Weekly Outlook: 2014, May 18 - 25

Forex Weekly Outlook May 19-23

Rate decision in Japan, inflation data in the UK and Canada, FOMC Meeting Minutes, Unemployment Claims, German Ifo Business Climate and US housing data are the main events on our list. Here is an outlook on the main market-movers for this week.

Last week, major US figures came out above expectations; Annual inflation reached 2%, as expected and the monthly CPI edged up to 0.3%. Meanwhile, the annual core inflation beat forecasts with a 1.8% reading. Furthermore, the sharp drop in the number of unemployment claims reaching a 7-year low of 297,000, reaffirms the strength of the US labor market. These positive signs support the Fed’s tapering plan, indicating the US economy is getting stronger and does no longer need QE. Will the US housing data also change for the better this week.

Let’s start,

1. UK inflation data: Tuesday, 8:30. UK inflation remained below the BOE’s 2.0% inflation target in March, reaching 1.6%, the lowest reading since October 2009. This reading was preceded by 1.7% in February. This was the sixth consecutive month of low inflation narrowing the gap between wage growth and the rise in prices contributing to business stability. UK inflation is expected to increase to 1.7%.
2. Japan rate decision: Wednesday. Governor Haruhiko Kuroda maintained the BOJ’s monetary policy in April expressing confidence that the economy is advancing according to plan. However, many analysts believe the BOJ will have to ease policy in the near future to prevent a deflation trend. Kuroda told Prime Minister Shinzo Abe that he will adjust policy without hesitation in case the 2.0% inflation target may be jeopardized. No change is expected this time.
3. US FOMC Meeting Minutes: Wednesday, 18:00. FOMC minutes released in April indicate the Fed’s intention of maintaining loose monetary policy for years to come. The FOMC welcomed the pickup in GDP growth registered after the weak first quarter affected by the cold weather. The members supported a low fed funds rate for as lonf as inflation remains below the 2% target. Tapering should continue and changes to guidance are possible. The FOMC expects that the economy will improve.
4. UK GDP data: Thursday, 8:30. According to the NIESR estimates GDP edged up 1.0% in the second quarter after posting a 0.8% expansion rate in the first three months of 2014. The growth levels nearly equal the pre-financial crisis peak. NIERS forecasts a 2.9% growth rate in 2014. However, despite the pick-up, income per capita will need another three years to catch up with GDP expansion. GDP growth in the second quarter is expected to reach 0.8%.
5. US Unemployment Claims: Thursday, 12:30.Initial claims for U.S. unemployment benefits hit a seven-year low of 297,000 claims last week, confirming the strong recovery in the US economy. Claims fell 24,000 from the preceding week, indicating stronger economic growth in the second quarter. Stronger labor market and rising inflation pressures give green light to the Fed’s ongoing tapering move. Jobless claims are expected to increase to 312,000.
6. US Existing Home Sales: Thursday, 12:30. Second hand homes sales declined to their lowest level in more than 1-1/2 years in March, reaching an annual rate of 4.59 million units. However, sales were stronger than the 4.57 million forecasted by analysts, indicating that the negative trend in the housing market may be over. Supply increased as well as the number of first time buyers. Existing Home Sales are expected to rise to 4.71 million.
7. German Ifo Business Climate: Friday, 8:00. German business climate index rose to 111.2 in March, following a revised 110.7 in February. The reading was stronger than the 110.5 points forecasted by analysts. The Ukraine crisis took less attention in the survey despite Barack Obama’s warnings of additional sanctions against Russia in case it fails to reach an agreement with Ukraine. German business climate is predicted to reach 111.
8. US New Home Sales: Friday, 14:00. Sales of new U.S. homes plunged to their lowest level in eight months reaching a seasonally adjusted annual rate of 384,000 units in March. It was the second consecutive monthly drop indicating a slowdown in sales. Economists expected sales to increase to 455,000 saying the unexpected drop may be related to cold weather conditions. However, the weak demand increased the months’ supply of houses on the market to 6.0, the highest level since October 2011, from 5.0 months in February. New home sales are expected to reach 426,000.

US Dollar Rally Will Stall Without a Spark

Fundamental Forecast for Dollar: Neutral

• Though US Treasury yields were in retreat this past week, the move does not likely reflect fading Fed expectations
• There is limited impetus from the docket for a big ‘risk’ breakout this week, but a surge in sentiment doesn’t require data

Attachment 7081

The US Dollar managed to turn a close call test of 14-month lows into an impressive rebound over the past two weeks. Yet, without a strong foundation for bulls to drive from, a ‘rebound’ may be all the greenback is able to muster. There are two fundamental themes on which the currency will rely to decide its fate: the bearings for global risk trends and the market’s rate expectations. Either could turn the tides for the benchmark and global capital markets with motivation. However, the potential and probability between the two remain uneven.

