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The Canadian dollar showed some movement during the week, but ended the week unchanged. USD/CAD closed the week at 1.3347. This week's key event is GDP. Here is an outlook on the major market- movers and an updated technical analysis for USD/CAD.

In the US, Fed Chair Yellen missed the chance to boost the US dollar, as she sent out a dovish message after the rate hike. Unemployment Claims were unexpectedly weak, soaring to 261 thousand. Canada's Core Retail Sales jumped 1.7%, above expectations. However, CPI softened to 0.2%, matching the forecast.

Updates:

• Mar 27, 12:35: Murky markets and further Fed fallout - MM #139: The Ides of March continue echoing and echoing. We discuss further fallouts from the Fed and move to on markets,...
• Mar 27, 11:42: EURUSD, USDCAD and XAUUSD TA - March 27 2017: EURUSD intra-day analysis EURUSD (1.0845): EURUSD gapped higher on the open today above the resistance level of 1.0800. On...
• Mar 27, 0:17: The week ahead: Quarter ends with GDP reads and last-minute adjustments [Video]: The last week of March features the normal end-of-quarter adjustments. Which currencies will come out on top? The time-shift in...

USD/CAD daily graph with support and resistance lines on it.

BoC Governor Stephen Poloz Speech: Tuesday, 14:10. Poloz will deliver remarks at an event in Oshawa. The markets will be looking for clues regarding the central bank's future monetary policy.

RMPI: Thursday, 12:30. This index gauges inflation in the manufacturing sector. In January, the indicator softened to 1.7%, above expectations. In December, the index recorded a sharp gain of 6.5%.

GDP: Friday, 12:30. GDP is released on a monthly basis, In December, the economy expanded 0.3%, matching the forecast. The estimate for the January report remains at 0.3%.

USD/CAD Technical Analysis

USD/CAD opened the week at 1.3334 and dropped to a low of 1.3260, as support held firm at 1.3212. The pair then reversed directions and climbed to a high of 1.3409. USD/CAD closed the week at 1.3347.

Technical lines, from top to bottom

1.3782 has held in resistance since the start of February.

1.3648 was an important support level in February.

1.3551 is the next line of resistance.

1.3457 was a high point in September 2015.

1.3351 was tested in resistance and remains a weak line.

1.3212 is providing support. It was a cap in the second quarter of 2016.

1.3124 is the next support level.

1.3003 is protecting the symbolic 1.30 level.

1.2908 is the final support level for now.

I am bullish on USD/CAD

In the US, the Fed has sent clear signals that it is projecting two more rate hikes this year, disappointing the markets. President Trump failed to pass a key health care bill last week and remains embroiled in scandals, which could lessen risk appetite and hurt the Canadian dollar.

Monday March 27: Five things the markets are talking about

Investors are questioning Trump's reflation trade now that the U.S healthcare reform bill failed to make it onto the 'floor' Friday.

Heightened political risk has the market worried that the GOP's failure to get Friday's bill across the finish line will inhibit other pro-business reform agenda items from the White House, namely tax reform and fiscal spending measures.

Risk aversion has the dollar printing four-month lows outright, global equities and yields extending Friday's slide and the go-to safe haven asset, gold, rallying more that $17 overnight.

Will this rift between Trump and GOP congressional leadership still widen? There is a very good chance of this happening making Trump a 'lame duck' in his first 100 days in the White house.

Note: Trump has promised to lower individual middle class taxes, while House leaders view tax reform as a catalyst for growth and could prioritize tax cuts for the top +1%.

Elsewhere, it's a heavy week on the data front. Japan releases its key monthly statistics for February including retail sales and household spending, unemployment, consumer prices and industrial production.

France and Germany post consumer-spending data. Both the U.K and U.S report final estimates of Q4 GDP, while U.K's PM Theresa May is expected to formally begin divorce proceedings and trigger Article 50 to begin two-years of negotiations on her country's exit from the E.U.

1. Global stocks stumble on U.S policy woes

Trump's failure on healthcare reform is raising questions about his ability to push through tax cuts and fiscal spending to boost the U.S economy.

