Weekly outlook | Markets in recovery mode

Important events this week:

This week will feature important interest rate decisions by the BoJ, FED, SNB as well as the BoE. The data might cause markets to move around sharply. After the recent slide of falling stock prices, we might face a recovery in markets. The general positive risk sentiment might now take over, which could also have an impact on the crypto sector. The Bank of America is expecting that the positive sentiment, however, might just be temporary. Whether the Dollar will continue to weaken might be debated. Technical zones might cause for a rise in the Greenback again.

– CA- Consumer Price Index- Consumer prices from Canada are expected to rise sharply to 0.6% in February. The protective economic measures by the Trump administration might be one of the reasons behind the expected rising momentum. The data might offer fresh upside for the Loonie, should the rise be confirmed. In this case we should look at the EURCAD currency pair. The price has been rising as the daily chart confirms but might be ready for a push to lower levels.

The RSI indicator currently trades in overbought territory and could support the bearish view. The data will be published on Tuesday, 18 March at 13:30 CET.

– US- interest rate decision- Probably the most awaited news release comes from the Federal Reserve Bank from the US. Will the Dollar gear up some steam again? After the recently weakening momentum some upside potential might now be the case. If Jerome Powell will point out that he remans more hawkish in the near future the Greenback could start resuming some upside again. A potentially difficult path as the new policy of the Trump administration rather acts in an inflationary manner. Tariffs furthermore might offer uncertainty and hence harm the economy.

Based on the monthly chart, the EURUSD currency pair reveals, that the price has seemingly found a resistance zone at the 50- moving average area. A break of that zone might offer further upside momentum ahead. Any hints to a rate cut happening soon could offer more upside, which is in line with the general trend. Yet, a retracement to lower levels might be likely and could offer entry opportunities to fresh buy positions at a better price. The rate decision will take place on Wednesday, 19 January at 19:00 CET.

– UK- interest rate decision- Last month the Bank of England had cut interest rates. It is not expected that another rate cut will happen this month, despite the current falling consumer prices. In general, the Pound had been gearing up strength against other currencies so far in March. The trend might not change direction in general as the upside momentum looks solid.

The weekly chart above shows, that the positive sentiment after the break of the 50- moving average might increase. Any setbacks to lower prices could be taken as a fresh buying opportunity. The rate decision will take place on Thursday, 20 January at 13:00 CET.