Your weekly fundamental view 2016.03.07

März 07, 2016 09:18

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Need to know

A quiet week for US data, but we have Eurozone Q4 2015 GDP and the March ECB interest rate meeting to keep us busy.

Coming up

On Tuesday 8 March we have Eurozone Q4 2015 GDP.GDP in the Eurozone has been in low single digits (QoQ) since November 2014.The ECB will hope it stays that way.Anything below +0.3% will disappoint. Why should traders care? GDP measures economic growth a key input when comparing economies and their currencies. Watch EUR/USD support 1.864: resistance 1.1026

Thursday 10 March sees China CPI and PPI for February released. The Producer Price Index is a measure of factory gate inflation, whilst CPI tracks consumer prices. PPI may have bottomed at -5.3% (YoY) in Jan.CPI has had two consecutive reads of +0.5% (MoM); can it make a third? Why should traders care? These inflation measures can shed light on levels of demand within China's slowing economy. Watch the HSI 50 support 19715: resistance 20415

The ECB council meets to decide on interest rates and QE on Thursday 10 March.This much anticipated meeting could see the ECB lower rates further and enlarge their QE program, in an attempt to stimulate the Eurozone economy. Why should traders care? The ECB has so far failed to lift the Eurozone economy out of the doldrums. They may now have to take more drastic action to do so. Watch the Bund support 164.00: resistance 165.86

Chart to watch: USD JPY Weekly

Yen strength has persisted in 2016 despite Bank of Japan moving to negative rates and Dollar Yen is trading well below its long-term uptrend line. Watch support at 110.97/109.87, through which a bigger fall is possible. Alternatively, watch resistance at 115.62, in the event of Yen weakness re-emerging.