The euro/U.S. dollar/U.S. dollar currency pair lost 0.34% during the last five days. The single currency is trading at 1.2288 as investors await the ECB to keep rates and quantitive easing unchanged on Thursday, April 26 at 8:30 am. Trade war fears and actual war concerns waned this week after putting downward pressure on the U.S. dollar.
This week was all about the pound; next week could be all about the euro. The pound’s rally came to an abrupt halt as economic data from the UK disappointed expectations and after the Bank of England Governor Mark Carney warned that a rate rise in May was not a forgone conclusion. The resulting rally in the euro/British pound (EUR/GBP) currency pair initially kept the EUR/USD supported.
The U.S. dollar lost against most majors even if it appreciated against safe-haven currencies on Friday. The Syrian conflict concerns faded at the end of the week and boosted the USD versus the JPY and the CHF. The release of the meeting notes from the March Federal Open Market Committee proved to be a positive for the American currency as the Fed was more hawkish than expected. Next up for the markets will be the release of retail sales data in the United States and the Bank of Canada (BoC) rate statements.
Regarding this week’s forecast, I noted that the British pound, the euro and crude looked bullish, and they behaved so. The projected range in crude offered a good reversal trade level into Wed. Also, my list of breakout symbols (Canadian dollar, crude oil, the pound and the S&P 500) produced pricing outside the prior week’s ranges. As a monthly chart follow-up, VIX futures are forming an inverted hammer, while Ten-year T-Notes formed a reversal long signal last month.
The markets started Thursday’s session once again very quietly with the major currency pairs moving very little throughout Asian and the first half of the European session before another tweet from President Donald Trump caused volatility to spike. After stoking fears yesterday that an attack on Syria was imminent, today he appeared to backtrack slightly.