Market Weekly Analysis – April 4th-8th, 2017

Previous Week Overview

The previous week was quite important not only because we have seen the US GDP expand to 2.1%, better than excepted 2.0% and better than previous month (YoY) 1.9, but also we have seen the historical divorce of the UK-EU union.

In addition we have seen some important events on the economic calendar as the Japanese National consumer price index which came to be 0.3% better than expected of 0.2% and less than the previous month 0.4%. Also the EU CPI came to be 1.5% less than excepted 1.8% and even less than the previous month which was 2.0%. Canadian GDP was 2.3% VS 1.9% excepted and 2.1% for the last month.

Next Week Outlook

On the FXEmpire.com economic calendar we can see couple of major events next week. We have on Tuesday the Aussie rate decision with no expectations of a rate hike, any raise will lead to over appreciated AUD. Also Mario Draghi will speaks at the ECB premises in Frankfurt on Tuesday on the current situation. We are going to wait for the start of the month to see major events including the US employment data on Friday. The previous month had a huge raise on the non-farm payrolls numbers while the unemployment rate increased 0.1%. This week. it is expected to remain stable unemployment rate since it reached its normal levels, and 180K increase in the non farm payrolls.

Recommended trades of the week

FTSE – As the UK prime minister triggered the article 50 and send the EU official information to leave the EU last week, the markets started to react. FTSE futures have covered the BREXIT up gaps [discussed in the article: How to Solve The BREXIT Puzzle], and now forming a perfect rising wedge to start falling as a result of the negative consequences of BREEXIT. We predict the retracement on the FTSE futures to be at 23.6% level at 6970.

EUR/NZD – As we have seen the foreseeable breakout of the pair finally occurred last month, the pair tested the first level of retracement 23.6% at the price 1.5470. The stochastic is forming a divergence with the price chart giving us a signal for another breakout towards the 38.2 % level at 1.606, with a little probability of continuing the consolidation case for the next week.

NZD/CAD – The pair is continuing to form a rising wedge, which might last until the end of the year. The pair is moving smoothly with technical indicators. The rising stochastic trend is moving a long with the pair trend. The pair might retrace a title bit before it continues to go higher.

Good Luck