Weekly analysis

The GBP/USD currency pair will continue to fall in the next period, according to our technical and fundamental analysis. This pair fellduring most of the session on Monday, reaching down towards the 1.33 level. The price might reach 1.3265 in the medium term, where is Fibo 0.61 on the daily chart.

The recent UK’s data also suggest that the downtrend will remain intact. The inflation of the UK was below expectations. The Bank of England had put back plans for an increase in interest rates after the weaker than expected performance of the economy in early 2018.

The most important data of this week:

May 23

UK CPI YoY- (+2.5% expectation); ( +2.5% previous)

             MoM (+0.5% expectation); ( +0.1% previous)

US FOMC minutes 

May 24

UK Retail Sales- YoY (+0.4% expectation); (-1.1% previous)

                         MoM (+0.4% expectation); (-0.5% previous)

May 25 

UK GDP- YoY  (+1.2% expectation); (+1.2$ previous)

                  QoQ (+0.1% expectation);  (+0.1% previous)

The AUD/USD currency pair may rise in the short term. According to the daily chart, the price reached EMA 50 and EMA 200. The next level might be 0.76 Fibo (0.7899 price level).
However, there is a highly probability for this pair to enter in a downtrend in the medium and long term, according to our technical and fundamental analysis. In this case, the price might hit 0.50 Fibo (0.7637 level) and 0.38 Fibo (0.7520 level).
The main economic data of this week:
April 17
RBA minutes
US Housing starts MoM (+1268k expectation: +2.6% expectation ); (+1236k previous: -7% previous)
US Industrial Production (+0.4% expectation); (+1.1% previous)
April 19
- Australia Employment Change (+20k expectation); (+17k previous)
Unemployment Rate (5.5% expetaction); (+5.6% previous)

The USD/JPY pair might rise in the next period, according to our technical analysis. The RSI remains in the bullish zone on the daily chart. The price might rise slower above 110.62 (Fibo 0.61). However, the price will continue to fall in the medium-long term, according to the weekly chart.

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The most important data of this week:

May 15
Japan GDP QoQ – (unchaged estimated); ( +0.4% previous)
YoY - (-0.1% estimated); ( +1.6% previous)
May 17
Japan CPI YoY - (+0.7% estimated ); (+1.1% previous)

The S&P 500 is into a large range (between 2500 and 2750) on the daily chart. According to our technical and fundamental analysis, the S&P 500 might rise in the long term, even if it might fall in the next 3 weeks. The increase in equity market volatility preceded the escalation of trade tensions. Following the list of the specific Chinese goods that would be hit with US tariffs and the list of US goods China would target, the S&P 500 posted a reversal pattern in the middle of last week. Some analysts are keen to point out that there are not another $100 bln of US goods imports that China can put a tariff on to match the escalation. There are many other areas in which China can demonstrate its annoyance. Many analysts jump to their selling US Treasuries or depreciating the yuan.
This index managed to finish last week above its 200-day moving average, but it was still around a percentage point lower than when European markets closed. The cuts in the corporate tax schedule are expected to generally lower the effective tax rate as well.

The USD/CHF currency pair will fall in the next period, according to the daily chart. The RSI oscillator (83.26) already shows an overbought market and indicates a future price correction in the short term. However, according to the weekly chart, the pair might continue its uptrend in the long term. A potential target is 1.02, according to our analysis.
The fundamental analysis also indicates the strength of the U.S. dollar. Federal Reserve officials saw an economy growing at a strong pace and inflation moving up as well, justifying continued interest rate increases. On the other hand, there is a low inflation in Switzerland. Consumer prices in Switzerland increased 0.8 percent year-on-year in April of 2018, slightly below market expectations of a 0.9 percent gain.

The most important data of this week for this pair:
May 8
Swiss Unemployment rate (+2.9% expectation); (+2.9% previous)
May 10
US CPI YoY (+2.2% expectation); ( +2.1% previous)

The Gold price may fall in the medium term, according to the daily chart. The price of Gold is into a range at the moment. If the price drops at 76% Fibo ($1316), there is a high probability to fall below EMA 200 ($1298). A potential price target is $1250 in order to form a triangle. The RSI should be considered oversold below 28.
The Federal Reserve could hike rates three times this year as the repatriation tax could lead to internationally-held cash flooding back into the United States. Fed's response to a repatriation of funds could weigh over Gold and strengthen the US dollar.