Relative monetary policy is currently the most productive fundamental driver behind the dollar – for better or worse. Over the past weeks, we have seen a FOMC rate decision, a number of Fed speeches and round of data that have reinforced the time frame for the central bank’s first rate hike (mid-2015). Despite this, Treasury yields have stumbled. The rate on the favorite 10-year Treasury note dropped to a near seven-month low while the 2-year yield – more sensitive to the beginning of the rate hike regime – has similarly retreated, just not with the same degree of attrition.

Forecasts in Fed Fund futures (derivatives used to gauge central bank moves out into the future) are similarly skeptical of the projected path for rate hikes. Looking out the curve, the first hike is not fully priced in until October of 2015. Yet, as with anything in the FX market, the dollar’s situation is relative. While a late-2015 hike is a weaker than guidance, it would still mark a more hawkish bearing that the Euro (ECB pursuing stimulus), the Yen (BoJ not yet winding down its open-ended QE) and many other counterparts. From this comparative evaluation, we find that European and Asian yields were also in retreat.

Moving forward, the market will intensify its speculation for the Fed’s policy path. There are plenty of scheduled Fed speeches to gauge timing, but data is particularly light in this regards. It is unlikely that the group take a hard turn from their march towards the end of QE3 and the eventual first move to tighten. That means, the market is more likely to feel the tug of a mid-2015 time frame teasing yields and the dollar. More heat may come indirectly from more significant policy swings from the currency’s major counterparts. The ECB push towards June stimulus is a key source of strength for the greenback via EURUSD, so the Eurozone flash PMI readings will carry weight. So too will the UK CPI figures with the pound enjoying a significant rate forecast premium over its US counterpart.

While Fed forecasts will remain an engaged fundamental subject for the dollar, it is important to keep tabs on the other primary driver which may be dormant now but could quickly turn explosive with little warning: risk trends. Complacency continues to grow with exposure to ‘high risk / high yield’ assets extreme, leverage use at records and hedge exposure virtually nonexistent. These are the ingredients of a catastrophe for the financial markets, but masses can remain blissfully ignorant so long as a pullback doesn’t start to incur amplified losses. Yet, with volatility indicators already at natural lows (risk premium fully absorbed), benchmarks like the S&P 500 struggling for meaningful gains, economic activity slowing and interest rates gradually trending higher; it is only a matter of time before this volcano erupts.

Bullish USD/JPY Outlook to Deteriorate Further on Less-Dovish BoJ

Fundamental Forecast for Japanese Yen: Neutral

• Japan GDP Trumps Estimates, USD/JPY Targets 99.44 if Support Broken
• Price & Time: Watching & Waiting in the Yen

Attachment 7086

The USD/JPY extended the decline from earlier this month, with the pair slipping to a fresh low of 101.30, and the Bank of Japan (BoJ) interest rate decision may continue to undermine the bullish sentiment surrounding the dollar-yen should we see a more material shift in the policy outlook.

In light of the marked pickup in Japan’s 1Q GDP report, the BoJ may sounds increasingly upbeat on the economy, and the central bank may continue to scale back its willingness to further expand its asset-purchase program as Governor Haruhiko Kuroda remains confident in achieve the 2% target for inflation. With that said, we may see a growing number of BoJ officials soften their dovish tone for monetary policy, and the USD/JPY may weaken further in the week ahead should the board show a greater disposition to halt the easing cycle sooner rather than later.

At the same time, we are likely to get more of the same with the Federal Open Market Committee (FOMC) Minutes as Chair Janet Yellen remains reluctant to move away from the zero-interest rate policy (ZIRP), and a further deviation in the policy outlook may encourage a more bearish outlook for the USD/JPY as it threatens the bullish trend carried over from the previous year.

In turn, the fundamental developments coming out next week may encourage a more bearish outlook for the USD/JPY, and we may see a more meaningful run at the 101.00 handle as the BoJ turns increasingly upbeat towards the Japanese economy.

Gold at Risk for Major Break Next Week- FOMC Policy Outlook in Focus

Fundamental Forecast for Gold: Neutral

• USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
• Gold Oscillates Around 200 Day Average

Attachment 7087

Gold prices are marginally higher this week with the precious metal inching up 0.18% to trade at $1291 ahead of the New York close on Friday. Bullion has held a tight range for some time now and while our immediate bias remains neutral, a clear setup presents itself as we head into next week with the technical outlook warning of a possible near-term break in gold prices.

Broader market sentiment remains uneasy heading into the weekend with all three major stock indices closing markedly lower on the week as the yield on the US 10Yr dropped to its lowest levels since October 2013 at 2.47%. The key data print came on Thursday with the US consumer price index showing an uptick in both m/m and y/y core CPI. The data could begin to undermine the Fed’s dovish tone and with the labor market recovery seemingly on proper footing, the inflation outlook is likely to remain central focus for the central bank moving forward.

