Weekly Outlook: 2016, July 10 - July 17

Attachment 22231

Rate decision in the UK and Canada, Employment data in the US and in Australia, US Producer Prices, Inflation data, Retail sales, Consumer Sentiment. These are the main market movers on forex calendar.

1. Canadian Rate decision: Wednesday, 14:00. July’s meeting is exactly one year after the last rate cut, down from 0.75% to 0.50%.
2. US Crude Oil Inventories: Wednesday, 14:00.
3. Australian Employment data: Thursday, 1:30. Economists expect a jobs gain of 10,100, with a rise to 5.8% in the unemployment rate.
4. UK Rate decision: Thursday, 11:00. Governor Mark Carney hinted the bank will provide further stimulus measures in light of the negative economic data following the UK referendum.
5. US PPI: Thursday, 12:30. Analysts expect Producer prices will rise 0.3% this time.
6. US Unemployment Claims: Thursday, 12:30. Analysts estimate a 263,000 new claims this week.
7. US Inflation data: Friday, 12:30. Fewer economists expect the Fed will continue with its rate hike plans. Both CPI an Core CPI are expected to rise 0.2%.
8. US Retail sales: Friday, 12:30. Economists expect retail sales to rise 0.1%, while core sales are forecasted to rise 0.4%.
9. US Prelim UoM Consumer Sentiment: Friday, 14:00. Consumer sentiment is expected to reach 93.7 in July.

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Week Ahead: Relative Value Trades With Degrees of Separation From The Brexit Trade

Credit Agricole was analysiing the Brexit situation onto the forex price movement with the taking into account the pairs with the good degrees of the separation from the Brexit trade for example:

• "Our preference still is for relative value trades like long AUD/NZD."
• "We stick with our long USD/CAD call as we maintain our constructive view on USD overall especially against G10 commodity currencies."
• "The outcome of the Upper House elections in Japan may increase the chances of structural reforms and add to investors bets on further BoJ easing. At the margin, this could help weaken the JPY."

Let's describe the situation with the technical points of view.

AUD/NZD - Next Week Forecast. Credit Agricole estimated for AUD/NZD to be in long situation but as we see from the daily chart - the p[rice is located below Ichimoku cloud in the bearish area of the chart by 1.0339 support level to be tested for the bearish breakdown to be continuing. The nearest resistance level at 1.0548 is located on the border with the secondary rally to be started and with 1.0774 resistance level as a bullish reversal target.

Attachment 22233

The most likely scenarios for the daily price are the following: the bearish breakdown will be continuing or the ranging within the bearish will be started.

USD/CAD - Next Week Forecast. Credit Agricole forecasted for the price to be in long for the coming week. As we see form the chart below - the price is on bullish market condition by Ichimoku cloud to be broken to above with 1.3055 resistance to be tested for the bullish trend to be continuing. Chinkou Span line is located near and below the price to be ready for the possible bullish breakout, and Trend Strength indicator together with Absolute Strength indicator are estimating the bullish trend to be continuing. Alternative, the breaking 1.2831 support level to below will lead to the bearish reversal to be started up to 1.2654 bearish target in this case for example.

Attachment 22234

Most likely scenarios for the daily price are the following: bullish breakout will be continuing or the ranging within the bullish will be started.

USD/JPY - Next Week Forecast. Credit Agricole indicated the local uptrend as the bear market rally for the price to be started in the coming week - the daily price is located below Ichimoku cloud in the primary bearish area of the chart with the ranging within the narrow support/resistance levels. So, the secondary rally may be started by 103.39 resistance level to be broken by the price to above and with 107.86 possible bullish reversal target, alternative - if the price breaks 100.19 support ot below on daily close bar so the ranging bearish market condition will be continuing with 98.93 bearish target to re-enter.

Attachment 22235

Most likely scenario for the daily price is the following: bearish ranging within the levels.

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