Weekly Outlook: 2014, April 20 - 27

Gold forecast for the week of April 21, 2014, Technical Analysis

Gold markets fell during the bulk of the week, closing below the $1300 level. However, the market has a bit of support underneath this level, so it is very possible that we get a little bit of a bounce. Even if we don’t, we think that there are plenty of supportive areas below to keep this market somewhat elevated. In the end though, it is possible that we simply continue the consolidation all the way down to the $1200 level. Two weeks before we formed a hammer, and as a result we cannot sell until we are below the level.

http://youtu.be/ZD6fTr10Z2w

Attachment 6666

USD/JPY forecast for the week of April 21, 2014, Technical Analysis

The USD/JPY pair rose during the course of the week, continuing the consolidation that we’ve seen for some time now. Because of this, we feel that this market should continue to grind away sideways but we are heading towards a significant uptrend line that could get the market to go higher quickly. We believe that the 103 level is going to be resistance though, but if we can get above there we should go to the 105 level. Of all the 105 level, we believe that this market then heads to the 110 level.

http://youtu.be/kVDbr2xxFGc

Attachment 6667

USD/CAD forecast for the week of April 21, 2014, Technical Analysis

The USD/CAD pair rose during the course of the week, breaking the top of the hammer that we had form the previous week. This is a classic positive sign as far as technical analysis is concerned, and we believe that this market is going to reach towards the top of the recent consolidation area which we see as the 1.13 level. Nonetheless, we think that it could be a bit of a choppy move, which of course is very common for the USD/CAD pair. The two economies are completely interconnected so it makes sense that the market will go back and forth and micro-movements most the time, with the occasional impulsive movement giving the actual profits.

We feel that selling is impossible until we get down below the bottom of the hammer from last week, which would signify that we could get down to the 1.07 handle immediately, and then perhaps look for real supports or closer to the 1.06 handle. We doubt that’s going to happen though, because quite frankly the Canadian dollar has been beat up even while the oil markets have gotten a bit stronger over time. With that, we are looking to start buying this market now, and will continue to buy as we serve to grind higher, probably heading to the 1.15 level given enough time. We do like the US dollar in general, because after all the US dollar index is starting to look very positive, and on top of that the Federal Reserve is much closer to tightening monetary policy than the Bank of Canada is. After all, the Canadians have stated recently that the market shouldn’t be expecting any type of monetary tightening anytime soon. They were pretty explicit in that, so it appears the Canadians will continue to keep a very loose monetary policy, which of course will continue to affect the value of the Canadian dollar in a negative way. It doesn’t mean they were going to break out right away, but we most certainly think that it’s coming fairly soon.

http://youtu.be/nMMoTKwFyJM

Attachment 6668

NZD/USD forecast for the week of April 21, 2014, Technical Analysis

The NZD/USD pair fell during the balance of the week, but has still not found the supportive level at the 0.85 level that we are looking for. Because of this, we are going to stay on the sidelines for the time being, but would love to see some type a supportive candle, perhaps a hammer near the 0.85 handle as we would like to see that level that was once a massive resistance area become supportive. That would be classic as far as technical analysis is concerned, and therefore be an easy trade to take.

http://youtu.be/aTEUNclZwrQ

Attachment 6669

GBP/USD forecast for the week of April 21, 2014, Technical Analysis

The GBP/USD pair initially fell early in the week, but as you can see bounced enough to form a positive candle. With that, the market looks like it’s supported and we are going to continue to go higher. If we break the top of the weekly candle, we feel that this market could go to the 1.07 level, and possibly even higher given enough time. We have no interest in selling, and we believe that the 1.65 level is the “floor” in this market at the moment. Selling can’t be done until we get below the 1.64 level, something that isn’t going to happen right away.

http://youtu.be/jHApz1-P03k

Attachment 6670

EUR/USD forecast for the week of April 21, 2014, Technical Analysis

The EUR/USD pair had a negative week over the last five sessions, but did find the 1.38 level as supportive. Because of this, it feels of the market is going to possibly drop from here, but not very much. With that, we feel that the market should continue to go higher over the longer term though, as it certainly has an uptrend feel to it. Nonetheless, is going to be very difficult to the average trader to hang onto a trade. We feel that this market is going to be difficult as it is so choppy.

http://youtu.be/RKvmQMrDD8Q

Attachment 6671

Forex - Weekly outlook: April 21 - 25

The dollar ended the week higher against the yen on Friday as market sentiment was boosted by easing tensions over Ukraine, while upbeat U.S. economic reports also supported the dollar.