Looking ahead to next week, the release of the minutes from the April FOMC policy meeting will be central focus as investors continue to search for clues as to the central bank’s outlook on interest rates. Highlighting the economic docket next week will be an update on the housing market with existing homes sales on Thursday and New home sales on Friday. Data on Friday showed housing starts jumped 13.2% m/m in April, far surpassing expectations for a gain of just 3.6% m/m and strong data next week could further weigh on gold as prospects for policy normalization from the fed begin to take root. Existing home sales are expected to rise by 2.1% m/m after a 0.2% contraction in March with consensus estimates calling for new home sales to jump by 10.6% m/m, rebounding from a contraction of more than 14% the previous month.

From a technical standpoint, gold has continued to trade into the apex of a multi-week consolidation pattern off the April highs and a break-out ahead of the May close is in focus. A break below 1260/70 is needed to put the broader bearish trend back into play targeting $1216/24 and the 2013 lows at $1178. Interim resistance and our near-term bearish invalidation level stands at $1307/10 with a move surpassing $1327/34 shifting our broader focus back to the long-side of gold. Bottom line: look for a decisive break of this pattern next week with a move surpassing the May opening range to offer further clarity on our medium-term directional bias. The broader outlook remains weighted to the downside sub $1334.

British Pound at Risk Ahead of Key Data, Trades at Critical Support

Fundamental Forecast for Pound: Bearish

• British Pound falters as Bank of England shows no rush to raise rates
• Cable nears critical price levels, next move is key

Attachment 7092

The British Pound pulled back further from multi-year highs as a drop in UK yields and a broader US Dollar reversal produced the second-consecutive week of GBPUSD declines. Key economic data may need to impress to spark a larger GBP bounce.

A highly-anticipated Bank of England Inflation Report showed officials are likely to keep interest rates unchanged for some time to come. The disappointment sent UK yields considerably lower, and the interest rate-sensitive GBP followed in kind.

Those same interest rate and FX traders will watch upcoming UK Consumer Price Index inflation figures, Retail Sales results, and Q1 GDP growth numbers for greater clarity on the future of domestic interest rates.

Risks to the British Pound seem weighed to the downside as the BoE dashed hopes that strong growth figures would be enough to force the bank into action on interest rates. And indeed short-term government bond yields matched their largest single-week drop on the year. Given strong correlations between interest rates and the GBP, any further deterioration could sink the Sterling for the third-consecutive week.

Consensus forecasts for upcoming inflation, consumption, and growth figures are relatively tame; the recent tumble in yields suggest we need to see strongly positive surprises to force a material Sterling bounce. From a technical perspective it’s important to note that the GBPUSD trades near pivotal support, and its next moves could guide price action for some time to come.

It’s shaping up to be an important week for the previously high-flying GBP. And though it remains relatively close to multi-year peaks, continued failure at these levels suggests that the uptrend may be over.

Aussie Dollar at Risk as US Data, FOMC Minutes Hurt Risk Trends

Fundamental Forecast for Australian Dollar: Bearish

• Lull in Australian Economic News-Flow Puts Spotlight on External Catalysts
• Upbeat US Data, Hawkish FOMC Minutes to Hurt Aussie Amid Risk Aversion

Attachment 7093

Another quiet week on the Australian economic data front keeps the spotlight on external factors, with the evolving outlook for Federal Reserve monetary policy in focus. A central theme driving markets since the beginning of the year has been the disparity between soft US news-flow and the Fed’s commitment to continuing to “taper” its QE effort. That encouraged investors to suspect that the central bank may pause or abandon the process of reducing the size of its monthly asset purchases.

For its part, the Fed has steadfastly reduced the pace of balance sheet expansion by $10 billion/month since the cutback process was initiated in December. Fed Chair Janet Yellen and her colleagues on the rate-setting FOMC committee argued that the slowdown in US economic performance in the first quarter was transitory and didn’t warrant a change of course. The markets were duly skeptical of this position absent hard evidence to support it. This may be changing at last.

A Citigroup index tracking how US economic releases stack up relative to expectations found a bottom in early April and started to reverse upward, finishing last week at the highest level in three months. That suggests analysts are underestimating the resilience of US recovery, opening the door for upside surprises. In the week ahead, that means measures of April’s new and existing home sales may yield rosier results than consensus forecasts envision.

The item of greatest significance is likely to be the release of minutes from the Fed’s April monetary policy meeting. Traders will be keen to gauge policymakers’ confidence in QE reduction continuity in the early weeks of what is increasingly looking like a re-acceleration of US growth. Recognition of the transition in its infancy would go a long way toward brandishing the Fed’s ability to read the business cycle, bolstering the central bank’s credibility and scattering doubts about the likelihood of an end to QE by autumn.

Unencumbered speculation about the culmination of stimulus expansion and the commencement of interest rate hikes thereafter sparked liquidation across the spectrum of risky assets last year, when then-Chairman Ben Bernanke first introduced the concept of “tapering”. As one of the higher yielders in the G10 FX space, the Australian Dollar is highly sensitive to broad-based risk aversion, meaning another mass exodus from sentiment-geared assets stands to punish currency.

