Will the Greenback Continue its Recent Strong Showing?

The greenback had a positive week as inflation data and other market moving events took place. It started the week reaching new highs only to retreat later on. What is next for this currency? This week, the US retail sales, housing data, and a couple of GDP figures will be released.

Although the USD has been trading, our Forex signal team has sent fewer than the usual amount of signals. Why so few Forex trade signals?

Here are the main events of the week.

Monday, May 14: Asian Session Recap, EUR and GBP Gain on Quiet Trading Day

JPY

The Japanese Yen took some hits at the Asian trading session this morning due to an increase in risk-taking.

GBP/JPY went up to trade at 148.37, EUR/JPY also went up to 130.82, and AUD/JPY rose to 82.62

EUR and GBP

These European currencies recorded some gains earlier this morning with no specific catalyst responsible for their growth even though analysts point to the optimistic week ahead with scheduled economic reports and speeches from ECB officials.

GBP/USD was up to trade at 1.3567, GBP/CAD also rose to 1.7342, and GBP/CHF was up to trade at 1.3557

EUR/USD went up by roughly 0.2% to 1.1962, EUR/NZD rose to 1.7173, and EUR/CHF also went up by 0.1% pips to trade at 1.1954

Forex Outlook of the Week

German GDP: Tuesday, 6:00.

The growth of the Euro-zone slumped to 0.4% q/q in Q1 against 0.6% in Q4 2017 but this figure doesn’t include that of its largest economy. Despite that, it is expected that Germany’s growth level will drop from its current 0.6% to 0.4% for the first quarter of the year.

UK jobs report: Tuesday, 8:30.

Job reports recently in the UK have been rather disappointing on several fronts. Jobless claims in the region went up by 11.6K for March which is worse than expected. Even though unemployment dipped to 4.2% in February, wages still stands at 2.8% even though it was expected to rise to 3%. For March, wages growth are expected to dip further to 2.7% while jobless claims are expected to rise to 13.3K for April. The unemployment rate is expected to remain unchanged at 4.2%.

US Retail Sales: Tuesday, 12:30.

The headline retail sales for March came out better than expected after going up by 0.6% while core sales went up by just 0.2%. The report for April will play a role in shaping the expectations for the second quarter growth. Headline sales are expected to rise by 0.4% for April while core retail sales will rise by 0.5%.

Japanese GDP: Tuesday, 23:50.

Even though figures here do not move markets but it gives traders an overview of the whole economy. As the third-largest economy in the world, Japan’s economy rose by .4% q/q in the last quarter of 2017 according to the final release. For the preliminary read of the first quarter of the year, GDP growth is expected to be flat at 0%.

US Housing data: Wednesday, 12:30.

In March, the US Building Permits was 1.35 million annualized units while the housing starts stood at 1.32 million. If the April report is to have a huge impact on the market, then the two indicators will need to move in the same direction i.e. they should all beat expectations or they should disappoint. For April, building permits are expected to stay at 1.35 million while housing starts should rise to 1.33 million annualized units.

Australian jobs report: Thursday, 1:30.

The job report for March was a disappointment after it went up by just 4.9K. The unemployment rate remained at 5.5%. For April, job growth is expected to rise to 20.3K while the unemployment rate is set to remain unchanged at 5.5%.