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Next week’s Forex forecast

Sergiy Zlyvko
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Coming week promises to be interesting. And the way in which open markets will largely depend on the preliminary results of the referendum in the Crimea. It is possible that safe-haven assets again be in demand, as the decision to join the Russia by Crimea will strengthen geopolitical tensions. In the future, planned reports can make their own adjustments.

There are virtually no certain that publication of the Fed decision on monetary policy will attract the focus. Recent data shows insufficient rapid recovery of the U.S. economy. This means that for the regulator, in general, there is no reason to accelerate the pace out of the quantitative easing program. Thus, most likely, we assume the drop in the volume by $10 billion. This is unlikely to be able to deploy the pair. In addition, during Tuesday, 18 March will be published data on building permits issued and the number of housing starts in the U.S., which will allow to make conclusions about future activity in the sector. Also a report on the consumer price index will be released. Sales of existing homes will continue on 20 March real estate market topic. Also, we do not forget about the data on business activity in the Philadelphia Fed and report on the number of initial applications for unemployment benefits. If the reports reflect a positive trend, the pair can recover to 102.30 resistance area.

Next week the most interesting, perhaps, will be the data of the business environment mood of the German institute ZEW. Indicator is projected to decline, which could negatively impact the euro because it would indicate that Germany has less force to ensure that the whole monetary unit pulling on its shoulders. Also ECB President Mario Draghi on Thursday should not be excluded from the field of view. If he confirms his attitude against the strong euro, quotes of the pair may also continue to fall. Strengthening of geopolitical risks and strong enough macroeconomic statistics from the region is able to send a pair to the support at 1.3800 and further purpose to 1.3720.

Meaningful reports on the UK economy are not planned. Therefore, the pound will remain under the influence of market sentiment. 19 March, there are data on the labor market of the country. Then minutes of the last meeting of the Monetary Policy Committee of the Bank of England will be published. It will probably bring nothing new. So pound could be affected more by unemployment data. Signs of stabilization in the employment sector can provide short-term support for the British currency. In the future, the pair will largely depend on the statistics of the United States and geopolitical risks.

As already noted, the beginning of a new week will be largely due to the outcome of the vote on a referendum in the Crimea and the way the world community will perceive. Therefore, the probability is high that the market sentiment will emerge not in favor of riskier assets.

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