US Dollar (USD) extended downside movement against the Danish Krone (DKK) on Monday ahead of Denmark’s Gross Domestic Product (GDP) report for the fourth quarter; the pair might test the channel resistance if the data comes worse than expectations.
USD/DKK is being traded around 5.4222 at 8:50 GMT in Asia. The pair is expected to find hurdle near 5.4378, 50% fib level, ahead of the channel resistance which is currently sitting in around 5.4492. A break and daily closing above the channel resistance could push the pair into relatively stronger bullish momentum, opening doors for 5.4890.
On the downside, the pair is likely to find support near 5.4150, 38.2% fib level, ahead of the channel support that is currently near 5.3798. A daily close below the channel shall threaten further dips below the 5.3500 handle.
Statistics Denmark is scheduled to release the fourth quarter GDP report today. The economy shrank by 0.05% during the previous quarter as compared to 0.6% growth in the same quarter of the year before, the median projection of different analysts says. A worse than expected actual figure will be bullish for USD/DKK and vice versa.
On April 07, Statistics Denmark will release the industrial production report for the month of February. According to forecast, the manufacturing activity increased in February by 0.56% as compared to 5.0% decline in the month before. Generally speaking, high industrial production is seen as bearish for USD/DKK and vice versa.
Chicago PMI Report
Today MNI Deutche Börse is due to release the Chicago Purchasing Managers Index (PMI) of the US. The index declined to 58.5 points this month as compared to 59.8 points in the previous month, the forecast says, higher than expected reading will be seen as bullish for USD/DKK and vice versa.
Fed chairperson Janet Yellen is due to speak about the US economy today. She might clarify her stance on the rate hike amid recent monetary policy press conference. Not to mention that Yellen surprised investors on March 19 saying the central bank might announce the first interest rate hike as soon as the next six-month period, comments that were in 360-degree contradiction to the Fed forward guidance stance. Equities turned bearish while the US Dollar (USD) jumped broadly against the major peers after the monetary policy press conference. Many analysts believe that the chairperson could calm down the stock investors today by adopting the old data-dependent stance about the rate hike.
Trading USD/DKK on breakouts could be a good strategy. The pair might break the upper trendline channel if Yellen reiterates her previous stance about the rate hike.
To contact the writer of this story: Usman Ahmed at email@example.com