Is The Bank Of Japan Going To Impress The Market Again?

While the proposal to limit the use of weapons between citizens has been rejected in the U.S., the appointment with the revision of the debt ceiling is getting closer. Analysts are still expecting a 3% grow of the American economy in the first quarter of 2013, quite an ambitious amount after the marginal rise at the end of 2012. However, it is possible that the excellent data coming from the United States in the first quarter have allowed the achievement of the target, although in April it is undeniable that there has been a slowdown. In addition to the GDP scheduled for release on April 26th, attention to the sale of existing homes on April 22nd (new homes for sale on April 23rd ), and the turn of durable goods orders will be on April 24th. Also attention to the movements of the week on EurUsd. 1.3170 and 1.29 represent significant barriers against the volatility of the market.

GERMANY AND UK ARE PROTAGONISTS

After the formal German passport to ECB rates cut, the German Ifo is going to represent the main event of the week for the Euro area and is scheduled for release on April 24th. The previous day we will be able to know the PMI manufacturing and services of the Euro zone, while on April 26th attention to the money supply M3 data. As happened in the United States, Britain will also publish its growth data in the first quarter of 2013 scheduled for April 25th.

KURODA EFFECT?

The new governor of the BOJ, Kuroda, will have to illustrate the outlook of the Japanese central bank to the financial markets on Friday, April 26th. Obviously, the statements of the central banker, for a few weeks now, have sparked a lot of volatility on the Jpy but this time, they could produce the opposite effect. In order to impress the market in fact, it is very difficult to imagine what kind of tool he is going to use.

In fact, the technical situation of UsdJpy seems to be very fragile, with a classic "3 little Indians" in the making. After the so-called "long shot" which culminated with the top of 99.96 on April 11th, UsdJpy attempted a first fall stopped by the support of 96.80. The real target, however, in our opinion and considering the oscillators still close to the overbought, is next to area 92/93 and it is on that level that we aim opening a short position.


Trade of the week: short EurSek at 8.53 stop 8.60

The attitude shown by the Swedish central bank in the meeting of last week, when the 1% rates were left unchanged, has provided a good excuse to sell Sek, by favoring a rather strong rebound up to the resistance of area 8.50/8.55. Anyway, rising above these levels, would represent quite a strong reversal trend sign that is probably not going to happen on the first try. In addition to the primary low of November 2012, January 2013, we can find here a series of moving averages of absolute importance (85, 200 and 255 days), but also the perfect equality between the first rising leg and the second one. In conclusion, each trend follower should buy Sek.