In Japan, the Nikkei's share average fell -1.4% overnight, trading atop its six-week low, adding to last week's -1.3% loss, on pressure from a resurgent yen (¥111.19). The broader Topix was down -1.3%.

In Hong-Kong, China developers have dragged down HK shares after fresh property curbs, offsetting data showing strong profit growth for industrial companies early in the year. The Hang Seng index fell -0.7%, while the China Enterprises Index lost -1.1%.

In China, stocks slipped as tightening worries have offset strong industrial profits. The blue-chip CSI300 index fell -0.3%, while the Shanghai Composite Index shed -0.1%.

In Europe, equity indices are trading sharply lower. Banking stocks see red on the Eurostoxx, while commodity and mining stocks trading notably lower on the FTSE 100.

U.S stocks futures are to open deep in the red (-0.9%).

Indices: Stoxx50 -0.5% at 3,426, FTSE -0.8% at 7,280, DAX -0.8% at 11,967, CAC-40 -0.5% at 4,996, IBEX-35 -0.6% at 10,246, FTSE MIB -0.8% at 20,024, SMI -0.6 % at 8,561, S&P 500 Futures -0.9%

2. Liquid gold prices falter, hard gold prices rally

Oil prices start the week on the back foot, pressured by uncertainty over whether an OPEC-led production cut will be extended beyond June in an effort to counter the global glut of crude.

On the weekend, an OPEC and non-OPEC Joint Compliance Committee agreed to review whether oil output cuts should be extended by six-months. They stopped short of an earlier draft statement that said the committee recommended keeping the Nov. measure in place.

Also providing price pressures is the weekly Baker Hughes U.S Rig Count: 809 vs. 789, w/w (+2.5%) – the tenth consecutive weekly rise and the largest weekly increase since Jan.

Brent crude futures are down -19c at +$50.61, while West Texas Intermediate (WTI) is down -31c at +$47.66.

Gold has rallied more than +1% overnight, touching a one-month peak as the dollar plunges and stocks fall as POTUS suffered another setback, raising doubts about his ability to steer his economic agenda.

Spot gold has rallied to +$1,258 per ounce after hitting +$1,259.14, its highest since Feb. 27.

3. Global yields fall on questionable Trump

Borrowing costs across the globe have fallen sharply overnight, as investors question Trump's ability to push through tax cuts and fiscal spending to boost the U.S economy.

Bond yields in Germany (10-year Bunds +0.36%) and France (10-year OATS +0.93%) have fallen to their lowest levels in around three-weeks, while other single currency bloc yields tumbled -6 bps as U.S 10-year Treasury yields hit a one-month low (+2.35%).

Note: Since Nov. U.S election, expectations that a large fiscal stimulus from Trump's administration would help push up economic growth and inflation had boosted risk assets and dented safe-haven bonds in the U.S and Europe.

Elsewhere, Spanish yields fell to a one-month low at +1.64%, while Portugal's fell to more than two-month lows at +3.79%. Down-under, the yield on 10-year Aussie bonds slid -4 bps to +2.71%.

4. Fear of Trumponomics hammers dollar

The "mighty" dollar remains on the back foot against its G10 peers due to rising doubts about Trumponomics.

In overnight trade, the EUR/USD has gained +0.7% to a five-month high €1.0875. Also helping the 'single' unit Euro was Chancellor Merkel's CDU weekend victory in a local election in the German state of Saarland. Also providing support was Germany's IFO survey (see below) for March printing a seven-year high.

Note: The election weakened hopes that the SPD and its new leader Schulz would be aiming for easy victories in the upcoming state elections of North-Rhine Westphalia and Schleswig Holstein ahead of the German General Election in September.

Elsewhere, the pound has jumped +0.8% to its highest print in nearly two- months at £1.2581. USD/JPY has also dropped more than -1% to a four-month low ¥110.14. "

Expect North America to play catch up, especially now that long dollar' trades are currently seen unwinding in both the Asia and the European session.

