By Russell Glaser
Over the previous two trading days markets were focused on the Greek debt crisis and tumbling commodity prices. After yesterday’s rebound in equity markets and commodity gains, economic data should be the driver for the remainder of the week with the highlight being US inflationary data on Thursday and Friday.
Today’s Economic Events:
GBP – UK Inflationary Report – 9:30 GMT
The Bank of England has practically done away with inflation targets as UK inflation has consistently been above the 4% level. Today the inflation projection will be formally announced and should come in near this level. A catalyst for Sterling would be any increase in the expected growth rate for the UK. Traders will also be following BOE Governor Mervyn King who will hold a press conference to discuss the report. To the upside for the GBP/USD, resistance is found at 1.4640 with support at 1.6290 off a trend line from the March low.
CAD – Trade Balance – 12:30 GMT
Expectations: 0.5B. Previous: 0.0B.
The Loonie came off of its recent lows versus the dollar yesterday and looks to continue to strengthen in turn with rising oil prices. A strong trade balance will help the Canadian dollar continue its appreciation versus the dollar. An initial target is found at the May low of 0.9445 with resistance above last week’s high at 0.9710.
USD – Trade Balance – 12:30 GMT
Expectations: -46.8B. Previous: -45.8B.
The US trade deficit is expected to have widened in March following sharp increases in commodity prices, specifically crude oil prices. But traders may be in for a surprise as a weakened dollar may have increased the competiveness of US exports due to a weak dollar. A better than expected trade balance may be a positive for the dollar. Resistance comes in at the January to May trend line at 1.4470, followed by 1.4650. To the downside, Monday’s low at 1.4250 could prove to be supportive as well as 1.4150, the 38.2% Fibonacci retracement level from the January to May move.
Crude Oil – Weekly Crude Oil Inventories – 14:30 GMT
Expectations: 1.1M. Previous: 3.4M.
Last week’s report showed a sharp increase in crude oil stocks that fed into the sell off of commodities. Following yesterday’s sharp appreciation in the price of crude oil, a better than expected result should boost crude oil prices.
Forex Market Analysis provided by ForexYard.
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