UoM Consumer Sentiment forecast & Forex analysis


15 April, AtoZForex, London – For the last trading day of the week, the strategy team at Barclays Capital has provided its UoM Consumer Sentiment forecast and technical outlook for four currency pairs. The following is UoM Consumer Sentiment forecast & Forex analysis for EURUSD, USDJPY, GBPUSD, and NZDUSD.

UoM Consumer Sentiment forecast

Barclays forecasts the Empire State manufacturing index to slip to -1.0 in April. Last month’s report contained large increase in new orders and shipments, which was then reflected in positive readings across PMIs and the national ISM readings. “Our forecast of a modest decline in April simply reflects our expectation of some payback from last month’s move,” Barclays added.

UoM Consumer Sentiment forecast Source: Barclays research, data forecasts time in GMT -5 (click to zoom-in)

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Meanwhile, the investment bank foresees the total industrial production to have slipped 0.1% m/m, with a solid 0.3% m/m gain in manufacturing offset by a decline in mining output and further drop in the utilities sector. “Our forecast would leave total IP down 1.4% y/y, but manufacturing production up 1.2% y/y,” Barclays noted.

Lastly, Barclays UoM Consumer Sentiment forecast is to nudge higher to 91.5 in the preliminary April estimate. Mainly due to flattened retail gasoline prices and lower financial market volatility, seen in recent weeks.

Forex analysis

EURUSD: The break below 1.1310, the 21 dma, has prompted Barclays to turn bearish. The initial targets are near 1.1210 and then the 1.1145 range lows. “Beyond there we are looking for a move towards the 1.0820 area,” Barclays added.

In line, both BNP Paribas and BoAML expect the USD to strengthen. But only temporary, seeing EURUSD at 1.16 by mid-year.

USDJPY: Moving on to the Yen, “we prefer to fade corrective upticks towards the 110.00/65 area and look for a move below 107.60 to confirm downside towards our targets near 106.65 and then the 106.10 area,” Barclays projected.

GBPUSD: Wednesday’s bearish engulfing candle formation endorses the team’s bearish outlook for the Cable. The next move is expected lower towards nearby support in the 1.4005 area. “A break below 1.4005 would then open our next targets near 1.3895 and the 1.3835 year to date low,” Barclays added.

NZDUSD: Finishing UoM Consumer Sentiment forecast & Forex analysis with the Kiwi, yesterday’s bearish close has endorsed Wednesday’s Doji candle. Now Barclays is looking for a move lower towards a support in the 0.6760 area. “Below would signal lower towards targets near 0.6670 and then lower towards 0.654,” Barclays finished.

Also see: Will Brexit push BoE to cut rates?

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