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Next week’s Forex forecast

Sergiy Zlyvko
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All that could Yellen has said. From her words it became clear that under her management the Fed will continue to maintain Chairman Ben Bernanke policy, but clarity about the pace of quantitative easing (QE3) reduction has not appeared. Likely in the near future the market will move its attention to economic statistics releases. Although next week the performances of two representatives of the Fed will take place: Bullard and Lockhart. In its comments the market will try to find answers whether to wait the accelerating of quantitative easing measures collapse.

Despite the lack of significant news from the United States earlier the week, USDJPY pair can obtain catalysts for movements, as the data on growth of the Japanese economy will be published, as well as a meeting of the Bank of Japan’s monetary policy (Tuesday February, 18). Any hints that the regulator will keep ultrasoft policy can contribute to the resumption of growth to the area of pair’s last week highs (102.70). And in Wednesday the minutes of the last Fed meeting will be released, which might in some way to shed the light on the prospects for reducing the rate of QE3. If the market will see in it the evidence of QE3 folding acceleration likehood, the dollar will get an additional impetus for the growth.

Pair ran into resistance at the level of 1.3700 and for its breakthrough it will need additional catalysts. Besides the already mentioned American events its own data can be identified. Traditionally index of economic sentiment from the institute ZEW publication will attract the attention. To a greater degree the market may react to the data from Germany. In the case of the growth of this rate, EURUSD could try for a short time to break the district level of 1.3780, but it can only go up on the signs of dollar weakness. Also it is not to be excluded from the field of data on business activity in the industrial and service sectors, published on Thursday.

Its share of positive the British pound received and GBPUSD pair tested almost 3-year high. It is possible that it can’t easily overcome this level and in the beginning of the week we will see a correction in the district-level 1.6690 and further 1.6640. On Tuesday we should pay attention to the inflation data. At 9.30 GMT a report on the consumer price index will be published. On the background of a stabilizing economy, the faster inflation will gain momentum, the greater the likelihood that the Bank of England will start faster tightening of monetary policy. On February 19 minutes of the last meeting of the Monetary Policy Committee (MPC) will be released. Provided that among its representatives there will not be supporters of easing, the pound may resume the growth to retest 1.6745 resistance and the next target at 1.6800.

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