Nikkei forecast for the week of May 19, 2014, Technical Analysis

The Nikkei tried to rally during the week, but as you can see found a lot of resistance at the 14,500 level. The area is a large, round, psychologically significant number that the markets will try to respect, but eventually the market will need to break above the top of the shooting star in order to go further to the upside, the move we expect to see. The breaking below of the 14,000 level will send this market falling significantly in the meantime. The upside is what we prefer, and think is most likely to happen.

http://youtu.be/mXZoeISBoFs


Attachment 7099

DAX forecast for the week of May 19, 2014, Technical Analysis

The DAX broke to the upside during the week, but found the €9800 level to be a bit too resistive to overcome. With that, we pulled back and formed a massive shooting star, but the €9600 level is in and of itself a significant support level. Because of this, we feel that ultimately the market will follow the trend that it’s been in for some time, sending this market back above the €9800 level. With that in mind, we have no interest in selling this market and can only follow the longer-term trend.

http://youtu.be/-AZri1ztKRg


Attachment 7101

NASDAQ forecast for the week of May 19, 2014, Technical Analysis

The NASDAQ when back and forth during the sessions of the last week, and as a result it appears that the market really is a ready to go anywhere quite yet. The 4000 level has offered significant support previously, and as a result we feel that the market will ultimately go higher, as we are simply sitting on top of a significant amount of support. However, we also recognize that there is a nice potential for a large uptrend line that we are touching now. On a break above the highs from the last couple of weeks, essentially the 4200 level, we believe that the market goes much higher.

http://youtu.be/EnvYJFEfCa8


Attachment 7102

S&P 500 forecast for the week of May 19, 2014, Technical Analysis

The previous week for the S&P 500 was back and forth and as a result we ended up forming the neutral candle that you see on the chart. This market is essentially consolidation between the 1900 level on the top, and the 1860 level on the bottom. With that, it appears that we are going to continue to go sideways for the short term, but ultimately we need a break above the 1900 level in order to start going long. That being the case, we believe that this market at that point in time would go to the 2000 level.


http://youtu.be/PC422omb_3c


Attachment 7103

US Dollar Index forecast for the week of May 19, 2014, Technical Analysis

The US Dollar Index rallied during the course of the week, but as you can see only kept about half of the gains. With that, it appears that the market settling above the 80 handle of course is a good sign, but it will more than likely continue to be a choppy market going higher. We believe that the 79 level is in fact a major “bottom” in this market, and if we get below there, things get ugly for the US Dollar. Ultimately though, we are bullish and we believe that ultimately this market will head back towards the 81.25 level at the very least, if not heading as high as the 83 or even the 85 level.

http://youtu.be/tjpTmW8fb34


Attachment 7104

Silver forecast for the week of May 19, 2014, Technical Analysis

Silver markets tried to rally during the course of the week, but gave up most of the gains by the time we closed on Friday. We see the $20.00 level as massively resistive now, as the market has formed a shooting star. However, we have also formed a couple of hammers in this general vicinity, so the end of the day it’s probably going to be consolidation going forward. If we make a fresh, new low, then at that point time we would be willing to sell, but at this point in time would be very hesitant to do so. As far as buying is concerned, we needed at least a daily close above the $20.00 handle.

http://youtu.be/wFptXnlbO28


Attachment 7105

Gold forecast for the week of May 19, 2014, Technical Analysis

Gold markets went back and forth during the week, but essentially ended up relatively flat. We sit just below the $1300 level, which is a significant barrier, but it seems to also be the so-called “fair value” of the yellow metal at the moment. With that, we don’t really see much in the way of a trade until we get an impulsive candle, something that we are not seeing at the moment. Because of this, we feel that this is probably going to be more of a short-term traders market at this point.


http://youtu.be/bvrrAGmWiSY


Attachment 7106

USD/JPY forecast for the week of May 19, 2014, Technical Analysis

USD/JPY pair went back and forth during the course of the week, but found the 101.25 level to be supportive yet again. In fact, that area is being protected by an uptrend line as well, so as a result we feel that this market will more than likely go higher from here, but could very well be contained within the consolidation area that we’ve been stuck in that has an upside limit of 103. Ultimately, we do believe that this market goes higher, but might take a little bit more time to breakout to the 105 level.


http://youtu.be/4IAd4eH5a2g


Attachment 7107

USD/CAD forecast for the week of May 19, 2014, Technical Analysis

The USD/CAD pair initially tried to rally during the week, but as you can see we ended up falling. We rest right on the 1.0850 handle, an area of significant support. That being the case, we feel that a break down below here will more than likely send this market looking for the 1.07 level first, and then the 1.06 level where we would expect a significant amount of support. Any supportive candle down there, we would be more than willing to start buying. In the meantime though, it does look like this pair is probably going to see more weakness.


