US Housing Data On Tap.
Economical News
USD
Last week we saw an ongoing depreciation of the USD against all majors, with a peak of 1.3340 against the EUR on Thursday. But it was not all bad news for the Greenback as it received a boost of energy after Friday's very surprising Existing Home Sales for the month of February. The wide consensus on the Home Sales Figure was around -1.7% and the figure was released at 3.9 percent in February - the sharpest rise in three years - to 6.69M from 6.44M. Although the figure for January was revised down to 2.7 percent from 3.0 percent, the markets took the report as extremely bullish for US housing and will likely fuel further speculation that the sector has bottomed out.
This week we expect several new events from the US market, the first will be a direct continuation to Friday's existing home sales figure - New Home Sales.
New Home Sales (14:00 GMT) is expected to follow last week's boost in the housing market and the consensus figure is around 5.1% after coming in at -16.6 last month.
If the figure will indeed be released around the expectancy we should be seeing an additional appreciation of the Greenback all across the board.
As for the rest of the week, traders will be watching the release of the US Consumer confidence and US Durable Goods closely, which is also expected to come in very strong and add some more steam to the USD strengthening trend.
EUR
With no significant major data at the end of last week's trading, the EUR was carried on the back of the bullish USD sentiment and lost about 100 pips.
The ECB's Euro-zone current account surplus widened marginally to 2.7B in January from a downwardly revised 2.0B. However, oil prices were still relatively low during the month and lowered import values, which will likely rise in February and March, stabilizing the balance.
As for today the European calendar is empty, and the only important news that is expected to come from Europe this week is from the German sector in the form of the German CPI and the Unemployment rate. The EUR behavior will most likely continue to be biased mostly from US data this week as it is far more dominant.
JPY
The Bank of Japan sent a clear message to traders last week as the rates were held steady at 0.5%. The Japanese calendar is packed with major data this week such as the Retail Trade on Wednesday, Personal income and the Jobless Rate on Thursday and the Housing Starts on Friday. The big picture for the JPY appears to be the continuation of carry trades and further decline against all majors, until a further change in policy will be announced.
Technical Analysis
EUR/USD
The pair seems shy of 1.3250, which is a local support. The hourlies are slightly bullish, and the dailies are turning bearish. It looks as a preferable strategy might be looking for peaks to go short.
GBP/USD
There is a great bullish momentum on the daily charts, yet the hourlies are heavily overbought. 1.9580 appears to an established local support, and a good starting point for long positions.
USD/JPY
The pair has been going up for the last three weeks and shows no signals of a break. The daily studies are still bullish, and the hourlies are overbought, making it wise to wait for a dip before establishing further long positions.
USD/CHF
After the pair reached bottom at 1.2100 last week, it looks as if a reversal is slowly being established. The daily charts are turning bullish, supported by moderately bullish hourlies. Current target price is 1.2250.
Wild Card
CAD/CHF
The pair has been rallying down for several months now, and shows no signs of stopping. There is a pattern forming on the daily chart indicating that 1.0500 is a strong resistance. There is a double doji forming on the daily charts which gives forex traders a great opportunity for a further short entry point.
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3460 | 1.9900 | 120.58 | 1.2315 | 0.8212 | 0.6888 |
| 1.3401 | 1.9830 | 119.52 | 1.2290 | 0.8157 | 0.6869 | |
| 1.3350 | 1.9720 | 118.55 | 1.2240 | 0.8095 | 0.6836 | |
| Support | 1.3234 | 1.9546 | 117.80 | 1.2040 | 0.7981 | 0.6734 |
| 1.3201 | 1.9421 | 116.90 | 1.1975 | 0.7949 | 0.6712 | |
| 1.3157 | 1.9307 | 115.80 | 1.1841 | 0.7813 | 0.6694 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 26/03/2007 | 14:00 | USD | New Home Sales | FEB | 937K | 985K |  |
| 26/03/2007 | 14:00 | USD | New Home Sales (MoM) | FEB | -16.6% | 5.1% | |