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In this week’s market outlook, our focus will shift towards some seasonal patterns as central bank news is light with only the Bank of Japan set to announce their monetary policy. Brexit news will dominate the headlines this week with multiple votes in Parliament to go ahead on PM Mays current plan. The GBP could be in for a negative week as GDP, Manufacturing Production and Core CPI data is set to be released early in the week. A large majority of the GBP pairs are sitting at key resistance levels adding to the potential bearish sentiment.
In other news Federal Reserve Chairman Powell made a speech on Saturday outlining the Fed will continue to monitor inflation closely and the plan for hiking rates further is well and truly on hold for the time being. This sentiment now given out from the Chairman suggests we could see some USD weakness creep back into the market. The US Core CPI data will be closely watched with the data being forecast to hold at 0.2%. Any decline here will have a negative effect on the USD and will support the Federal Reserve’s decision to hold plans to hike rates further.
Seasonally the Australian Dollar and New Zealand Dollar outperform other currencies through March. April also sees these currencies outperform the USD and with price stuck at key supply and demand zones for the majority of the USD pairs we could expect the seasonal pattern to play out.
AUDUSD is currently finding support at the key demand zone and if we are to see USD weakness creep back into the market, we could look for long opportunities back to the key weekly trendline resistance.
NZDUSD also found support at the 0.6760 demand zone, the 4hr chart has changed cycle by forming a higher high. We will be looking for long opportunities to continue this week on retracements back into the minor support highs.
GBPAUD is on our watchlist this week as price rejected the key supply zone around 1.8000. Price action suggests we could see price fall lower back towards the demand zone of 1.7200. We will be watching retracements on the lower timeframe for downside to continue.
EURUSD broke out of the range last week with the ECB continuing its dovish tone. The weekly chart closed back within the demand zone and with the potential for USD weakness we could expect EURUSD to re-test the key 1.1300 resistance level.