Market Review: The Italian Elections
Economic calendar (highest volatility): 5th March – 9th March 2018:
In the previous week, the team at FintechFX did attribute some possibility for newly elected United States (U.S) Federal Reserve Chairman Jerome Powell to make a less neutral statement pertaining the direction of Interest Rates. This was proven to be correct when he presented a more hawkish testimony in front of the U.S Congress indicating the potential of more than three Interest Rate hikes to take place this 2018. In addition to this, several potentially market was impacted by several destabilizing news such as U.S President Trump’s conviction to impose import tariffs and oil flow disruptions from Libya.
This week, the team at FintechFX view the ‘2018 Italian Elections’ to possibly bring about the most market volatility for the week; with the major trigger for unexpected market volatility focusing on whether ‘populist’ driven parties are able to curb or stop the inflow of economic and political refugees into the country. The Italian elections aside, this week the market is set to see as many as 4 Interest Rate Decisions coupled with the end-of-the-week American February 2018 Nonfarm Payrolls (NFP) data. The team here at FintechFX opine that with all these major mentioned potential catalyst in play, this week could easily be labelled as the most volatile week to date for this 2018.
This week, the AUD/USD presents traders with some trading volatility as the Reserve Bank of Australia's (RBA) Interest Rate Decision (Cash Rate) is scheduled for review during the earlier half of the week. In addition for the week, there is also a series of other Australian specific data which is due for release. The Australian Dollar (AUD) in our opinion, is still highly undervalued and shows some signs of rising this 2018. In the light of a potentially more hawkish statement moving forward, markets are looking at the AUD/USD to regain some of it's strength which has been lost throughout the years. Nonetheless for this week at least, the team here at FintechFX view some opportunity to sell the AUD/USD at the key 23.6% resistance levels prior to the U.S February 2018 NFP release which is set to take place at the end of the week.
Formerly, the USD/CAD in regards to the chart below showed some pattern of a Wcykoff triggered sell-down. The team here at FintechFX note that the Dow Theory's 50% level is showing good indication for a continuation of a downtrend. The validity of this view has also been well tested by post the U.S FOMC Meeting Minute release and the Canadian Consumer Price Index (CPI) data which show that prices are still failing to break above the Fibonacci 61.8% level. However, the Canadian GDP figures as of late have fallen below expectation invalidating this view. Therefore this week, the team at FintechFX opine that the USD/CAD could rise further in light of a stronger U.S NFP.
Source (Charts): https://www.investing.com
Source (Economic Calendar): https://www.forexfactory.com/calendar.php
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