Market Review for April 1

The weak U.S. dollar has become the most notable event in the beginning of the trading week. USD/JPY has slipped dramatically down, EUR/USD and GBP/USD regained some of their positions. As a result, EUR/USD finished the day in the area of ​​1.2850, and the GBP/USD — in the area of ​​1.5230.

Asian session was pretty cool, at least for the EUR/USD and GBP/USD, as most of the European countries was still in a state holiday. The excitement generated only U.S. ISM data release, which proved to be much worse than expected. The figure was 51.3 versus 54.2 expected, which helped couples achieve highs of the day: 1.2867 and 1.5240, respectively.

Despite the reticence of European currencies, USD/JPY has found reasons for the fall. This time, the catalyst was reduced Nikkei more than 2% in response to the disappointing trend in business activity index in the Tankan survey (-8 vs. 7). In addition, it became clear that companies’ plans for capital expenditures significantly different from market expectations: 2% vs. 5%. Kind of no-confidence talk of a new Prime Minister, who did not enter an implementation. Pair from the opening level to a minimum slipped 94.25 93.16, 93.40 retracing to the area to be closed.

Forecast for Tuesday, April 2, 2013

Despite the fact that the current week got shortened due to the Catholic Easter, the remaining four days will be full of important events that can cause an impressive reaction of currency pairs. Besides the U.S. we expect solutions nonfarmov four central banks on monetary policy, as well as data on business activity in Europe, Asia and the USA. Maybe not all of them will trigger the breakdown of strong technical level, but just three have great chances: meeting of the Bank of Japan and the ECB, as well as a report on U.S. employment levels. Thus, the fun is waiting for us later in the week, and now turn our attention to the fact that there are.

Literally in the next few hours will be published decision of the Bank of Australia, from which no waiting for changes in monetary policy, but are waiting for new clues in the text accompanying statement. If the tone of the RBA will clearly indicate whether further retention rates unchanged, AUD/USD is fully capable to break resistance near 1.05. True, yesterday’s PMI from China a few spoiled the mood of the bulls.

During the European session, we are waiting for data on the UK business, which can bring surprises. If the euro zone PMI hardly be revised, here we can see the return of more than 50-point mark. In December and January, the index held above this level, but in February slid to 47.9. If this is just a one-time event in an uptrend, wait movement GBP/USD to 1.5260 with the further aim to 1.53.

Yesterday’s market reaction, and weak Tankan survey data have indicated that the corporate sector does not believe in the national economy, and to hedge against, if the economic growth rate will remain as weak and deflation can not be overcome. That is why the results of the meeting of the Bank of Japan this week is so important. If a program of quantitative easing will be significantly increased, ie If politicians move from words to action, USD/JPY will head to 95,00. Otherwise, testing 91.00 is very likely.

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