

For weeks or even months investors were making their bets on when Mario Draghi will finally decide to pull the trigger. Inflation at a four-year low, almost record-high unemployment, strong Euro and sluggish growth, all these reports were adding more pressure on the ECB. The outcome was disappointing, as the European Central Bank decided to keep its refinancing rate at 0.25%, the marginal facility rate at 0.75%, while the deposit rate was maintained at 0%. Policymakers refrained from pulling the trigger amid conflicting signals that show the 18-nation bloc is still gradually improving. Amid growing deflation risks, European consumers and companies put off purchases in hopes for an even cheaper prices. Even Draghi's comments that policy makers are considering the U.S.-style stimulus programme and a possible introduction of the negative deposit rates were not able to limit EUR/USD appreciation. A combination of hints about the rate hike form the Fed and more stimulus from the ECB in theory, should push the most traded currency pair significantly lower and end pair's rally that began in July 2013. Nevertheless, at the moment of writing the pair bounced back from the monthly and weekly S1 at 1.3680, suggesting bears are not strong enough to penetrate this level. While traders at four different brokers, including Dukascopy, are selling the Euro versus the buck in a vast majority of all cases, the pair is still trading in boundaries of a rising wedge pattern on a daily chart.

There are not so many events that can determine future movement of the major currencies. Nonetheless, the main highlights will be the BoJ's press conference and Australian employment data. Kuroda is likely to refrain from any bold statements during the anniversary, while Australian labour market is still one the weakest points in the economy and the RBA projects the jobless rate to climb further. Therefore, there is a potential, data will surprise markets to the downside, with AUD/USD looking for a key support at 0.92, represented by a monthly pivot point and a recent low.
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Tue, 08 Apr 2014 06:14:05 GMT

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