Market Review for April 2

On Tuesday, the majors have changed direction. At this time, we observed recovery of U.S. dollar. As a result, EUR/USD finished the day in the area of ​​1.2810, and the GBP/USD — in the area of ​​1.5110.

As soon as the markets recovered full working mode, the dynamics of EUR/USD was adequate. A series of rather weak data on business activity in the euro zone has helped in this regard. Final data for PMI Spain and Italy were revised for a fall, and the Spanish release showed the most dramatic reduction of jobs in the last 3 years. An additional impact of steel and the news that the Minister of Finance of Cyprus, has resigned. The pair opened at 1.2846 day, grew to 1.2877, but then again started rolling back, ending trading at around 1.2810.

GBP/USD fell under the scope of bears in connection with the release of weaker-than-expected figures on business activity. Sure, it was just an excuse for the correction, as a weak performance in the UK is not in doubt. As well as the imminent easing of monetary policy by the MPC. The pair opened at 1.5223 day, made a half-hearted attempt to pass 1.5260, but fell under the sale, which intensified with the release of PMI (48,3 vs. 48.9). As a result, there has been a minimum of 1.5106, which is close to and completed trades.

Despite the fact that during the Asian session, USD/JPY has come under pressure, having descended to a minimum 92.56, for more traders are not enough, and the pair rebounded to 93.30 area, where he finished the day. Investors are waiting for the next meeting of the Bank of Japan, which determines the high volatility of the currency pair.

Forecast for Wednesday, April 3, 2013

Today, we call attention to economic data from the U.S., in particular, labor market indicators: research ADP and ISM services sector. If the first statement is not always accurate as a leading indicator for the NFP, then as an indicator of the direction it can still be used. Excess of forecasts will mean a high probability of a good increase employment levels. But the ISM employment component may adjust our expectations, as it is the best indicator for predicting nonfarmov.

During the European session, will not be particularly significant releases, but considering the impressive response of GBP/USD to the publication of PMI in the manufacturing industry, we should not completely ignore the rate in the construction sector. Excess of forecasts can rehabilitate a couple with a possibility of return above 1.5130 and then to 1.5160. In any case, the breakdown 1.51 support will not be easy to implement.

Now for the USD/JPY. To date, the program of buying assets of the Bank of Japan is made up of two elements:

  1. Buying up assets of $ 101 trillion. yen up to 2013 with a term of 3 years;
  2. Direct purchases of JGB 21.6 trillion. yen for a period of up to 30 years, although the majority of the maturity of 10 years or less.

So, now considered the option of buying up assets increased volume in the first part of the extension of the maturity up to 5 years or more. So, if this will happen on April 4, ie If politicians move from words to action, USD/JPY will head to 95,00. Most likely in the near future will be to level 94.50, and then everything will be in the hands of the people of Japan, as well as data from the U.S.. If the Bank of Japan will refrain from any action which is very likely to test 91.00 (at the end of February were attempts).


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