Your weekly fundamental view 2016.03.14

März 14, 2016 09:28

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Need to know

The Federal Reserve interest rate decision is the key item in a data packed week.

Coming up

On Tuesday 15 March we have The Bank of Japan's monthly interest rate decision. Negative interest rates in Japan have failed to weaken the Yen as the economy continues to falter. The BOJ meets to decide whether to move interest rates lower once more. Why should traders care? BOJ may have lost control of the Yen, one half of one of the world's most actively traded instruments. Can the BOJ regain the initiative? Watch USD/JPY support 110.95: resistance 11510

Wednesday 16 March sees the US FOMC interest rate decision. The US central bank announces its decision on interest rates for March. Expectations are for no change. But better recent economic data may change the tone of the accompanying statement. Why should traders care? The US has raised rates at a time when other major economies are on hold or are still cutting. Further rate rises,real or suggested, could upset the recent rebound in global markets. Watch EUR USD support 1.1057: resistance 1.1211

Eurozone CPI for February is released on Thursday 17 March. This broad measure of inflation fell into negative territory on both it's monthly and annual figures for January. The ECB is keen to see inflation reach +2% so positive reads today are crucial. Why should traders care? Falling inflation or deflation undermines economic growth. Once it's embedded it's very hard to shift. Watch the Bund support 164.64: resistance 166.15

Chart to watch: AUD NZD Weekly

The surprise cut in interest rates by the Reserve Bank of New Zealand last week has bought the antipodean pair back into focus. Well supported circa 1.0523 at the end of 2015. We are now testing back towards resistance at 1.1307 that was last tested in the summer last year and through which a retest to 1.1603 cannot be discounted.