Market Review for April 3

On Wednesday, the markets came correction, the European currencies which helped to restore some of the positions. As a result, EUR/USD finished the day in the area of ​​1.2850, and the GBP / USD — in the area of ​​1.5140.

EUR/USD was acting pretty cool, getting support to the news that the IMF reached an agreement with Cyprus, promising to invest $ 1 billion to resolve the fiscal and financial problems of the country. As part of the agreement will be increased taxes of legal entities from 10% to 12.5%, while the rate for individuals will be doubled (from 15% to 30%). The market took this news with optimism, hoping that at some time in Cyprus calm returns.

GBP/USD in the first half of the day remained under pressure, but even weak data on business activity in the construction sector has not been able to help a pair of fixed below 1.51. With the onset of the U.S. session, the pair of correction, recovering to a maximum of 1.5157, in which area and completed trades.

USD/JPY was ready to recover, testing 93.60 during the Asian and European session. Investors awaited U.S. data, and the release of their disappointment, which resulted in active sales couple with a break below 93.00 to 92.71 low. Trading day USD/JPY closed around 92.85.

Forecast for Thursday, April 4, 2013

Tonight will be interesting. Central banks sit. They start with the decision of the Bank of Japan. Many expect even more hope that Kuroda decides to change in monetary policy. In general, the odds are pretty high, especially given the dynamics of USD/JPY — the new head of the Central Bank can try to preserve began in October last year rally. If the size of quantitative easing will increase (presumably for 30 billion dollars a month), and the maturity extended, the district 94.40/50 is very real. By the way, is very likely and cancellation rules banknote issue that will only support the upward movement. But otherwise expect to roll back to 91.30 to 91.00 followed by testing.

Now for the ECB. Yesterday we learned that the HICP was 1.7%, well below the target of 2%. Thus, the conditions for reducing rates remain favorable, and the current state of the economy of the region requires an additional incentive. In fact, the markets do not expect any changes in the current session, as Draghi prefers to prepare the public before you do anything. Today, as always, all the attention at the press conference. Hints at readiness to incentive measures amid recent weak data from the U.S. labor market may encourage the growth of EUR/USD with the immediate goal to 1.2920 and then 1.2970.

To the UK, we would not do special rates — the Bank of England is unlikely to be decided to expand the program at the current meeting. Once the market to see this, likely reflex jump GBP/USD up. However, most likely, the pair’s limited level of 1.5172 (200 SMA).


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