The week ahead has many a fundamental news release to look forward to, events which are sure to have traders licking their lips at the implied volatility and the numerous trading opportunities they create. Let us take a look at our top 3 picks:

  • With the EUR/USD testing January highs, Mondays German IFO Business Climate figure will be closely watched by traders. The figure represents a survey of manufacturers, builders, wholesalers and retailers in Germany and seeks to quantify their views on the current and future outlook for the German economy. The figure is regarded as a leading indicator, predicting the growth of the economy and a better than expected result will likely see the EUR strengthen, sending the EURUSD firmly above the 1.0800 resistance level. while a lower than expected result will see the EUR weaken as subdued economic growth is priced in.
  • Thursday sees the release of the much-anticipated US Final GDP q/q figure, which is the annualized change in the inflation adjusted value of all goods and services produced by the economy. The figure is the broadest measure of economic activity and closely watched by traders as the primary gauge of the health of the US economy. A better than expected release will see the USD strengthen across the board as trader’s price in a stronger US economy while a worse than expected result will see the USD weaken as traders sell the currency in anticipation of a slowdown in economic growth.
  • With all eyes on the UK and its triggering of Article 50, as it starts the clock on its divorce negotiations with the EU on various factors, primarily trade, Fridays Current Account figure, which measures the difference in value between imports and exports into the country, will be scrutinized by traders as they look to see how the UK is faring in terms of trade. The amount of a specific currency demanded or in supply in the market place is directly related to its use in trade. An increase in exports implies that more GBP is demanded which pushes the value of the pound higher while a higher import number will imply that more GBP is being supplied which will drag down the value of the pound.

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