Forex market trends were driven mostly by risk sentiment recently, but the focus could shift back to fundamentals this time.
ICYMI, here’s a quick recap of the factors that pushed currency pairs around last week.
Uncle Sam might steal the show with top-tier inflation and jobs figures due, and here’s what analysts expect:
Major Economic Events:
BOE officials’ speeches (starting Mar. 28, 11:00 am GMT) – Governor Bailey has a speech lined up early in the week, and he’s set to talk about macroeconomics and financial stability.
Next up, we have MPC member Broadbent due to speak during the 25th anniversary of the Monetary Policy Committee mid-week.
Any remarks on the central bank’s policy plans, given how U.K. price pressures have been skyrocketing, might have a big impact on longer-term term GBP trends, so watch out!
OPEC-JMMC meetings (starting Mar. 31) – Even with crude oil prices still trading dangerously close to record highs, the oil cartel has refused to budge on its official output deal.
Will they be prompted to make adjustments this time?
Even though some members would probably push for higher production in order to keep a lid on oil prices, it seems highly unlikely that the cartel would agree to make actual changes. They might even say that the recent moves are just temporary and that some member nations are already struggling to meet targets.
U.S. core PCE price index (Mar. 31, 12:30 pm GMT) – Ahh, the Fed’s preferred inflation measure. Even though recent CPI figures have been comin’ in hot, number crunchers estimate that the February core PCE price index might dip from 0.5% to 0.4% in February.
Still, any upside surprise could fuel expectations of yet another Fed interest rate increase in their next meeting. After all, their dot plot forecast signaled more hikes throughout the year, and hardcore dollar bulls are hoping for back-to-back rate increases midyear.
U.S. non-farm payrolls report (Apr. 1, 12:30 pm GMT) – Last but certainly not least is the NFP report up for release on Friday. Analysts are expecting to see a slower 485K gain in hiring compared to the earlier 678K increase.
Take note, though, that the actual figures beat estimates in the past couple of releases and that previous readings have seen upgrades since June last year.
Don’t forget to keep tabs on leading jobs indicators (JOLTS job openings, ADP non-farm employment change, and Challenger job cuts) due earlier in the week.
Forex Setup of the Week: NZD/USD
NZD/USD 4-hour Forex Chart
This pair has been in a steady uptrend since the middle of March, and it looks like another opportunity to join the climb is coming up.
NZD/USD is testing the channel resistance and might be in for a pullback to the support levels marked by the Fibonacci retracement tool.
Each of the Fibs line up with other inflection points, so buyers might be hanging out at any of these!
The 38.2% level is around the mid-channel area of interest and .6900 handle, which might be enough to hold as support in a shallow pullback. The 50% level is in line with the 100 SMA dynamic support while the 61.8% Fib is right at the channel bottom.
Stochastic is still heading south for now, so the correction could keep going until the oscillator reaches the oversold region and turns higher.
The 100 SMA is safely above the 200 SMA, though, so there’s a good chance the uptrend could carry on. Just be sure to keep tabs on U.S. economic data if you’re trading this one!
