FOMC Statement, Advanced GDP, and Many More to come this week. However, the biggest market mover for this week would be Biden’s inheritance tax rate change. Get more insights for the new trading week with AtoZ Markets’ Forex Weekly Fundamental Forecast.
April 25, 2021, | AtoZ Markets– According to the macroeconomic world, the US Dollar is falling, which means losing its value as a Global Reserve Currency. However, there is no reason to believe that the falling dollar would stay long.
When the dollar is falling, the overall system is ok. The US Dollar denominates approximately 40% of the global debts. Therefore, when the dollar is weak, it serves as a cheaper dollar that frees up cash. Moreover, the weaker dollar encourages foreign investors to invest in US Assets.
As a result, although the US Dollar is weak, FED is still optimistic about the US economy by saying that the economy is recovering from the pandemic effect. What might be the effect of weaker US dollars in other currencies? How would the US dollar react to the FOMC statement and Advanced GDP? Let’s see the forex weekly analysis to see the possible movement in most currency pairs and cryptos!
Forex Weekly Fundamental Outlook- FOMC Statement & GDP
The Euro showed a decent movement that took the price higher above the 1.2 level with a stable weekly close. Therefore, any weaker US Dollar might create further bullish pressure in the EURUSD this week.
Let’s start the Forex pairs Weekly Fundamental Outlook with the EURUSD:
Euro is beating US Dollar as the price moved higher at stabled above the 1.2 level. Moreover, the further bullish implication is pending from the EU Fash GDP expected to release on Tuesday. Currently, the Eurozone economy is expected to shrink by 0.8% in the first 3 months of 2021, compared to the previous quarter.
Moreover, this release would confirm further about the Euro, whether it went into a double-dip recession or not. The Eurozone economy has faced a negative impact from the latest COVID-19 virus. Currently, the loosening of infections and EUs vaccination may indicate a strong rebound in the Q2 GDP.
Euro Flash estimates are also expected release on Friday and may increase by 1.6% YoY in April. Moreover, German’s IFO business climate realize on Monday would indicate further about the Eurozone economy.
For trades, the 1.20 level would be significant for this week. If the price remains stable above this level after the FOMC Statement, we may expect further bullishness.
Japan is another hard heated country by a virus that did not impose a competitive lockdown yet. On the other hand, the infection is increasing, meaning that some regions may be imposed as a state emergency. Nevertheless, the strong demand for exports is also supporting the Japanese economy, and the Bank of Japan may revise the upside growth forecasts in its 2 days policy meeting on Tuesday.
The current projection from the BoJ decision is that it may lower the inflation forecast for the current financial year. The further decision about the Japanese economy may release at the April meeting. There are indications about the mix of monetary easing measures for some time to come.
As a result, the rising yield differentials as global government bond yields have surged this year. A weaker Yes would be positive for policymakers and investors. However, further indication about the Japanese economy may come forward after the Retail sales on Wednesday and industrial output on Friday.
This week would be very interesting in the Asia pacific as Australian CPI will release on Wednesday and Chinese manufacturing PMI on Friday. After the downside pressure in March, April would be the China- sensitive to the Australian Dollar. However, it is still not the right time to say what price will do against the US Dollar. As of now, the dovish FOMC statement would create an immediate impact on the AUDUSD price.
On the other hand, next week’s inflation figure would further indicate the Australian economy. A recovery in the Chinese manufacturing activity may have a positive impact on the Australian economy.
However, US Dollar has got some to-tier releases this week where the current FOMC statement may be dovish due to the recent Tax hike. Overall, a stable AUDUSD with a hawkish FOMC would be positive for AUDUSD bulls for the coming weeks.
Bitcoin price moved down recently after peaking at the all-time high. However, there is no surprising fact about the downside pressure as crypto investors are very familiar with such volatility. Investors usually consider dips as further buying opportunities to instruments like Bitcoin.
Bitcoin’s 15% loss in earlier weeks took multiple weeks to recover, and analysts consider this nature as common like other trading instruments.
According to a prominent cryptocurrency newsletter, the market remains dynamic and consistent after the halving on the Bitcoin blockchain. The halving happens when the blockchain automatically cuts the reward for miners by 50%. It happens every four years, and the last one was in May 2020.
However, for this week, investors should consider the 50,000 level as a significant price mover. The dovish FOMC statement might influence investors to rely on crypto than traditional fiats.
In February 2014, Dogecoin’s co-founder removed the supply cap of Dogecoin from 100 billion coins. As a result, investors became discouraged to hear that news with the fear of less possibility of a price increase.
The inflationary supply and new coin may pour the market where Bitcoin remains stable and valuable with a market cap of 21 million units.
According to the current mining rate, almost 10,000 new Dogecoin are released every minute. Therefore, almost 14.4 million are Dogecoins are including in the market circulation every day. On the other hand, the block reward remains fixed where not more than 10,000 Dogecoin are awarded to miners in every free minute.
However, the Dogecoin developer said that the market capitalization and Dogecoin network are stable and potential. In this situation, investors might see corrective and slow movement in Dogecoin compared to stable cryptocurrencies like Bitcoin and Ethereum.
The overall cryptocurrency market follows Bitcoin, while the Etherum took the lead when the BTC price was down in recent days.
Over the past few session, ETH delivered a return of 5.5% against Bitcoin’s -12.4% return. According to some prominent analysts, the bullish momentum in Ethereum came from the increase in Defi and ETFs based on Ethereum. The Ethereum Exchange Traded Funds (ETFs) launched on the Canadian exchange, which is considered the major step towards digital assets. Therefore, some analysts project that ETH may break above the $3,000 level in the coming months.
Investors should keep an eye on what is happening on the overall DeFi market related to Ethereum. The latest information about the cryptocurrency and Ethereum is available on AtoZMarkets Cryptocurrency sector.
Exxon Mobil [XOM]
Exxon Mobil announced that it would lower carbon emissions to match the demand for cleaner energy. In the latest Exxon Mobil investors day, the management said that the current change in oil majors and green energy would encourage the company to consider as a fact. Moreover, Exxon management said that they are intended to create a carbon solution business, focusing on carbon capture and sequestration projects.
Exxon showed a 92.7% decline in Q4 earnings in the financial release, where the revenue was dropped by 30.7% to $46.54 billion. The upstream division made $18,5 billion in the loss, while the downstream division made $1.2 billion.
Therefore, as the Exxon Mobil stock is not supportive in terms of earnings, we may expect a continuation of correction from the $55.57 level.
AMD showed a better than expected earnings report in Late January with strong demand in the PC gaming and data center products. In the Q4, the earnings came at 52 cents per share with a $3,42 billion sales in December quarter. The Q4 earnings showed a 63% increase in earnings and the projection for the current quarter is a further 79%.
Under the supervision of the current AMD CEO, Intel is far behind AMD in terms of CPU making. AMD is making 7-nanometer chips while Intel is still struggling with a 10-nanometer scale. Overall, AMD showed a fantastic return over the past 5 years in both the personal computers and servers sector.
Overall, after a lot of indecision, the financial market is may come back with liquidity after getting direction from the FOMC statement. On the other hand, the center of the price volatility in the market came from the COVID-19 3rd wave. Currently, it became a major issue in Asian countries India and Brazil. Therefore, investors should see how ECB and FED react on this matter to get a precise direction.
What do you expect from the FOMC Statement? Let us know in the comments section below!