The Week Ahead: 1st – 5th April 2024

Overview for the Week Ahead

Highlights of the Week

Bitcoin price flashes sell signal on the weekly timeframe, forecasting a potential correction.
Meme coins and some altcoins show strength as they rally over the weekend.
This week shows promise, but investors need to be cautious.

This week, Bitcoin has finally flashed a sell signal on the weekly chart, forecasting a correction of one-to-four weekly down candlesticks. Despite the short-term correction forecast, some altcoins are rallying.

U.S. employment data on Friday will be the main highlight of this week’s economic calendar amid hopes the economy is on course for a soft landing. The second quarter gets underway after a stellar performance for stocks in Q1. The yen and the yuan remain on intervention watch while data out of the Eurozone and China will be closely watched. Here’s what you need to know to start your week.

Friday’s jobs report will be in the spotlight amid investor confidence that the economy is set for a “soft landing”, in which inflation moderates but the economy avoids a severe downturn.

The U.S. economy is expected to have added 205,000 jobs in March, slowing from the 275,000 jobs added in February.

Hopes for a “soft landing” for the economy were boosted after the Fed at its March meeting stuck to its view of three rate cuts this year while upgrading its outlook for economic growth.

Ahead of the jobs data, investors will also get a chance to hear from several Fed officials including Fed Chair Jerome Powell on Wednesday. Among others due to make appearances are New York Fed President John Williams, San Francisco Fed head Mary Daly and Richmond Fed head Thomas Barkin.

Monetary authorities in Japan and China are on high alert as their currencies weaken past levels that they’ve been defending for months, largely thanks to the strong dollar.

With the yen faltering towards the 152 per dollar level and the yuan struggling to break above the stronger side of 7.2 per dollar, officials have stepped up efforts to bolster their currencies.

In Japan, that means verbal warnings, while in China it has been state banks buying yuan and selling dollars.

Given how much the two big Asian currencies have fallen, there’s a growing school of thought that Beijing could have grown more tolerant of a weak yuan to maintain its competitive edge against the yen but it’s hard to say what’s next.

The Euro Stoxx 50 and the DAX maintained their momentum, reaching new record highs as investors anticipated potential rate cuts by the European Central Bank (ECB).

The Eurozone is to release flash inflation data for March on Wednesday that will be closely watched amid speculation that the European Central Bank is gearing up to cut rates in June.

Inflation in the euro area remained high from the start of the year and needed to fall further to allow the ECB to deliver a summer rate cut, making the next three inflation reports key for markets (and the ECB).

If inflation surprises to the upside, rate cut bets will be pushed out.

Have your trading charts ready this week!