USD/JPY touched highs of 102.57 on Friday, before ending the session at 102.40, rising 0.49% for the week. Trade volumes remained thin on Friday, with most markets closed for the Easter weekend, although markets in Tokyo were open.

Concerns over the crisis in eastern Ukraine eased on Thursday after Russia, Ukraine, the U.S. and the European Union said an agreement on steps to "de-escalate" the crisis had been reached.

The dollar also received a boost after upbeat U.S. data on manufacturing and employment on Thursday pointed to underlying strength in the economy.

The Labor Department reported the number of people filing for unemployment benefits edged up to 304,000, below analysts’ forecasts and not far from the six-and-a-half year low of 300,000 touched the previous week.

GBP/USD edged up 0.06% to 1.6798 at Friday’s close, and ended the week 0.45% higher. The pair rose to highs of 1.6840 on Thursday, the strongest since November 18 2009. Sterling strengthened broadly after data earlier in the week showed that the U.K. unemployment rate fell to a five year low of 6.9% in the three months to February.

The upbeat data bolstered expectations that the Bank of England could raise interest rates as soon as the first quarter of 2015.

The euro was little changed against the dollar on Friday, with EUR/USD settling at 1.3810.

The euro’s gains were held in check after recent comments by European Central Bank officials flagged concerns over the impact of the strong currency on the inflation outlook.

On Thursday, ECB Executive Board member Yves Mersch said that if foreign exchange developments with an impact on inflation continue it would trigger a reaction by the central bank.

Elsewhere, the New Zealand dollar posted its largest weekly decline against the greenback since January, with NZD/USD ending the week down 1.24% to 0.8576, ahead of the Reserve Bank’s rate review on Thursday.

In the week ahead, market watchers will be focusing on U.S. data on housing and manufacturing activity, while manufacturing data from China will also be closely watched. The euro zone is to release data on private sector activity, while the U.K. is to produce a report on retail sales.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, April 21

• Markets in Australia, New Zealand, the U.K. and the euro zone are to remain closed for Easter Monday. Meanwhile, Japan is to release data on the trade balance.

Tuesday, April 22

• Australia is to publish an index of leading economic indicators.
• Canada is to produce data on wholesale sales.
• The U.S. is to release private sector data on existing home sales.

Wednesday, April 23

• Australia is to publish data on consumer price inflation, which accounts for the majority of overall inflation.
• China is to release the preliminary estimate of the HSBC manufacturing index, a leading indicator of economic health.
• The euro zone is to release preliminary data on manufacturing and service sector activity, a leading indicator of economic health. Germany and France are also to release individual reports.
• The U.K. is to release data on public sector borrowing, while the BoE is to publish the minutes of its April meeting. The nation is also to publish private sector data on industrial order expectations.
• Canada is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• The U.S. is to publish reports on new home sales and manufacturing activity.

Thursday, April 24

• The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
• In the euro zone, Germany is to release the Ifo report on business climate.
• ECB President Mario Draghi is to speak at an event in Amsterdam; his comments will be closely watched.
• The U.S. is to publish data on durable goods orders and the weekly report on initial jobless claims.

Friday, April 25

• Markets in Australia and New Zealand will be closed for the Anzac Day holiday.
• Japan is to release data on consumer inflation.
• The U.K. is to produce data on retail sales.
• The U.S. is to round up the week with revised data on consumer sentiment.

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