FxWirePro: Currency Weekly Outlook

US Dollar index was trading slightly higher and jumped nearly 50 pips jump in the previous week. US Fed minutes meeting clearly stated that the Central bank is to keep rates unchanged for a while unless the economy is showing a further slowdown. The index hits a high of 98.31 and is currently trading around 98.26.

On the data front, US housing starts and existing home sales came better than expected. The flash manufacturing PMI at 52.2 vs forecast of 51.5. German manufacturing sentiment improved slightly to 43.8 vs 42.9 expected.

The Canadian retail sales declined slightly less than forecast and it came at -0.1% vs estimate of -0.3%.BOC Governor Poloz said that the economy is in the good shape and monetary policy conditions were about right. This has decreased hopes of rate cut by the Bank of Canada in the coming months.

The yellow metals continue to trade lower after showing a minor recovery till $1478. Any break beyond $1480 confirms slight bullishness.

US 10-year yield is trading slightly lower for 3rd consecutive after hitting 2-1/2 month high at 1.97% and lost more than 12%. The spread between US 10-year and 2-year has narrowed to 14.6 bps.

Weekly Technical:

EURUSD:

Major trend reversal level- 1.10989

Near term support- 1.0989/1.0935

Near term resistance – 1.110/1.1180

USDJPY:

Major trend reversal level- 109.50

Near term support- 107.80/106.40

Near term resistance – 109.50/110.60

USDCHF

Major trend reversal level- 1.0030

Near term support- 0.9870/0.97700

Near term resistance – 1.0030/10060

USDCAD

Major trend reversal level- 1.3385

Near term support- 1.3180/1.310

Near term resistance – 1.3385/1.3435

Gold

Major trend reversal level- $1445

Near term support- $1445/$1415

Near term resistance – $1480/$1500

WTI Crude

Major trend reversal level- $58.75

Near term support- $56.20/$55

Near term resistance – $58.75/$60.50

Major Economic events for the week

USD CB Consumer confidence - Tuesday (3:00 PM GMT)

USD Durable goods orders - Wed (1:30 PM GMT)

USD Chicago PMI - Wed (02:45 PM GMT)

USD Core PCE Price Index  - Wed (3:00 PM GMT)

CAD GDP - Fri (1:30 PM GMT)

EUR German Flash manufacturing PMI -Fri (8:30 PM GMT)

CAD Core Retail sales m/m- Fri (1:30 PM GMT)