last week’s recap
The Dollars performance was mixed against the major currencies last week. The key event was the two day speech to the congress by the new Federal Reserve Chairman Ben Bernanke. Key data releases included net security purchases figures with expectations centered on $
The week ahead
The coming week’s theme will continue to be one of inflation watch for both the US and the Eurozone. In the US, the market is looking for an up-tick in inflation for January. However, the annual rate of core inflation should remain stable. In the Eurozone, inflationary pressure along with growing evidence of an upturn in economic activity should confirm a rate hike in March.
In the States an up-tick in US consumer price inflation (Wednesday) in January is expected, boosted by a likely increase in the energy component. The Chicago Fed National Activity Index (Thursday) is likely to have risen for January. After three months of solid gains, durable goods (Friday) orders are expected to have declined. This is partly due to a moderation in aircraft orders. We will provide our previews of these data releases in the daily summary.
In the Eurozone one of the most striking trends in the recent Eurozone business surveys has been the relative out performance of Germany. The IFO business climate index (Thursday) has recently surged to its highest level in almost six years. In February the IFO survey is likely to correct lower. The market will be keen to see if the Belgian leading indicator (Wednesday) can rebound from its fall in January. Italian business confidence (Friday) is forecast to be little changed while Italian consumer price inflation (Wednesday) is forecast to have edged higher. In the UK the key focus will be the release of the most recent minutes from the Bank of England monetary policy meeting (Wednesday). We will provide our previews and reviews of these data releases in the daily summary.
In Japan the only pieces of data for the market to focus on will be on Thursday with the release of Tertiary/All industry indices and the merchandise trade balance. We will provide our previews and reviews of these data releases in the daily summary.
Key Weekly Pivot levels
- Euro 1.1920
Initial support at 1.1848 (Feb 16 low) followed by 1.1800 (76.4% retracement of 1.1638 to 1.2324). Initial resistance is now located at 1.1976 (Feb 20 high) followed by 1.2027 (Feb 10 high).
- Yen 118.60
Initial support is located at 118.24 (Feb 21 low) followed by 117.32 (Feb 17 low). Initial resistance is now at 119.01 (Feb 21 high) followed by 119.41(Feb 3 high).
- Pound – 1.7450
Initial support at 1.7306 (Feb 16 low) followed by 1.7278 (Feb 14 low). Initial resistance is now at 1.7491 (Feb 15 high) followed by 1.7577 (Feb 10 high).
- Aussie – 0.7385
Initial support at 0.7347 (Feb 17 low) followed by 0.7317 (76.4% retracement of the 0.7233 to 0.7577 climb). Initial resistance at 0.7444 (Feb 15 high) followed by 0.7501 (Feb 6 high).
