Major currencies were beaten by the US dollar, which strengthened during the last week until NonFarm payrolls were published on Friday. The main outsider was the British pound. Market participants focused on the macroeconomic statistic in the absence of news on Brexit.
On Monday, the Markit Construction PMI in the UK was published. The index fell below 50 levels to 49.50 while forecast was 50.3. This news negatively affected on the British pound which continued falling against the US dollar since the 28th of February. The pair fell for more than 300 points for this period below 1.30 level.
On Tuesday, there were a lot of fundamental data. RBA published its interest rate decision and kept it at 1.5% level. The Markit service PMI showed strong data in Eurozone as the US one.
On Wednesday, the Canadian dollar was in the spotlight. However, it was the bearish week for the Canadian loonie. The Bank of Canada kept interested rate decision at 1.75%, labour productivity fell to -0.4%, the International Merchandise Trade fell to -$4.59 billion dollars. The USDCAD pair rose to the new high of this year – 1.3466.
By the end of the week, Non-farm payrolls were published in the USA. The actual data was only 20 thousand while the forecast was 180 thousand, at the same time the Unemployment Rate fell to 3.8% (3.9% forecast). On these news buyers of the US dollar fixed profitable positions, which affected the positions of major pairs.
This week will have a lot of important economic news. First of all, the market participants will follow the UK Parliamentary vote on Brexit.
Today, retail sale data will be published in the USA. However, we expect a continuation of the bearish dollar correction against the euro and the British pound currencies.
On Tuesday, Consumer price indices will be published in the USA and we also expect UK Parliamentary vote on Brexit. The GBPUSD is falling for 8 trading days, we expect short rising up to 1.31 level and falling to 1.28 in the middle term.
On Wednesday, Producer price index and Durable goods orders will be published in the United States at 12:30 GMT. We expect a huge hike of volatility in pairs with the US dollar and the rising of the American currency.
On Thursday, a lot of fundamental reports will be published in the USA and Europe. However, we expect that the main movements on major currencies will be in the first half of the week.
As for Friday, the most important publications to be released are Bank of Japan interest rate decision, CPI in Eurozone and Michigan Consumer Sentiment index in the USA. We expect the USDJPY pair to rise in terms of the bullish trend to 113.50
To sum up, here are our targets for:
GBPUSD — buying to 1,31
USDCAD — buying to 1.35
USDJPY — buying to 113.50.