Last week, the EUR/USD dropped more than 100 pips. The European currency has been under a lot of pressure since the German ZEW Economic sentiment showed that the strongest EU economy is slowing down. The data from Friday (German Ifo Business Climate), caused the EUR/USD to slide below its support and touch the 1.3612 level – the lowest since February 13th. This week will start with low volatility, as the U.S. market remains closed due to a public holiday. However, traders should keep an eye on the GfK German Consumer Climate which will be released this morning. On Tuesday, the U.S Core Durable Goods Orders and CB Consumer Confidence will be announced. On Thursday, some of the EU markets will be closed due to public holidays, so there may be lower volatility again.
The USD/JPY pair slightly reversed its downwards movement during the second half of last week and climbed up to the 102 level. The pair moved down as the Yen strengthened due to positive economic data and speculations about a possible ease in additional monetary stimulus. However, the Japanese economic recovery is still weak and might need the stimulus. That’s why there is a slight bullish movement. This week, traders should watch the Japanese Retail Sales data and Kuroda’s speech (Wednesday) and Tokyo Core CPI (Thursday). The inflation data is expected to increase by 2.9%. If the inflation remains low, the pair is expected to rise.
Gold has remained in a sideways movement and ranged between $1,283/ounce and $1,305/ounce. The overall equilibrium seems to be around $1,295/ounce. The price reacted several times on escalating tension in Ukraine and Thailand. Also, the price fell several times because of positive U.S. data but always managed to climb back up. The price is around $1,295/ounce. Traders should watch the U.S. Core Durable Goods Orders, CB Consumer Confidence and GDP data (Thursday).