5 Forex Storylines For This Week

EURCHF – Is trading dead?
USDJPY – is the rally over?
UK Budget Release
UK and Australia MPC Minutes
US Existing & New Homes Sales


EURCHF – Is trading dead?
After trading above 1.2100, the EURCHF is back around 1.2050 after the SNB left its EURCHF floor at 1.2000.  Looking ahead, traders will be watching Swiss economic figures, as without much negative news, the 1.2000 floor is expected to remain intact.  Also, it will be interesting to see what happens if 1.2000 is breached and if it triggers sell stops, to the 1.1900 area.  Overall, barring new statements from the SNB, trading in the EURCHF looks dead for the short term.

USDJPY – is the rally over?
The USDJPY hit a high of 84.20 last week, but has since fallen back to around 83.00 this morning.  Also, on the technical side it looks weak as 83.25 support has been broken and it is trading in a downtrend with lower lows.  As such, the pair could be vulnerable to further profit taking and a move to 82.00 if 83.00 fails to hold.

UK Budget Release
On Wednesday, the UK government releases their annual budget.  With a year’s worth of austerity this year’s budget is going down to the wire in regards to how big or small it will be.  A bigger budget could effect Forex traders, as they may take the news to short the GBPUSD on inflation worries.

Ian Anderson in the Huffington Post reviews the late hour political angle of the upcoming budget release.

The Coalition has been fretting for the past few weeks about Budget headlines like these:
 "Osborne attacks middle class perks"
 With access to child benefit for middle earners under threat and the future of pensions tax relief barely out of the headlines, traditional Tory voters will have been reading their Daily Mails rather nervously recently.
 The negotiations for this Budget are going right down to the wire with the final meeting of the quad - Cameron; Osborne; Clegg and Alexander - due to take place on Monday morning. It rather reminds me of the last few Labour Budgets which kept government printing press working on overtime.  Read More

UK and Australia MPC Minutes
While not as exciting as the actual meetings, bot the RBA and BoE will be releasing their MPC Minutes.  In regards to the RBA, Forex traders will be looking for any hints towards AUD intervention and whether the central bank may act to weaken the Aussie.  For the BoE, Forex traders will be awaiting the central bank’s economic outlook and whether it warrants further monetary stimulus.

US Existing & New Homes Sales
Wednesday and Friday bring us key US housing data.  With the US employment market continuing to show gains, the fate of further FED easing rests on the housing market.  As such, Forex traders will be watching for any signs that the downturn has ended and sales are stabilizing.  Positive figures could trigger gains in stocks and boost the dollar against other safe havens such as the Japanese Yen and Gold.