The GBP/USD fluctuated heavily in the week that passed and now looking ahead to another hectic week as the sentiment remains the main player in the market.
Investors are to focus mainly on the BoE Minutes for the last meeting to see the new signals over possible BoE move on rates. Inflation dropped unexpectedly in March to 4.0% yet still remains well above target. Investors were disappointed in April as they did expect a surprise sudden move from the back.
Last week in an interview arch MPC hawk Andrew Sentance reiterated his stance and insisted on the need to counter inflation with rate increases that will allow sterling to rise to offset some of the imported inflation, confirming that his vote remained the same in the past meeting.
More data to focus on will be retails sales and US housing data but mainly the sentiment is to control sterling’s trend versus the dollar. Investors eye rate hikes from the BoE while the feds see that the rise in inflation in temporary signaling extended pause on policy from the US opposed to UK which will keep sterling favored for gains.
We expect high volatility this week with the gradual decline in volume ahead of the long Easter weekend in Europe and the US.
Monday April 18:
No major releases are scheduled from the US as well and accordingly the start of the week will be more based on the sentiment as investors still focus on China and the European debt crisis.
Tuesday April 19:
At 12:30 GMT the U.S. economy will release building permits for March, and expected to come at 540 thousand compare with the previous of 517 thousand. The housing starts for March are also expected with a rise from the previous 479 thousand to 520 thousand which will be a boost for the sentiment and help sterling over the dollar.
Wednesday April 20:
The Bank of England Minutes for April will be released and after the three-way 5-3-1 split on monetary policy was seen we expect the same to have prevailed in the meeting. The minutes are to be important and influence trading the most this week as investors look for signs for the next step.
The U.S economy is to release existing home sales for March at 14:00 GMT; the reading is expected to come at 5.00 million with 2.5 percent while the previous reading was 4.88 million.
The U.S. housing data is anticipated to show some improvement during March, which could help the greenback to rebound.
Thursday April 21:
UK will release the public finance figures for March at 08:30 GMT which remain sensitive amid the high debt and the austerity measures by the new government to ensure the return to good fiscal health. PSNCR is expected to have risen to 14.0 billion pounds double the previous and PSNB is expected to have risen by 18.7 billion from 10.30 billion.
Retail sales will also be released at 08:30 GMT were sales are expected to have continued to drop with unemployment and eroding disposable income with inflation. Retail sales excluding auto fuel might have dropped 0.4% in March following 1.0% drop and on the year rose 0.8% easing from 1.2%.
Retail Sales with auto fuel are expected with 1.0% annual rise from 1.3% and on the month expected with 0.5% drop following 0.8% drop.
At 12:30 GMT the U.S economy will release its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance has reached 412 thousand.
The U.S. house price index for February will be issued at 14:00 GMT. The leading indicators index for March is expected to retreat to 0.2% from the previous increase of 0.8%.
Finally, U.S. economy will release Philadelphia Fed Index for April, which expected to slow to 37.0 from the previous 43.4.
Friday April 22:
The week ends on a short note as the market will be out with central banks holiday on Good Friday.
Originally posted here
Read more about forex technical analysis, forex fundamental analysis and forex news on ForexMansion.com
About ForexMansion.com:
www.ForexMansion.com is a part of the Finance Mansion Network which operates global financial websites. Our goal is to provide our readers with the most accurate, quality and up-to-date technical analysis, fundamental analysis and news in order to assist them in making the right financial decisions.
The Finance Mansion Network includes www.FinanceMansion.com,www.ForexMansion.com, www.StocksMansion.com, www.CommoditiesMansion and many more.
