Market Review for April 8

No doubt, the star of the market yesterday was the USD/JPY, as investors continue to digest all what the Bank of Japan announced at the previous meeting on monetary policy, and more selling yen. Sales of the Japanese currency through cross led to the temporary strengthening EUR/USD and GBP/USD with further pullback. As a result, the first trading day ended around 1.30, and the second — near 1.5250.

EUR/USD was behaving with restraint amid empty economic calendar and the only catalyst in the form of movement dynamics crosses the yen. The pair opened at 1.2975 day, peaked at 1.3037, but the proximity of strong support in the form of 1.3040 caused corrective pullback in the area of ​​1.30, where the auction ended.

GBP/USD showed even less confidence in further upward movement. After closing above 1.53, investors began to doubt, so there are legitimate currently buying British currency. Draghi even spoke, answered questions, and after the Bank of England, we have not received any hint. Perhaps it is these concerns sent the pair from the opening level of 1.5312 to 1.5237 minimum, near which, and finished the day.

USD/JPY made its way to a 4-year high with almost the very beginning of the trading day, as everyone is in anticipation of excess liquidity, the Bank of Japan that have flooded the markets. The pair opened at 98.21 per day, reaching as far as the maximum of 99.36, where it completed the sale.

Forecast for Tuesday, April 9, 2013

Of events that are of interest for the near future, we would like to select the protocol of the last meeting FOMC. It is possible that the overall tone is cautiously optimistic, but do not give it much importance. The fact that at the time of the meeting of the Committee a report on the results of the March employment levels were not known. It is possible that many members of the FOMC changed their views on the future of the U.S. economy. But the pessimistic notes can only further assure us that the weakness of the latter indicators are very similar to the threshold of a trend.

Today, the order of the report on the trade balance of Germany, and it is possible that it will please the bulls on EUR. The recent growth of industrial production and factory orders may offset the negative effects of the downturn in manufacturing. In such case, EUR/USD may try to go above 1.3040 and head towards 1.3072.

As for the GBP/USD, the pair did not prevent the rise of British empty calendar of economic events of last week, so this week and has great chances to continue to grow under the influence of market sentiment. Because investors require a delay in the change of the Federal Reserve monetary policy, we expect to further strengthen GBP/USD with the primary purpose to 1.5460 and then 1.55. However, pay attention to today’s publication of the industrial production and trade balance of the United Kingdom, as they can make small adjustments to the trend. Weakness releases can accelerate the reduction, which began yesterday with the primary purpose to 1.5210.

The fact that the USD/JPY closed the trading day up 99.00, even closer to the coveted pair of level of 100.00. If this week is the path traversed with ease, it will say that the couple is quite prepared to larger goals as 103.00. We warned about the high growth potential of the pair in the long run, despite the temporary setbacks that we have seen in front of the statement Kuroda. Again, use the following corrective movement as the perfect point for entry.


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