There is a possibility of muted economic events this week except for RBA meets. However, there are some good fundamental events that may create a decent movement in major currency pairs. Get more insights for the new trading week with AtoZ Markets’ Forex Weekly Fundamental Forecast.
April 04, 2021, | AtoZ Markets– In this week, most of the markets will be closed on Monday for the Easter celebration. Therefore, we may expect a muted week except for the RBA Meets.
Despite the Reserve Bank of Australia’s policy decision, the European central banks last meeting could indicate a reaction to the Eurozone economy. Moreover, the employment number of Canada and ISM manufacturing PMI of the US will be in the limelight to watch.
AtoZ Markets team has highlighted below the main drivers in our Forex Weekly Fundamental Forecast.
Forex Weekly Fundamental Outlook- RBA Meets
We may see a corrective movement this week due to the monthly opening and Easter holiday. Moreover, the current uncertainty about the COVID-19 pandemic 3rd wave may influence forex currency pairs adversely.
So let’s start the Forex Weekly Fundamental Outlook with the EURUSD:
The ECB will release its account of the March policy meeting on Thursday. Currently, ECB may take an aggressive decision regarding the rising yields, arguing that it might lead to economic sufferings.
However, the Eurozone bonds have been caught up in the global yield form. If there is no upward pressure on the government bond yield, the PEPP’s firepower might start getting depleted.
However, it might be a hot issue given that there is plenty left in the PEPP envelope. Here, the main focus would be March minute, where policymakers may reverse the yield’s market-driven gains.
In terms of economic events, the is no top-tier releases waiting for this week for the Euro. However, the final services PMI on Tuesday and German Industrial Orders on Thursday would gather some investors attraction.
The Reserve Bank of Australia May slashes the cash rate to a record low due to the QE yield curve control.
According to some analysts, the recent economic hit from the COVID-19 pandemic to Australia’s biggest trading partner country may lead to a rate hike in 2022. However, the market was fueled by the RBA’s tapering that sent yields to the sky. Therefore, investors become confused regarding whether RBA doubts the bond market participation or not. Those doubts were cleared by decreasing the bond purchase program to undermine its policy of pinning the three-year yield at 0.1%.
In the last few months, there was bond market volatility where investors may see a direction from RBA meets. A strong dovish tone might create bearish pressure for the Australian Dollar facing a backfoot against the US Dollar.
The strong US economy turned the FX table upside down where the Aussie and Kiwi were main victims. However, the Canadian Dollar eases the second-largest best-performing currency after the US Dollar.
The better than expected rebound of the Canadian Dollar with a robust outlook for oil indicating an economic boom in America, Canada’s largest trading partner.
The March Job report will show up on Friday that may create additional support to the Canadian economy. In the last month, The Canadian economy added 259.2k jobs in February and the current projection of 90k for the march.
If the actual report can beath the expectation, we may see a bearish pressure in the USDCAD. However, Canada started to reduce the balance sheet by $100 billion Canadian Dollar, underscoring the loonie’s relative appeal.
Bitcoin investors should be aware of the price volatility, bubble and dramatic price crash. The price soared to the record $62,000 level in 2021, and some prominent crypto analysts are expecting the price to fall by 50% and even more in the coming days.
Huge amounts of money have been pumped into the Cryptocurrency market that pushed the price higher. Moreover, the support of economies and global financial conditions pushed investors to inject money into the crypto market.
However, investors should focus on what Fed says this week in the FOMC. Any sign of the dovish dollar would be positive for Bitcoin, but a strong dollar may influence a massive fall in the Bitcoin Price.
Ethereum provided the first crypto gift that moved to the all-time high as it breached the much-desired $2,000 mark.
Despite spending much of its five-year lifespan, ETH took centre stage after a year of huge gains cemented its place as second billing in the cryptocurrency cast list.
Last year, Ether (ETH) was worth less than $150 and now above $2000, indicating a solid position beside Bitcoin.
Despite the slower week, the strong bullish possibility in Ethereum may come from its strong users’ interest during the Easter holidays.
Facebook showed a better-than-expected earnings report in Q4 where the EPS came at $3.88 a share. However, the daily user activity was down in the US and Canada. The strongest daily user activity was during the COVID-19 pandemic where people were mostly at home due to the lockdown.
In the broader view, more than 10 million businesses use social media sites to connect with customers. Currently, Facebook has 1.845 million daily active users, up from 1.82 million in the previous quarter.
Based on the present market condition, investors should wait for what price action says at the $300 area, from where we may see some bearish pressure.
McDonald’s showed its strongest quarter of the year, recovering nearly 99% of fourth-quarter 2019 global comparable sales. the US comparative sales were 5.5% higher in the Q4 and 0.4% for the year, pointing out six consecutive years of positive sales.
On the other hand, the Global comparative sales were down by 1.3%, improved from the prior quarter. The consolidated revenue decreased by 2%, while the systemwide sales increased by 1%.
Wall Street’s response to the bigger spending plan has been lukewarm. However, investors’ expectation was an instant gratification with a solid gain.
Currently, better profits are still deferred where there was a new problem regarding Franchisees. Still, analysts largely endorse the Golden Arches’ strategy to capitalize on its market position.
IBM, named initially International Business Machines, helped pioneer several segments in the Computer sector. Recently, announced that they have a plan to spin off $19 billion in the technology consulting business.
Overall, the company invested more than $120 billion in remaking the infrastructure in the last 8 years. The development includes $29 billion in capital expenditure, focused on cloud computing, mostly.
IBM released its Q4 earnings report on January 21, where the adjusted earnings fell 56% to $2.07 a share, vs the expectation of $1.81 a share. Moreover, the revenue was down by 6% to $20.37 billion, below the expectation of $20.7 billion.
In the Cloud Computing and Cognitive Software segment, the Red Hat brought $6.84 billion in revenue, 5% below the expectation of $7.18 billion.
Overall, We may see a corrective movement this week in most of the major currency pairs. However, any sign of a dovish tone from RBA meets would create a bearish pressure in the AUDUSD. On the other hand, the price may face some volatility during the FOMC meeting minutes.
What do you expect from the RBA Meets? Let us know in the comments section below.