Your weekly fundamental view 2016.03.29

March 29, 2016 09:21

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Need to know

Another short week, though one with several important releases including Non-Farm Payrolls and a Janet Yellen speech.

Coming up

On Tuesday 29 March we have German unemployment data for March. German unemployment remains significantly below the Eurozone average,but reductions have slowed somewhat over the last year with reads of 6.2% in January and February 2016. Why should traders care? The German economy has often been the bright spot in the Eurozone,so if the recovery here continues to slow then it makes the ECB's job even harder. Watch EUR USD support 1.1190: resistance 1.1370

Thursday 31 March sees Japan's Tankan survey for Q1 2016. The influential Tankan survey (conducted by the Bank of Japan to track corporate economic and business expectations and their outlook) is released late Thursday. The survey is seen as a leading indicator for Japan's economy. Why should traders care? The Tankan survey data feeds directly into BOJ monetary policy and this is the first survey since negative interest rates were introduced. Watch USD JPY support 109.80: resistance 114.40

US ISM manufacturing survey for March is released on Friday 1 April. A key measure of US industrial activity,the ISM fell into recession in late 2015 - remaining below 50 in January and February. A move back to 50 or above would be seen as positive. Why should traders care? An industrial recession has a been a precursor to a wider US recession in all but one instance since 1950. Watch US T Note support 128.20 : resistance 129.62

Chart to watch: Gold weekly

Gold has moved above the long term downtrend line and horizontal resistance at $1182.38, to trade more than a hundred dollars higher in 2016. But it has not been able to break above $1300, which was a failure point for the metal in December 2014. I note that RSI 14 for Gold (lower chart) has tested at 70 and moved lower. The question now is will Gold be sensitive to any further increases in US inflation? Or have we already reached the upper bound of the current move?