Weekly Forex fundamental expectations: How FED can impact USD

April 9, 2019, | AtoZ MarketsThe weekly Forex fundamental expectations is dominated by the FOMC minute, which will be held this week along with the CPI where any dovish Statement or patience from FED would weaken the USD.

The US economy was solid in the Q1 of 2019 with moderate job growth and wage growth which is indicating that there might be a correction in coming days. The recent inversion of the US yield curve also developed worries that the next recession could be sooner as per many forecasts. 

Although the NFP became better than expected result of 198K there were some mixed data of ISM Manufacturing and Non-manufacturing PMI along with Retail Sales. 

Brexit surges market volatily 

The first pair to look at in the Weekly forex fundamental Expectation is EURUSD which was playing a range bound from the last week due to some less than expected result of EUR & USD. Moreover, the tension of BREXIT is also pushing the market to be volatile. The recent growth in employment was very satisfactory for Eurozone which may lead to a solid position of EURO against all other currencies. But the main focus point for the investors would be the monetary policy statement and German Harmonized Index which are going to be published this week.

The EURUSD pair is moving with a corrective volatile structure from the beginning of the year where the near term psychological and event zone is 1.25- 1.20 area. A daily close above 1.25 is essential for further growth to 1.50. On the other hand, a dovish ECB can drive the pair to 1.10 area.

Bank of Japan plans to change CPI

The BOJ governor Kurodas speech is going to be published this Week where a dovish statement is expected as the Japanese economy is looking for a moderate improvement. The BOJ has a plan to change in the CPI on to increase gradually toward 2% to achieve the target along with them. Moreover, the slowdown in the global economic activity is also affecting the Japanese exports and productions that need some more time to solve out. Industry Activity of Japan has been decreased to -0.2% where the expectation was 0.2% when the unemployment rate has been decreased to 2.3.

In the Last Week, The Tanken large industry Capex has come 1.2% where previous data was 14.3%. In this week market sentiment of the USDJPY will be bullish due to the recent fundamental data until any surprise from the BOJ.  From the technical perspective, the important event level to face is 112.00 which needs to breach with a daily close for further upward.

Chinese CPI to go live soon

In the Asian Market, the Chinese CPI is going to be published this week where the expectation is an increase of 2.3% from the previous data of 1.5%. The better than expected result would be positive for USDCNY for sell and AUDUSD for Buy.

China CPI

Solid bearish pressure on Pound due to Brexit 

The deadline for the UK to pass a deal to leave the European Union will expire this week, as the two-year period from invoking Article 50. The GBPUSD is expected to be volatile this week due to BREXIT Deadline. The uncertainty will hold the investors for taking further decisions but if the UK goes through a No Deal BREXIT there will be solid bearish pressure in GBPUSD.

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