5. Germany's Mar IFO Business Climate near 7-year highs

Data in Germany this morning indicates that business morale is high, which suggests that company executives in Europe's largest economy are brushing off concerns about the threat of rising protectionism and Germany's own election issues.

Ifo business climate index rose to 112.3 from an upwardly revised reading of 111.1 in Feb. The rise was driven by improved sentiment in manufacturing, construction and retailing, while the business climate in wholesaling deteriorated.

Note: Today's release follows Friday's PMI print that showed Germany's private sector growing at the fastest pace in nearly six-years this month, driven mainly by strong demand for manufactured goods from the U.S, China, U.K, and the Middle East.

USD/CHF - 0.9850

Original strategy :

Sell at 0.9910, Target: 0.9800, Stop: 0.9945

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9910, Target: 0.9800, Stop: 0.9945

Position : -

Target :  -

Stop : -

The greenback only recovered to 0.9960 on Friday before meeting renewed selling interest and the subsequent selloff below previous support at 0.9861 adds credence to our bearish view that recent decline is still in progress and may extend weakness to 0.9820-25, then 0.9800, however, loss of downward momentum should prevent sharp fall below 0.9770-75 (100% projection of 1.0171-0.9942 measuring from 1.0003), bring rebound later.

In view of this, would not chase this fall here and we are looking to sell dollar on subsequent rebound as 0.9900-10 should limit upside. Only above said resistance at 0.9960 would abort and signal low is formed, bring retracement of recent decline towards indicated previous resistance at 1.0003.

GBP/USD - 1.2590

Original strategy :

Buy at 1.2490, Target: 1.2600, Stop: 1.2455

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2490, Target: 1.2600, Stop: 1.2455

Position : -

Target :  -

Stop : -

As cable has surged again today, adding credence to our bullish view that recent upmove from 1.2109 is still in progress and upside bias remains for this move to extend further gain to 1.2600, then towards 1.2635-40, however, loss of upward momentum should prevent sharp move beyond 1.2670-80 and price should falter below previous resistance at 1.2706, risk from there is seen for a retreat later.

In view of this, would not chase this rise here and would be prudent to buy cable on subsequent retreat. Only below support at 1.2469 (Friday’s low) would abort and signal top is formed, bring retracement of recent upmove towards previous support at 1.2424 which is likely to hold from here.

EUR/USD - 1.0867

Original strategy  :

Buy at 1.0800, Target: 1.0900, Stop: 1.0765

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0800, Target: 1.0900, Stop: 1.0765

Position : -

Target :  -

Stop : -

The single currency also opened higher today on dollar’s broad-based weakness and the the subsequent rally signals recent upmove is still in progress, hence bullishness remains for further gain to 1.0900 and possibly 1.0930-35 (61.8% Fibonacci retracement of 1.1300-1.0340), however, loss of near term upward momentum should prevent sharp move beyond 1.0955-60 and price should falter below 1.0990-00, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 1.0800-10 should limit downside. Only below support at 1.0760 would abort and signal top is formed, bring retracement of recent upmove to 1.0730 but 1.0719 support should remain intact. 

USD/JPY - 110.26

Original strategy  :

Sell at 111.00, Target: 110.00, Stop: 111.35

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 111.00, Target: 110.00, Stop: 111.35

Position :  -

Target :  -

Stop : -

The greenback opened lower earlier today and has dropped again, adding credence to our bearish view that recent selloff is still in progress and may extend weakness to 110.00, however, loss of downward momentum should prevent sharp fall below 109.70-75 and reckon 109.50 would hold from here, risk from there has increased for a rebound to take place later.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 111.00 should limit upside. Above 111.30-35 would risk test of resistance at 111.48 but break there is needed to signal low is formed instead, bring retracement of recent decline to 111.75-80 first.

EUR/JPY - 119.91

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Although the single currency retreated after meeting resistance at 120.28, break of last week’s low at 119.32 is needed to signal the fall from 122.89 top is still in progress and may extend weakness to 119.00, then 118.67 support but loss of momentum should prevent sharp fall below latter level and price should stay well above previous chart support at 118.25, risk from there is seen for a rebound later.

