This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Next Week's Currency Market Forecast

NEW YORK ( BBH FX Strategy) -- Here is our currency markets forecast for next week.

USD: The dollar is likely to remain firm next week amid concerns that the global economy is losing steam. This dynamic should continue to drive positioning adjustments that are also broadly dollar supportive.

Technical momentum may be supportive for the dollar as well after most of the majors failed to break the top end of their recent ranges. This should result in a reversal in the price action and may lead currencies to test the bottom end of their recent ranges as positioning adjustment continues. But the inability to break key levels means currencies are likely stuck in recent ranges.

On the data front, next week we get more business surveys for March, with the Chicago PMI the key report. Expectations are for a slight decline to 63.0 from 64.0. Next week we get speeches from Plosser, Bernanke, Rosengren, Fisher, Bullard, Lockhart and Lacker (both of which are voters). However, recent economic developments argue that the prospects for QE3 have declined. This is likely to limit the influence that these speeches have on price action.

EURO: The combination of technical momentum and renewed concerns over the euro zone economic outlook should weigh on the euro next week. The euro failed to break through the key resistance level of 1.330, suggesting that a near-term top may be in place. The flash reading of the eurozone PMIs disappointed expectations and failed to break the boom/bust level of 50, adding concerns that the economy has yet to stabilize. Germany's manufacturing PMI even slipped to 48.1 from 50.2 in February.

Next week, Germany's IFO for March should help crystallize the near-term economic outlook. France, Italy and Spain all issue debt, with retail sales in Portugal, Spain and Greece expected to be watched closely. On the policy front, the focus of next week's finance ministers meeting will center on discussions about combining the EFSF/ESM and finding a replacement for Juncker. Germany's finance minister, Schaeuble, is one of the leading candidates.

Key Levels: Resistance at recent low of 1.300; break of recent low opens up a technical target of 1.262, the early January low.

GBP: The combination of the weak February retail sales report and the downwardly revised figures in January brings into question the recent resilience of Britain's economy. The dovish surprise from the recent minutes also keeps open the possibility of another round of QE in May. The potential for further policy easing should remain a headwind for sterling against the dollar but our sterling outlook against the euro remains more constructive amid renewed concerns over the economic outlook in the euro zone.

Key Levels: Resistance seen at 1.588; support around 1.56.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%
TSLA $241.80 0.43%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs