After the Better than expected PMIs of the Eurozone, investors will focus on How Non-Farm Payroll releases this week. Moreover, the manufacturing PMI, OPEC meeting may work as a key price driver for this week. Get more insights for the new trading week with AtoZ Markets’ Forex Weekly Fundamental Forecast.
March 28, 2021, | AtoZ Markets– The COVID-19 pandemic is keeping the European economy volatile. The risking cases in Germany, France, Italy, and Austria indicate uncertainty over the market.
April may work as a turning point of the vaccination where any sign of the reduction in affection will indicate strength in the European economy. Currently, the vaccination process is running where the UK is in the leading position with 46%. Moreover, the US is at 39%, where the EU is still lagging at 14%.
So what for this week?
This week’s main price driver will be the Non-Farm Payroll, where the current expectation is an increase of almost 200%.
AtoZ Markets team has highlighted below the main drivers in our Forex Weekly Fundamental Forecast.
Forex Weekly Fundamental Outlook
We may see a corrective movement this week due to the monthly profit-taking. Moreover, the current uncertainty about the COVID-19 pandemic 3rd wave may influence the financial market adversely.
So let’s start the Forex Weekly Fundamental Outlook with the EURUSD:
Last week we saw an increase in the Eurozone PMI releases. The preliminary manufacturing PMI moved to 62.4 from 58.0 in February 2021. The increase in the PMI is the highest since 1997 from the publication was started.
Moreover, the service index moved higher to almost 49 levels. The increase in PMIs indicates a tentative recovery in the Eurozone economy at the end of Q1.
However, in the financial market, the US Dollar remained the dominator that moved higher against the Euro. On the other hand, the US 10 years yield bond moved down last week with a strong treasury auction in the global equity markets.
The US presidential election was the key driver to the uncertain market condition in the US job market. Since the negative Non-Farm Payroll in December, investors saw job gains of 166K in January and 379K in February.
Therefore, the US job market’s growth is still pending, and any sign of the increase in NFP would create a bearish pressure in the EURUSD.
This week, we will see the final number of the UK Q4 GDP that may indicate that the economy was increased by 1% in the Q4, 2020.
Service sectors move higher in the Q4 with an expansion of 0.6%, where the government expenditure increases 6.4%. Moreover, the private consumption was at 0.2%, compared to the 19.5% in Q3.
On the other hand, the UK manufacturing sector is still strong compared to the European counterparts despite several lockdown restrictions. The lockdown started in March and April 2020 where the UK manufacturing rebounded from three years high at 57.50.
Since then, the economic recovery started that picker further after last week’s flash manufacturing PMI release at 57.9 from 55.1 in February.
The quarterly GDP is the main interest on GBPUS for this week. Currently, there is a possibility of remaining the value at 1%. If the current value beats the expectation, we may see a bullish pressure in the GBPUSD price. However, the final decent move is expected after the NFP.
In Norway, inflation is moving down since autumn. Therefore, Krone is facing pressure from the imported inflation and lower wage growth. It is an indication of the increase in inflation would hamper the Krone.
On the other hand, the retail sales and commodity price’s strength and the bottlenecks in the value chain parts result in higher inflation than the expectation.
Therefore, Norges Bank focuses on a balanced approach to downward the pressure where the core inflation target is set at 2.7%, unchanged from the previous value.
The retail sales were downward at the end of 2020. Later on, the new year began that made investors cautious. However, the recent consumption service restriction may indicate a moderate increase in retail sales in February to at least 0.7%, MoM.
Overall, the uncertainty of inflation in Norway vs. a strong economy in the US may provide a stronger move in the coming day. In that case, investors should focus on how the Non-Farm Payroll releases this week.
According to a prominent Cryptocurrency analyst, Bitcoin may be entering the second half stage of the bullish market.
The analysts said that Bitcoin has been picking up in wealth transfers from long-term holders to new speculative. The new participants on the market are a clear sign that Bitcoin has more room for user utilization.
Moreover, there is an indication that the long-term Bitcoin holders reactivated 9% of the supply by spending coins. Back in 2017, the reactivation of coins was at 17% before the market crash.
Currently, any indication of market uncertainty would be a good buying opportunity for Bitcoin.
Some ETH mines planned to move the has rated for 51 hours to protest the EIP-1559, a protocol that starts a fee burn “ETH Buyback” to affect the revenue miners.
The ability to concomitant such a decision may raise a question about the decentralized nature of Ethereum. Some cryptocurrency analysts predict that there might be another way to reduce the transaction fee that may support transaction batching.
The decision is still pending whether the EIP-3074 would be finalized or not. The community is still active on this matter that may significantly impact its stability of the network.
The strong bullish possibility in Ethereum may come from its strong users’ interest. Moreover, the current stimulus program may inject some money into the crypt market where ETH remained at one of the top cryptocurrencies.
Litecoin moved below the psychological $200 level before bouncing from the $190 level overnight.
The world’s ninth-largest cryptocurrency value moved down with the increase in the DeFi sector. However, the bullish sentiment in the higher timeframe may provide an alarming sign to short-term traders.
The price moved to the higher level of $249 in February but failed to sustain and moved below the $229 resistance. The trading volume is decreasing since the price was at a recent high, indicating the taper off of bullish pressure for more than 150%
However, the recent days’ volatility was retracing, and any sign of an increase in the volume may provide a bullish indication in the price.
Boeing 737 Max order moved higher from Ryanair, United Airlines, and Alaskan Airline. According to Boeing, there are almost 130 orders with a value of $13 billion. Moreover, the recent deal with 777 parents indicated further demand for Boeing 737 Max Jets and aircraft.
The earning per share showed no growth over the last 3 years. However, in Q4, there was a loss of $15.25 a share, down to the expectation of $1.78 a share.
However, Boeing has a strong cash flow balance that may show some indication about the loss mitigation. Moreover, if the cash flow remained positive throughout 2022, there is a possibility of a strong bullish gain in the stock. Until now, the recent weaker than expected result might extend the bearish correction in the Boeing Stock.
Google stock starts to moving higher after the expansion in digital advertising that may increase the economy. Moreover, the YouTube and Internet search advertising revenue showed some growth, which is an indication of the future stock growth.
In the 4th Quarter of 2020, Google earnings beat the previous result by 40% at $22.30 a share with $3.05 billion in equity.
The Gross revenue was at $56.9 billion, 23% higher than the expectation of $52.8 billion. Moreover, the cloud computing revenue was 47% higher than the expectation of $3.8 billion.
Overall, the mixed sentiment may extend the current correction of the Google stock for this week.
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.
Overall, We may see a corrective movement this week in most of the major currency pairs. However, any sign of the better-than-expected Non-Farm Payroll result may make the US Dollar stronger against other currencies.
What do you expect from the Non-Farm Payroll? Let us know in the comments section below.