http://youtu.be/U-zIeDytDss


Attachment 7108

NZD/USD forecast for the week of May 19, 2014, Technical Analysis

The NZD/USD pair tried to rally during the course of the week, but as you can see pulled back to form a shooting star for the second week in a row. It appears that we are in the middle of consolidation, so it’s difficult to imagine that were going to break down significantly from here, but the fact is that we will more than likely test the 0.85 level in the short term. We believe that a supportive candle in that area is a nice longer-term buying opportunity as the market should head to the 0.90 and oh.

http://youtu.be/zT0Vambc9sg


Attachment 7109

GBP/USD forecast for the week of May 19, 2014, Technical Analysis

The GBP/USD pair fell during the bulk of the week, but found enough support below to form a hammer. This hammer should send prices back to the upside, but we had a shooting star from the previous week right at the 1.70 level, an obvious resistance area on the longer-term charts. Because of this, we feel that this market will probably go higher, but it may be a bit of a grind from here as the resistance will have to be overcome. However, we get above the 1.70 level, we feel that this market will in fact go much higher, probably to the 1.75 level, if not higher than that. Obviously, that’s a longer-term Outlook, but ultimately we do see that this market has been very well supported and has had a nice uptrend for some time. In fact, the bottom of the hammer from the week touched that uptrend line that we just mentioned.

There should be a bit of a “floor” at the 1.65 handle, which has been massively supportive as well as resistive in the past. In fact, that’s a very thick support zone down to the 1.64 handle at the very least, so the on-demand unit broken to the downside are very slim at this point in time. With that, we think that buying on the dips will be done by short-term traders, and probably will remain so until we get to the 1.75 handle, whenever that ends up being.

If we did manage to break down below the 1.64 handle, we think at that point time the market would be somewhat broken, and would almost have to go down to the 1.60 handle if not lower than that given enough time. However, the interest rate differential continues to favor the British pound, and we see absolutely no reason to think why that’s going to change anytime soon, so ultimately we feel that we are in an uptrend going forward, thereby giving us much more confident on the long side of the equation in this pair.


http://youtu.be/H5WHpCEkwz4


Attachment 7110

EUR/USD forecast for the week of May 19, 2014, Technical Analysis

The EUR/USD pair fell during most of the week, but did manage to close right at the 1.37 handle, which is significant as it would has been both supportive and resistive recently. On top of that, there is an uptrend of sorts still being held by a line there, and as a result we feel that this market could continue to go higher. We may have just found the summer range – the area between the 1.37 level on the bottom, and the 1.40 level on the top.


http://youtu.be/uDSApMKHHVI


Attachment 7111

Forex - Weekly outlook: May 19 - 23

The dollar ended Friday’s session slightly lower against the yen as a weaker-than-expected reading on U.S. consumer sentiment offset a report showing that U.S. home construction rose strongly in April.

USD/JPY settled at 101.52, down 0.05% for the day, not far from the two-month trough of 101.30 reached in the previous session. For the week, the pair was down 0.66%.

The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March. It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.

The euro was lower against the dollar, with EUR/USD settling at 1.3693, holding just above the two-and-a-half month low of 1.3647 reached on Thursday. For the week, the pair was down 0.45%.

The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.

The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.

EUR/JPY ended Friday’s session at 139.03, down 0.17% for the day, after falling to lows of 138.78 earlier in the session, the weakest since February 12.

Elsewhere, sterling pushed higher against the dollar on Friday, with GBP/USD up 0.14% to 1.6812 at the close. For the week, the pair lost 0.35%.

Sterling weakened across the board on Wednesday after the Bank of England indicated that it is in no rush to hike interest rates, saying the economic recovery was still at an early stage.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

The euro zone is to publish what will be closely watched data on private sector activity, while the U.K. is to release data on consumer prices.

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

Monday, May 19

• New Zealand is to publish data on producer price inflation. Japan is to release a report on core machinery orders.
• Germany’s Bundesbank President Jens Weidmann is to speak at an event in Frankfurt; his comment will be closely watched. Later in the day the German central bank is to publish its monthly report.
• Markets in Canada are to remain closed for a national holiday.

Tuesday 20

• The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• In the euro zone, Germany is to release data on producer price inflation.
• The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
• Canada is to publish data on wholesale sales.
• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• The Bank of Japan is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. The announcement is to be followed by a press conference.
• Japan is also to publish data on the trade balance, the difference in value between imports and exports.
• Australia is to publish data on the wage price index and a private sector report on consumer sentiment.
• The euro zone is to release data on the current account.
• The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, the Bank of England is to publish the minutes of its May meeting.
• Fed Chair Janet Yellen is to speak at an event in New York.
• Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• China is to publish the preliminary reading of the HSCB manufacturing index.
• New Zealand and Australia are to produce data on inflation expectations.
• The euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
• The U.K. is to publish revised data on first quarter economic growth, as well as reports on business investment and public sector borrowing. The U.K. is also to produce private sector data on industrial order expectations.
• Canada is to release data on retail sales.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• In the euro zone, the Ifo Institute is to publish data on German business climate.
• Canada is to publish data on consumer price inflation.
• The U.S. is to round up the week with data on new homes sales.

