For the upcoming week, expect the Euro to plummet in its currency valuation and against the basket of currencies, as concerns about the euro zone debt problems. Investors are concerned about the euro zone periphery countries ability to borrow money after the Spanish bond yields jumped following a poor debt auction. This Spanish bond yields will affect the valuation of the euro for the coming week, as most of the periphery countries all show pessimism in their respective fiscal targets, particularly Spain. The Euro dropped against the US dollar to 1.3035 from 1.3164, a 1% decline. Versus the Swiss franc, the single currency slid to 1.1997 from 1.2040 after better than expected Swiss inflation March figures. The Swiss National Bank said that it remains ready to intervene in the markets in order to defend the 1.20 exchange floor but the central bank’s credibility may be questioned.
Today, conditions in the market are relatively thin as today it is the Good Friday Easter holiday. The NFP report is a crucial indicator for the health of the world’s largest economy as it reveals the number of jobs added or lost in the US economy, excluding the farming industry. Investors are expecting 203,000 new employed people during March and the unemployment rate to remain unchanged at 8.3%. While, the British Pound dropped to 1.5805 to 1.5805 from 1.5908 against a stronger US dollar but today it recovered its losses to trade at 1.5866. The Bank of England kept interest rates and its asset purchasing program unchanged as expected and no statement was released. Eyes will turn to the minutes due to be released on April 18. While, oil prices jumped to 103.36 dollars a barrel from 101.34. Gold edged higher to 1633.10 dollars an ounce from 1619.97. Against the euro, gold climbed to 1248.48 from 1233.19 an ounce. Silver rose to 31.79 dollar an ounce from 31.19.
Tuesday, the French Industrial Production is projected to see a slight drop of 0.2% from its previous 0.3%, indicating that the French industrial sector is in a slowdown. Adding, to its decline is the Sentix Investor Confidence, anticipating a negative figure of -6.6 points from its previous high of -8.2 points suggesting that confidence wanes as the debt crisis lingers on.
Thursday, the European Industrial Production expects pessimism in its figure of -0.2% from its previous high of 0.3%, suggesting that its March reading shows strength in its figure. UK’s Trade Balance is showing a slight rise of -7.5 Billion euro in its projection, indicating a rise in its exports from the coming week.
Friday, the British PPI input anticipates optimism in its upcoming figure of 1.5% from its previous high of 2.1%, indicating that consumer inflation is in stable condition for the coming week.
European Technical Analysis Weekly april 9-13 2012
For the coming week, expect the EURUSD pair to remain on the bearish side for the coming week as 1.3003 support line still holds. A break will resume the whole decline from 1.3486 and should target the 100% projection of 1.3486 to 1.3003 from 1.3385 at 1.2902 next week. This minor support lines are the next targets for the pair in order to fulfill its bearish trend for the next week. More importantly, this will revive the case that the whole rebound from 1.2625 is finished at 1.3486 and the larger decline from 1.4939 is still in progress. For the long term picture, expect the pair to move from 1.6039 as price action is treated as a long consolidation pattern and there is no clear indication of completion yet. That is, price actions could remain corrective and relatively unpredictable. The current development suggests that the falling leg from 1.4939 is not yet finished and the break of 1.2625 should pave the way to 1.1875 low. Thus, expect that prices will further decline for the coming week, as its bearish trend is not yet completed.
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