The major risk event over the week end is now behind us and as is often the case we’ve seen a “buy the rumor, sell the fact” situation where safe haven assets had been bought in the run up to last week end and now the event is over those safe havens are reversing that move. Gold is a little lower having reached as high as $1390.0 in the early hours of the morning and now is back to $1381.1, meanwhile the Yen is giving back some ground as USDJPY bounces off Friday’s 101.20 low to 101.55. Even equities are a higher on the open this morning but one can’t help but think that this little shift back into risk might be rather short lived considering the headwinds that remain and the geopolitical tensions over Crimea are unlikely to end at this juncture.
The focus for the week ahead will not only continue to be on the themes that have dominated so far i.e. China and the Federal Reserve’s tapering, but the Eurozone will be back in focus especially this morning as CPI data is due to be released at 11.00 GMT. We’ve already seen the flash report which came in at 0.8% and led to an extension of the single currency’s strength with EURUSD taking another step closer to the 1.4000 mark, but in the latter part of last week the euro softened and this morning EURUSD is a lower at 1.3885.
Also this week are the FOMC rate decision and the UK budget on Wednesday with the latter likely to grab many of the headlines with a UK General Election only a year away
Further reading:
USDJPY: Upward Correction Suggests Retracement To 100 Level-Elliott Waves
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