Forex - USD/JPY weekly outlook: May 19 - 23

The dollar edged lower against the yen late Friday after U.S. data on housing starts and consumer sentiment painted an uneven picture of the economic recovery.

USD/JPY settled at 101.52, down 0.05% for the day, not far from the two-month trough of 101.30 reached in the previous session. For the week, the pair was down 0.66%.

The dollar briefly edged up to session highs against the yen after the Commerce Department reported that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March.

It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was offset by a report showing that U.S. consumer confidence deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.

Elsewhere Friday, EUR/JPY settled at 139.03, down 0.17% for the day, after falling to lows of 138.78 earlier in the session, the weakest since February 12.

The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.

The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

The Bank of Japan’s monetary policy decision on Wednesday will also be in focus.

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

Monday, May 19

• Japan is to release a report on core machinery orders.

Tuesday 20

• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• The BoJ is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. The announcement is to be followed by a press conference.
• Japan is also to publish data on the trade balance, the difference in value between imports and exports.
• Fed Chair Janet Yellen is to speak at an event in New York.
• Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• The U.S. is to round up the week with data on new homes sales.

Forex - USD/CHF weekly outlook: May 19 - 23

The dollar moved higher against the Swiss franc on Friday, but remained below the three-month peaks hit in the previous session as investors digested a mixed bag of U.S. economic data.

USD/CHF ended Friday’s session at 0.8926, up 0.19% for the day, holding just below the highs of 0.8959 struck on Thursday, the most since February 13.

The dollar was boosted after the Commerce Department reported that U.S. housing starts jumped 13.2% in April, after a 2.0% increase in March.

It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was offset by a report showing that U.S. consumer confidence deteriorated in May. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.

The dollar advanced to three month highs against Swissy in the previous session as sharp losses in the euro bolstered the greenback.

The single currency came under renewed selling pressure after weaker-than-expected data on euro zone first quarter growth added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.

The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.

EUR/CHF ended Friday’s session at 1.2221, edging up 0.08%.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

Ahead of the coming week, Investing.com has compiled a list of this and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.

Tuesday 20

• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• Fed Chair Janet Yellen is to speak at an event in New York.
• Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• The U.S. is to round up the week with data on new homes sales.

USD/CAD weekly outlook: May 19 - 23

The U.S. dollar was lower against the Canadian dollar late Friday following the release of upbeat U.S. housing sector data, which offset a report pointing to a deterioration in U.S. consumer sentiment.

USD/CAD ended Friday’s session at 1.0863, down 0.17% for the day. For the week, the pair lost 0.32%.

Investor sentiment was boosted after the Commerce Department reported that U.S. housing starts jumped 13.2% in April, after a 2.0% increase in March.

It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was offset by a report showing that U.S. consumer confidence deteriorated in May. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.

Earlier in the week risk appetite was hit by concerns over the outlook for global growth after data showed that the euro zone economy grew less strongly than forecast in the first three months of the year.

The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.

In Canada, data on Friday showed that foreigners reduced their holdings in Canadian securities in March, while Canadian investors purchased foreign securities at the fastest pace in 16 months.

Statistics Canada said foreign investors sold a net C$1.23 billion in Canadian securities, while Canadian investors acquired C$7.88 billion in foreign securities, the largest investment abroad since November 2012.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

Canadian data on retail sales and consumer prices will also be in focus.

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

Monday, May 19

• Markets in Canada are to remain closed for a national holiday.

Tuesday 20

• Canada is to publish data on wholesale sales.
• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• Fed Chair Janet Yellen is to speak at an event in New York.
• Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• Canada is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• Canada is to publish data on consumer price inflation, which accounts for the majority of overall inflation.
• The U.S. is to round up the week with data on new homes sales.

AUD/USD weekly outlook: May 19 - 23

The Australian dollar eased up modestly against its U.S. counterpart on Friday, as market players weighed a mixed bag of U.S. data on housing starts and consumer sentiment.

AUD/USD hit 0.9408 on Wednesday, the pair’s highest since April 15, before subsequently consolidating at 0.9365 by close of trade on Friday, up 0.1% for the day and 0.02% higher for the week.

The pair is likely to find support at 0.9326, the low from May 15 and resistance at 0.9408, the high from May 14.

The Commerce Department reported Friday that U.S. housing starts rose 13.2% in April, after a 2.0% increase in March. It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather-related slowdown over the winter.

But the upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8 in May, from 84.1 in April. Analysts had expected a slight uptick to 84.5.

