Is USD Consolidation Ready to End? Charts for the Week
- USDOLLAR Index breaches topside of recent range 11770/810.
- EURUSD triangle, GBPUSD wedge, USDCAD triangle in focus.
- See the DailyFX Economic Calendar for the week of February 22-27, 2015.
Despite all the hoopla surrounding Greece's late-week loan extension agreement, the reaction seen in the Euro complex wasn't all that inspiring. In recently downtrodden pairs like EURGBP and EURUSD, for example, key technical resistance levels were never breached leaving more downside open as a possibility.
Ultimately, price will represent the market's opinion on the Greek resolution, not the commentary of pundits or journalists condemned with beating a dead horse over the next four months. Noise aside, it has to be disconcerting for Euro bulls that markets are focused on Greece rather than signs to be optimistic thanks to recent incoming data.
If we step away from Greece, the most important events of the week are arguably coming out of North America. Consumption, inflation, and general growth data are due from the United States and (to a lesser degree) Canada, buttressed by central bank commentary from the Federal Reserve and Bank of Canada alike.
Fed Chair Janet Yellen's semi-annual Congressional appearance that is the Humphrey-Hawkins testimony will commence on Tuesday (lasting two days), offering traders a new perspective from the Fed in the wake of the strong January jobs report, which saw payrolls expand by over 1 million jobs over the past three-months alone (the January FOMC minutes release on Wednesday was for the meeting before the employment figures were reported).
Meanwhile, BoC Governor Stephen Poloz's speech on Tuesday should garner equal merit in context of the March 4 BoC policy meeting. Recent data has been quite poor - the Canadian Citi Economic Surprise Index has dropped to -48.4, the lowest level since mid-March 2014 - and another week of disappointing data and poor Canadian bank earnings could prompt further action after the surprise 25-bps cut in January.
See the above video for technical considerations in EURUSD, GBPUSD, AUDUSD, USDCAD, and USDOLLAR.
--- Written by Christopher Vecchio, Currency Strategist
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