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The European markets will be in focus this week in terms of data releases. GDP data is set to be released this week for the UK with forecasts suggesting growth. This could help continue the current strength we are seeing out of the GBP recently. The European central bank is also set to release their current economic projections with a dovish tone likely to remain. The Euro has weakened significantly recently against most of the major currencies and is likely to continue going into this week.
The strength and weakness table changed drastically from last week with GBP gaining significant ground and the risk on sentiment bringing in sellers to the safe-haven currencies. The Euro, Japanese Yen, and Swiss Franc were the biggest losers of the week with the Pound and Canadian dollar being the biggest winners.
The USD Index rejected the $99.00 highs and closed back within the weekly channel. The last few times we have seen a significant bearish candle it has been followed by a bullish week. However, seasonal patterns suggest this could be the top for the USD and if price this week breaks the current candle lows selling momentum should continue.
AUDUSD broke out of the wedge pattern from the key lows highlighting the risk-on sentiment in the market currently. Now the price has formed a bullish breakout candle we could see price continue to head towards the longer-term weekly trendline resistance.
NZDUSD formed a bullish engulfing candle short of the key demand zone due to the USD weakness. The commitment of trader reports showed an increase in long positions for the New Zealand dollar and with the USD weakening, we could see some upside from these lows going into next week.
USDCAD formed a bearish engulfing candle off the key 1.3300 level, the market price action has been suggesting a fall here for some time and now we have a confirmed close lower the market looks likely to continue down into the lows of 1.3030. The strength and weakness table also adds confluence to this move with the Canadian Dollar gaining significant strength recently.
Brent Crude Oil closed the week bullish and looks likely to break higher if the USD weakens further. A break of the lows at 62.60 and trendline resistance will be added confirmation for oil bulls.
The commitment of trader’s report is showing a further increase in short contracts suggesting Gold prices could continue to move lower. Technically the weekly candle formed a bearish engulfing candle giving a strong indication that sellers have re-entered the market.
The SPx500 continued to work within a weekly channel, the weekly bullish close shows that the stock indexes look likely to continue their move higher back into the all-time highs. A weaker USD would be ideal for the stock markets to continue to move higher.