Sentiment in financial markets mostly recovered after fears around the coronavirus wrecked equities across the globe. The S&P 500, DAX and Nikkei 225 gained this past week, sending the pro-risk Australian Dollar to the upside on average aside from the US Dollar. Market mood ended on a cautious note Friday with a lack of a material increase in the Fed’s balance sheet.
Rising U.S. government bond yields throughout most of the past 5 days meant the markets were lessening dovish expectations from the Federal Reserve. This aided the US Dollar, which saw notable gains against some of its European peers such as the Euro and British Pound. Anti-fiat gold prices cautiously fell as sentiment-linked crude oil prices appeared to find a bottom.
China’s economy is expected to slow further amid the coronavirus outbreak and time will tell if the effects will be temporary or reveal deeper financial flaws. In the week ahead, the focus may turn to economic event risk and central bankers. Fed Chair Jerome Powell is to testify for Congress during his semiannual report while ECB President Christine Lagarde addresses the EU Parliament.
The Reserve Bank of New Zealand is expected to keep rates unchanged at 1.00 percent, but its forward guidance may spark NZD/USD volatility. Mexico’s central bank is anticipated to cut rates by 25-bp however. EUR/USD and GBP/USD may be closely watching growth reports from Germany and the United Kingdom respectively.
Fundamental Forecasts:
Euro Weekly Price Forecast: Fundamentals, Data Suggest a Terminal Decline
The Euro remains under downside pressure after a week when any short-term bullish sentiment was all but wiped out. Next week’s Euro-Zone and German GDP data may well confirm this bearish breakout.
Australian Dollar May Be Back to Virus-Watch After RBA Boost
The Australian Dollar rose after domestic interest rates were left alone even though the decision had been expected. It’s still under duress though and can’t hope for a similar RBA rescue this week.
USD/MXN Outlook: Mexican Peso Defies Fundamentals Ahead of Rate-Cut Decision
The Mexican Peso appreciated a further 1.76% against the US dollar during this past week, but a short-term correction has come into play ahead of next week’s interest rate decision.
Crude Oil May Recover on Powell Testimony, Tariff Reduction
Crude oil prices may rise if Fed Chairman Jerome Powell’s congressional testimony and the US-China tariff reduction cool slowdown fears and boost the growth-reliant commodity.
Dow Jones, DAX 30 & FTSE 100 Fundamental Forecasts
Global equity markets regained their footing last week as coronavirus fears subsided and risk appetite reemerged. Can equities continue to disregard the impact on economic activity?
Technical Forecasts:
US Dollar Price Outlook: USD Breakout Targets Resistance– DXY Levels
US Dollar marked the largest weekly advance since August with the index surging to four-month highs post-NFP. Levels that matter on the DXY weekly technical chart.
Canadian Dollar Forecast: USD/CAD, GBP/CAD, AUD/CAD, CAD/JPY
The Canadian Dollar is testing big levels against the US Dollar, British Pound and the Yen. Will CAD bears be able to continue driving in USD/CAD?
British Pound Outlook Bearish: GBP/USD, EUR/GBP, GBP/JPY, GBP/AUD
The British Pound may be at risk to the US Dollar, Euro, Japanese Yen and Australian Dollar. What’s in store for GBP/USD, EUR/GBP, GBP/JPY and GBP/AUD from a technical standpoint?
Dow Jones, Nasdaq 100, DAX Technical Forecast
Markets sprang back to life last week, tough to be a seller but chasing also not the easiest thing to do; charts and levels to watch.
Australian Dollar (AUD) Forecast: AUD/USD, AUD/JPY, AUD/NZD
The Australian Dollar attempted a recovery effort last week across a variety of pairs as risk appetite reemerged, but resistance will have to be surpassed if the recoveries are to continue.
Gold Weekly Price Forecast: XAU/USD A Pull back or A Comeback?
In late January, Gold rallied to multi- week high. However, uptrend move has paused this month. Here are the key chart signals and levels to keep an eye in the short term.