Meanwhile, in Australia, the nation’s Treasury said, in its annual budget report released Tuesday, that the government aims to nearly halve its budget deficit over the next year through a combination of spending cuts and tax increases.

According to the report, the deficit is forecast to fall from A$50 billion to A$30 billion, while the spending cuts however are expected to lead to thousands of job losses.

The budget report also mentioned the government's plans to spend as much as A$11 billion on key infrastructure projects such as roads, railways and a new airport in Sydney.

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending May 13.

Net longs totaled 17,127 contracts, compared to net longs of 8,637 in the preceding week.

In the week ahead, investors will be looking ahead to the release of the minutes from both the Reserve Bank of Australia’s and the Federal Reserve's most recent monetary policy meeting.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.

Tuesday, May 20

• The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• Australia is to publish data on the wage price index and a private sector report on consumer sentiment.
• Fed Chair Janet Yellen is to speak at an event in New York. Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• China is to publish the preliminary reading of the HSCB manufacturing index. The Asian nation is Australia’s largest trade partner.
• Australia is to produce data on inflation expectations.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• The U.S. is to round up the week with data on new homes sales.

Economic Calendar events to watch this week

The economic calendar for upcoming week is less busy after last week saw several key economic data releases. The main events this week are the publication of the minutes of the Federal Reserve’s April meeting and data on U.S. home sales. Economy watchers will also be focusing on manufacturing data from China and the euro zone. Here are some key events to watch:

Federal Reserve minutes

The Fed is to publish the minutes from its April 29-30 meeting on Wednesday. There was no press conference after the most recent monetary policy meeting, and the rate statement was by and large unchanged from the previous release. The minutes are expected to indicate that the unwinding of the bank’s stimulus program will proceed on its current timetable.

Fed speakers

Fed Chair Janet Yellen is to deliver the commencement address at New York University on Wednesday. Other Fed speakers this week include Richard Fischer (Dallas) on Monday, Charles Plosser (Philadelphia) and William Dudley (New York) on Tuesday, Narayana Kocherlakota (Minneapolis) and Dudley again on Wednesday; and Williams again on Thursday.

Global manufacturing data

China is to publish the preliminary reading of the HSBC manufacturing PMI on Thursday while the euro zone is also to publish its manufacturing PMI. The HSBC Chinese manufacturing PMI has remained in contraction territory since December 2013, fuelling fears over a slowdown in the world’s second largest economy. Economy watchers are expecting an uptick to 48.4 this month from 48.1 in April. The euro zone manufacturing index is expected to pull back slightly from last month’s three-year highs.

US home sales

The U.S. is to release data on existing home sales on Thursday and a report on new home sales on Friday. Market expectations are for a pick-up in sales of both new and existing homes, while weak numbers would point to underlying weakness in the sector.

Bank of Japan monetary policy announcement

The BoJ is to announce its benchmark interest rate and publish its monetary policy statement on Wednesday. The BoJ will now have data on the impact of last month’s sales tax increase on the economy, which could prompt further monetary policy action by the bank.

NZD/USD weekly outlook: May 19 - 23

The New Zealand dollar fell from the previous session’s one-week high against its U.S. counterpart on Friday, amid indications that the U.S. economy is shaking off the effect of a weather-related slowdown over the winter.

NZD/USD hit 0.8694 on Thursday, the pair’s highest since May 7, before subsequently consolidating at 0.8634 by close of trade, down 0.12% for the day but still 0.25% higher for the week.

The pair is likely to find support at 0.8607, the low from May 13 and resistance at 0.8694, the high from May 15.

The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, the largest increase in five months and following a 2.0% increase in March.

The upbeat housing data came one day after a report from the U.S. Department of Labor showed that the number of people who filed for unemployment assistance in the U.S. last week fell to a six-year low of 297,000.

The robust data underlined the view that the U.S. economy was regaining traction after being slowed by unusually cold temperatures during the winter months.

Meanwhile, in its annual budget release published Thursday, New Zealand's Treasury said the operating surplus will be NZ$372 million in the year through June 2015, up from a previously forecast NZ$86 million.

The Treasury also forecast the nation's jobless rate will decline to 4.4% in 2018 from a projected 5.4% next fiscal year.

The report came after Reserve Bank of New Zealand Chairman Graeme Wheeler said last week that the speed and extent of further interest rate increases will depend on economic performance and how much the nation’s strong currency weighs on inflation.

The central bank has already raised its benchmark interest rate twice this year to 3%, after keeping at a record low 2.5% to support the economy.

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the New Zealand dollar in the week ending May 13.

Net longs totaled 19,340 contracts as of last week, compared to net longs of 20,693 contracts in the previous week.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

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

Monday, May 19

• New Zealand is to publish data on producer price inflation.

Tuesday, May 20

• Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• Fed Chair Janet Yellen is to speak at an event in New York. Later Wednesday, the Fed is to publish the minutes of its May meeting.

