ECONOMIC DATA, CENTRAL BANKERS IN THE HEADLINES ON FRIDAY
A series of high-profile data releases will make their way through the financial markets on Friday, giving investors the latest glimpse of key European and North American economies. On the monetary policy front, central bank speakers from the Eurozone, United Kingdom and United States will also influence investor sentiment.
Action begins in Europe at 08:00 GMT with a report on German business sentiment. The IFO business climate index is forecast to dip slightly to 102.0 in May from 102.1 the previous month. The gauge for expectations is also projected to ease to 98.5 from 98.7.
The United Kingdom’s statistics agency will release revised first-quarter GDP figures at 08:30 GMT. Britain’s economy is projected to grow 1.2% annually in the first quarter.
Shifting gears to North America, a US report on durable goods orders could generate heavy traffic beginning at 12:30 GMT.
US orders for manufactured goods meant to last three years or more are forecast to fall 1.4% in April after climbing 2.6% the month before. However, the declines are expected to be concentrated in the transportation category. Excluding this volatile category, orders are forecast to jump 0.5%.
In terms of monetary policy, European Central Bank (ECB) official Benoit Coeure will deliver a speech at 13:15 GMT. Around the same time, Bank of England (BOE) Governor Mark Carney and Federal Reserve Chairman Jerome Powell will also deliver speeches.
The minutes of the July Federal Open Market Committee (FOMC) meeting, which were released earlier this week, gave a strong hint that the US central bank will hike interest rates next month. However, the transcript also showed no urgency on the part of officials to hasten their rate hike cycle for the remainder of the year.
Europe’s common currency succumbed to bearish pressure on Thursday, as prices fell to a low of 1.1684. EUR/USD has since recovered to around 1.1722 but faces a dire short-term outlook. A break below the Thursday low could expose the 1.1668 target, which is the low from early October. On the opposite side of the ledger, immediate resistance is located at 1.1733 followed by 1.1829.
Cable extended its losing streak on Thursday, with prices bottoming in the low 1.3300 region. GBP/USD would later recover to 1.3380 as demand for the US dollar softened in the latter half of the session. The pair is eyeing immediate resistance around 1.3425. On the flipside, support is located at 1.3306.
USD/CAD rallied to a high near 1.2910 on Thursday before retracing back toward the 1.2880 handle. The pair risks a double-top formation north of 1.2900, which could generate significant headwinds for the bulls. Durable goods orders on Friday could set the tone for the pair heading into the weekend.