Data on tap - US retail sales.
Economical News
USD
On Friday, the Greenback continued to depreciate, and could not be saved even by positive news. The US PPI for the month of March came out stronger the expected at 1.0%., and the US Trade Balance, which was expected to come at -60.2B had reduced a bit to -58.4B. Both figures were not strong enough to stop the ongoing rally, and the EUR/USD closed the trading week at 1.3530.
Several major events are expected to be released today, starting with US Retail Sales at 13:30 GMT. There are high expectations from the Retail Sales today as the M/M figure is expected to rise to 0.4% from 0.1%, and the core figure is expected to bounce away from the negative territory of last month's -0.1% to 0.8%. The next major figure will be Empire State Business Conditions Index (13:30 GMT) which measures the general business conditions of manufacturers in New York State. The figure is expected to come in at around 7.5 after coming in at 1.9 on last month.
It is a very important week for the USD as it looks like traders are expecting the US Market to get strong figures from most of the economic data which is expected to be released. If the figures will be strong, and the negative USD rally will not stop, than further monetary measures will be expected.
EUR
Last week's most important event was no doubt the ECB monthly meeting and the rate decision. “Vigilance" was not used by Trichet and confirmed that there will be no hike in May. Trichet remains hawkish as he described "monetary policy continued to be "on the accommodative side" with key rates "moderate".
The most important news release expected from the Euro-Zone today is the GBP PPI for the month of March (9:30 GMT). The PPI Input is expected to decrease a bit to 0.9%, as the PPI Output is expected to come 0.3.
The Euro-Zone CPI revision is expected to be released today at around 0.6% after a previous figure of 0.3%.
The European market is going through a very strong period as we can see record highs all across the board. The EUR/USD is floating on a 2 year high; the EUR/JPY didn't seem to stop after breaking the all time high and is now approaching 162.00. The GBP appears to be heading to 2.0 with great confidence. If we see the first signals of weak figures coming in from Europe combined with strong US figures, we might see the change begin this week, although as a whole the positive tail wind appears to be stronger than ever for the European Markets.
JPY
After last week's BOJ decision to keep rates unchanged and an announcement that the Japanese economy is “moderately expanding”, the monetary policy seems to be quite neutral. That caused the JPY to be traded relatively quietly until Friday's session which was very violent due to G7 speculations. It has been discussed whether the JPY weakness will be mentioned in the G7 meeting, and a resolution of that matter will determine whether massive carry trades will resume and a weaker JPY will be the name of the game once again. Massive volatility might be expected from the JPY this week as the outcome of the meeting might spur a move of 200-300 pip.
Technical Analysis
EUR/USD
A very clear pattern is forming on the 4 hour chart, as the A wave is establishing and expected to test the 1.3537, where the B (correction) and C wave will probably take this pair to 1.3516 (Fibonacci).
The RSI is at 77 and the slow stochastic is crossing the 80 level creating a bearish picture for the moment.
GBP/USD
The daily charts are mildly bullish; however the hourlies are indicating an upcoming bearish trend. A rising wedge is forming on the 4 hour chart supported by a Doji which is strengthening the notion that a bearish trend is initiating.
USD/JPY
The 1 Hour chart is implying that an upcoming bullish trend is expected due to a bullish flag that is establishing but not yet completed.
A bullish channel with 116.24 - 119.67 barriers is observed and a breach beyond one of them will take this pair to a correlated direction.
USD/CHF
Hourly indicators are sailing in neutral territory, however a bullish flag is establishing on the 4 Hour chart which can boost the pair up and even break the R1 which is located at 1.2208 and might spur an additional testing of the R2 level of 1.2260.
Wild Card
CAD/CHF
There is a very distinct channel forming on the 4 Hours chart, as the pair is now floating at the bottom section. This indicates that a bullish correction is bound to occur which gives forex traders a great opportunity to jump in.
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 | 1.3644 | 2.0000 | 121.26 | 1.2268 | 0.8444 | 0.6865 |
| 1.3600 | 1.9965 | 120.59 | 1.2207 | 0.8400 | 0.6842 | |
| 1.3577 | 1.9900 | 119.70 | 1.2167 | 0.8355 | 0.6827 | |
| Support | 1.3517 | 1.9828 | 119.17 | 1.2122 | 0.8239 | 0.6800 |
| 1.3459 | 1.9768 | 118.42 | 1.2085 | 0.8171 | 0.6761 | |
| 1.3406 | 1.9604 | 117.70 | 1.2030 | 0.8079 | 0.6721 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 04/16/07 | 8:30 | EUR | PPI Input | m/m | 1.3% | 0.9% |  |
| 04/16/07 | 12:30 | USD | Retail Sales | m/m | 0.1% | 0.4% | |
| 04/16/07 | 12:30 | USD | Core Retail Sales | m/m | -0.1% | 0.8% | |
| 04/16/07 | 12:30 | USD | Empire State Business Conditions Index | m/m | 1.9 | 7.5 | |