Thursday, May 22

• New Zealand is to produce data on inflation expectations.
• China is to publish the preliminary reading of the HSCB manufacturing index. The Asian nation is the New Zealand’s second-largest trade partner.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• The U.S. is to round up the week with data on new homes sales.

GBP/USD weekly outlook: May 19 - 23

The pound moved higher against the dollar on Friday, recovering from a one-month low reached in the previous session, but gains were limited following the release of mixed U.S. economic data.

GBP/USD ended Friday’s session at 1.6812, up 0.12% for the day after falling to lows of 1.6730 on Thursday, the weakest since April 16. For the week, the pair lost 0.35%.

Cable was likely to find support at 1.6730 and resistance at 1.6881, the high of May 13.

The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March.

It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 in April. Analysts had expected a slight uptick to 84.5.

Sterling remained broadly softer after the Bank of England played down speculation over the timing of possible rate hikes on Wednesday, saying the economic recovery was still at an early stage.

The BoE left its forecasts for growth and inflation largely unchanged in its quarterly Inflation Report and indicated that it is still in no rush to hike interest rates.

The bank said there is scope to further reduce the amount of slack in the economy before hiking rates and reiterated that when rates did start to rise they would do so only gradually.

The pound had already weakened earlier Wednesday after official data showed that the U.K. unemployment rate fell to a more than five-year low in the three months to March but wage growth slowed, dampening optimism over the recovery.

The U.K. unemployment rate dropped to 6.8% in the three months to March, down from 6.9% in February but average wages rose by a weaker than expected 1.7% in the first quarter from the same period a year earlier.

Elsewhere Friday, sterling was higher against the euro, with EUR/GBP at 0.8146 in late trade, not far from the 16-month trough of 0.8125 reached on Wednesday.

The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

U.K. data on consumer prices and retail sales will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.

Tuesday 20

• The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, the BoE is to publish the minutes of its May meeting.
• Fed Chair Janet Yellen is to speak at an event in New York. Later Wednesday, the Fed is to publish the minutes of its latest meeting.

Thursday, May 22

• The U.K. is to publish revised data on first quarter economic growth, as well as reports on business investment and public sector borrowing. The U.K. is also to produce private sector data on industrial order expectations.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• The U.S. is to round up the week with data on new homes sales.

EUR/USD weekly outlook: May 19 - 23

The euro slid lower against the dollar on Friday following the release of uneven U.S. data, as concerns over the strength of the recovery in the euro zone added to pressure on the European Central Bank to ease monetary policy.

EUR/USD was at 1.3693 late Friday, holding just above the two-and-a-half month low of 1.3647 struck in the previous session. For the week, the pair was down 0.45%.

The pair is likely to find support at 1.3647 and resistance at 1.3731, Thursday’s high.

The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March.

It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.

The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 in April. Analysts had expected a slight uptick to 84.5.

The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the ECB to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.

The euro zone’s gross domestic product grew just 0.2% in the first quarter Eurostat reported, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.

The French economy stagnated in the first three months of the year, while Italy, Portugal and the Netherlands all reported contractions.

Germany’s economy, the euro zone largest, outperformed in the first three months of the year, expanding 0.8%, beating expectations of 0.7%.

Also Thursday, Eurostat reported that the annual rate of inflation in the euro zone was unchanged at 0.7% in April, in line with forecasts. The inflation rate is still well below the ECB target of close to but just under 2%.

Meanwhile comments by a senior EBC official fuelled speculation that the bank is preparing to act at its next meeting in June to shore up the recovery in the currency bloc and stop inflation from falling too low.

In an interview with The Wall Street Journal, ECB Vice President Vitor Constancio said Thursday the central bank was open to more monetary easing and was determined to act swiftly if required.

EUR/JPY ended Friday’s session at 139.03, down 0.17% for the day, after falling to lows of 138.78 earlier in the session, the weakest since February 12.

In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.

The euro zone is to publish what will be closely watched data on private sector activity on Thursday.

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

Monday, May 19

• Germany’s Bundesbank President Jens Weidmann is to speak at an event in Frankfurt; his comment will be closely watched. Later in the day the German central bank is to publish its monthly report.

Tuesday, May 20

• In the euro zone, Germany is to release data on producer price inflation.
• In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.

Wednesday, May 21

• The euro zone is to release data on the current account.
• Fed Chair Janet Yellen is to speak at an event in New York. Later Wednesday, the Fed is to publish the minutes of its latest meeting.

Thursday, May 22

• The euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
• The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.

Friday, May 23

• In the euro zone, the Ifo Institute is to publish data on German business climate.
• The U.S. is to round up the week with data on new homes sales.

During those occasions, you think that its hard to cut your losses in light of your nature to protect your choices. The great part about you is that you like to confront and settle difficulties. Life is an adventure, and you anticipate new things consistently. Your get-up-and-go reveals your character as a person who doesn't permit issues to overload you.