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. If said support at 119.32 continues to hold, then further consolidation would take place and another bounce to 120.28 cannot be ruled out, above there would bring retracement of recent decline to 120.60-70, then 121.15-20. Only break of said resistance at 121.84 would revive bullishness and suggest low is formed instead, bring test of indicated resistance at 122.26 first.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

AUD/USD – 0.7632

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term up

Original strategy :

Bought at 0.7645, Target: 0.7800, Stop: 0.7585

Position: - Long at 0.7645
Target:  - 0.7800
Stop: - 0.7585

New strategy :

Hold long entered at 0.7645, Target: 0.7800, Stop: 0.7585

Position: - Long at 0.7645
Target:  - 0.7800
Stop:- 0.7585

Although aussie has trade defensively after last week’s sharp retreat from 0.7750 (last week’s high) and marginal weakness from here cannot be ruled out, reckon downside would be limited and as long as 0.7592 (previous resistance) holds, mild upside bias remains for another rise, above said resistance would extend gain to 0.7778 (last year’s high), however, break there is needed to retain bullishness and extend headway to 0.7840-50 but price should falter below 0.7900.

In view of this, we are holding on to our long position entered at 0.7645. Only below previous resistance at 0.7592 would abort and signal top is formed instead, then further choppy trading would take place and risk is seen for pullback to 0.7530-40 but indicated support at 0.7491 should remain intact.

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

The EUR/JPY has broken a 4h trend line and currently it is supported by W L3 pivot. If the prices retraces to POC zone (EMA 89, W H3, 50.0, inner trend line, ATR high) 120.60-85 we might see a rejection towards 119.90 and 119.25. If there is no retracement to the upside, than traders should pay attention to 4h close below 119.20 for further continuation down to 118.75.

Quick Summary:

W H3 - Weekly H3 Camarilla (Weekly resistance)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

W L3 - Weekly L3 Camarilla (Weekly support)

EURUSD

The EURUSD continued its bullish momentum last week topped at 1.0824 and hit 1.0849 earlier today in Asian session. Price is still in a bullish phase, moving convincingly above the H1 EMA 200 and a trend line support as you can see on my H1 chart below. The bias is bullish in nearest term testing 1.0870 key resistance which is a good place to sell with a tight stop loss. Immediate support is seen around 1.0795. A clear break below that area could lead price to neutral zone in nearest term testing 1.0750 area where H1 EMA 200 and the trend line support converge which is a good place to buy with a tight stop loss as a clear break below that area (especially if that happen after a rejection above 1.0870 ) would be a serious threat to the current short term bullish bias. On the upside, a clear break and daily close above 1.0870 could quickly target 1.1000 this week.

GBPUSD

The GBPUSD continued its bullish momentum last week topped at 1.2531. Price is still moving convincingly above the H1 EMA 200 as you can see on my H1 chart below suggests a valid short-term bullish trend. The bias remains bullish in nearest term testing 1.2570 – 1.2600 region. Immediate support is seen around 1.2460. A clear break below that area could lead price to neutral zone in nearest term testing 1.2400 support area. On the upside, a clear break and daily close above 1.2570 – 1.2600 would expose 1.2770 region this week. Overall I remain neutral.

USDJPY

The USDJPY continued its bearish momentum last week slipped below 111.30 and daily EMA 200 key support as you can see on my daily chart below suggests a bearish outlook and hit 110.25 earlier today in Asian session. The bias remains bearish in nearest term testing 109.80. Immediate resistance is seen around 110.80. A clear break above that area could lead price to neutral zone in nearest term testing 111.30 which is a good place to sell with a tight stop loss. On the downside, a clear break and daily close below 109.80 would expose 108.50/00 region. I am bearish on this pair.

USDCHF

The USDCHF continued its bearish momentum last week bottomed at 0.9881 and hit 0.9875 as a part of the bearish scenario after fell below the bullish channel as you can see on my H4 chart below. The bias is bearish in nearest term testing 0.9800. Immediate resistance is seen around 0.9930. A clear break above that area could lead price to neutral zone in nearest term testing 1.0000 area. Overall I remain neutral.