There could be an increase in deposits within the US onshore banking system, which could boost the money supply and, therefore, induce increased lending. On the other hand, the Federal Reserve could tighten the screws at a faster rate. That could yield a drop in Gold.

The USD/CAD pair might raise in the next period, according to our technical and fundamental analysis. A potential target is 1.3124 (0.61 Fibo) on the daily chart.
The interest rate is critical in determining the economic outlook. In the U.S., the current federal funds rate is 1.75 percent. The Federal Reserve said it will raise rates to 2 percent in 2018, 2.5 percent in 2019 and 3 percent in 2020.

On the other hand, the economy of Canada performed slightly weaker than the bank expected in the first three months of 2018, the Central Bank of Canada said. The bank said weakness in the housing market plus trade uncertainties are weighing on the economy's prospects. However, it expects a boost from increased foreign trade, plus higher wages for Canadians.

The main economic data of this week:
May 1
Canada GDP MoM (+0.3% expectation); ( -0.1% previous)
May 2
FOMC rate decision (+1.75% expectation); ( +1.75% previous)
May 4
US NFP (+194k expectation); (+102k previous)
Unemployment rate (+4% expectation); ( +4.1% previous)

The USD/CAD currency pair will continue to rise in the medium term, according to the weekly chart. The U.S. economic outlook is healthy according to the recent economic data. According to the most recent forecast released at the Federal Open Market Committee meeting on March 20, 2018, U.S. GDP growth will rise to 2.7 percent in 2018, 2.4 percent in 2019, and 2.0 percent in 2020.
This estimate takes into account Trump's economic policies. On the other hand, the NAFTA (North American Free Trade Agreement) renegotiation has Canada increasingly worried about bilateral trade under Trump. Pending U.S. tariffs could suddenly shut down billions of dollars of Canadian exports of products like paper and steel pipe.

The main economic data of this week:
March 28
US GDP QoQ (+2.7% expectation);( +2.5% previously)
March 29
Canada GDP MoM (+0.1% expectation);( +0.1% previously)
YoY (+2.9% expectation);(+3.3% previously)

The EUR/USD pair might rise in the medium term, based on the optimistic European economy data. The EU economy as a whole is enjoying a period of positive momentum as growth spreads across all member states. GDP grew 2.5% last year, with economies of Eastern European countries such as Romania, Poland, and Slovakia doing particularly well. For this year, the economy will also beat expectations by growing 2.1% both in the euro area and the 28 member states.
The main economic data of this week:
April 26
ECB rate decision (0.00% unchanged expectation); (0.00% previous)
April 27
France GDP QoQ (+0.4% expectation); ( +0.7% previous)
YoY (+2.3% expectation); ( +2.5% previous)
Germany Unemployment Change (-15k expectation);( -19k previous)
Unemployment Rate (+5.3% expectation); (+5.3% previous)
US GDP QoQ (+2.0% expectation); (+2.3% previous)

The GBP/USD currency pair might fall in the medium-long term, according to our analysts. A medium-long term target might be 1.36, where is 50% Fibo on the daily chart. Brexit uncertainty is holding back the economic growth of the UK. There is a highly probability, that the Bank of England keep the interest rate unchanged this year. The unemployment rate might increase or remain unchanged. On the other hand, the U.S. Federal Reserve signaled it still planned to raise interest rates twice in 2018.
The main economic data of this week:
March 20
UK CPI MoM (+0.5% expectation); (-0.5% previously)
YoY (+2.8% expectation); (+3.0% previously)
UK Unemployment rate (+4.4% expectation); (+4.4% previously)
UK Employment change ( +84k expectation); (+88k previously)
March 21
FOMC rate decision (+1.75% expectation); (+1.50% previously)
March 22
BOE rate (+0.50%expectation); (+0.50 previously).