Mar­kets steady, Euro GDP in fo­cus

Financial Mirror (Cyprus) - - FRONT PAGE -

Buy­ing sen­ti­ment to­wards the Euro re­ceived a solid boost af­ter com­ments from ECB chief econ­o­mist Peter Praet el­e­vated ex­pec­ta­tions that the Euro­pean Cen­tral Bank will be wind­ing down its stim­u­lus pro­gram.

Ac­cord­ing to Praet, ro­bust eco­nomic growth has boosted con­fi­dence over in­fla­tion reach­ing the 2% tar­get. With such hawk­ish com­ments fu­elling spec­u­la­tion over the ECB re­veal­ing more about its bond-buy­ing pro­gramme as soon as next week, the Euro could ven­ture higher. While the im­prov­ing eco­nomic con­di­tions in Europe could con­tinue sup­port­ing the Euro, po­lit­i­cal risk may threaten upside gains.

Fri­day’s main event risk in Europe is the third es­ti­mate of the first quar­ter GDP, which is ex­pected to con­firm that eco­nomic ac­tiv­ity cooled from 2.8% to 2.5% YoY. Al­though such a re­sult may pres­sure the Euro, the cur­rency re­mains sup­ported by ex­pec­ta­tions of QE po­ten­tially end­ing this year.

Tak­ing a look at the tech­ni­cal pic­ture, the EURUSD has marched to a fresh two-week high above 1.1810 as of writ­ing. A solid break above 1.1820 could en­cour­age an in­cline higher to­wards 1.1930. Al­ter­na­tively, a fail­ure for prices to con­quer the 1.1820 level could re­sult in a de­cline back to­wards 1.1750. curbs to coun­ter­act fall­ing out­put from Venezuela and Iran, WTI could be poised for fur­ther pun­ish­ment. It must be kept in mind that ris­ing out­put from Rus­sia and OPEC com­bined with surg­ing US Shale pro­duc­tion could re­vive the over­sup­ply con­cerns – ul­ti­mately haunting in­vestor at­trac­tion to­wards Oil.

Fo­cus­ing on the tech­ni­cal pic­ture, WTI Oil is un­der pres­sure on the daily charts. Sus­tained weak­ness be­low $66 could en­cour­age re­spec­tively.

a

de­cline

to­wards $64.30 and $64.00,

This has been a pos­i­tive trad­ing week for the GBPUSD, mostly thanks to a weak­en­ing US Dol­lar. With the bear­ish fun­da­men­tals be­hind the Pound’s weak­ness still in­tact, it will be interesting to see how much fur­ther the GBPUSD re­bounds be­fore bears at­tack again.

Tak­ing a look at the tech­ni­cal pic­ture, the GBPUSD is in the process of a tech­ni­cal bounce on the daily charts with prices trad­ing around 1.3450 as of writ­ing. A break­out above 1.3450 could en­cour­age an in­cline higher to­wards 1.3530. Al­ter­na­tively, a fail­ure for bulls to con­quer the 1.3450 level could re­sult in prices sink­ing back to­wards 1.3380 and 1.3300, re­spec­tively.

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