Market Review for the week from 1 to 5 April

The U.S. dollar came under pressure from 1 to 5 April as received by the first week of the month, a key economic data for March did not meet the expectations of participants in the global financial markets. Signals that come from the major indicators showed a somewhat slower growth in the major economies of the world (with the level of 2.0-2.5% to 1.5-2.0%). The Dollar Index USDX, which is the ratio of the «American» to a basket of six major world currencies in the second half of the day on Friday was quoted at 82.47, which is 0.6% below the closing price of the previous week. The deterioration of the data from the U.S. clearly does not play into the hands of imminent collapse of quantitative easing.

Mario Draghi supported the euro, following his monthly press conference, which is done by the end of the meeting of the Governing Council of the ECB on monetary policy. The head of the European regulator noted the possibility of a rate cut and further stimulate economic growth in the euro zone, and also explained the situation around Cyprus. The EUR/USD initially reacted lower, but found support at 1.2730 area, then turned and moved up strongly, reaching the 1.3050 resistance. It seems that investors reacted positively to the news of a possible stimulating economic growth. Especially in light of statements Draghi, the ECB is not likely to work in the style of the Fed or the Bank of Japan. Toward the close of the week the pair was trading at 1.3040 area, adding 1.8%.

PMI index from Markit, characterizing the state of the major sectors of the UK economy, have given mixed results in April. On the one hand the industrial and construction sectors continue to be in recession, and the other — the activity in the services sector has increased and moved away from the border indicator for a recession mark by one percentage point, reaching 52.4%. The share of the construction sector and the industry accounts for about 22% of UK GDP, while the service sector more than 70%. Accordingly, there is reason for pessimism and optimism. On this background, the British pound was under pressure at first, but later in the week moved up, taking advantage of the weaker dollar. Toward the close he added 0.8%.

Reserve Bank of Australia upheld the expected interest rate. Accordingly, the AUD / USD continued to rise and tested resistance at 1.0480. After that, there was a roll back down, but she again feels supported by the 200-day moving average. Macroeconomic statistics, can strengthen the position of «ausi» in this period have been published. On Friday evening, the AUD/USD was trading at 0.2% below the close of the previous week.

Japanese Yen expected negative reaction to the outcome of the meeting of the Bank of Japan, the program of quantitative easing, which exceeded the expectations of the foreign exchange market. USD/JPY pair traded in a narrow corridor from Monday to Wednesday and flew to the annual maximum of 97.10 after the announcement of the details of the program.

Forecast for the week, 8 — 12 April

The main events of the week that may have an impact on the dollar will be the publication of the minutes of the last meeting of the U.S. Federal Reserve (April 10, 22.00), as well as figures on retail sales (April 12, 16:30 GMT). Last «minutes» bit agitated investors. They drew attention to the fact that some members of the Committee expressed the view that an early collapse of quantitative easing. After that Bernanke had to reassure markets. Accordingly, participants will be carefully read them this time. Here, we do not expect surprises, but urge to remain cautious before the publication of the document. Retail sales have traditionally had a limited impact on the currency market itself. Significant reactions are rare, but they can trigger movement in the stock markets, which will affect the dollar. Overall, the U.S. currency more likely to continue to strengthen than weaken.

Tenderers for the pair EUR/USD in the economic calendar for the coming week does not appear important macroeconomic releases. Her movements will be determined by external background and technical analysis. On the wave of optimism that the universe of currency traders, Mr. Draghi, participants can move into the area 1.3270 quotes. However, for large-scale strengthening euro has no prerequisites.

British pound been strong after several reports of PMI. But it is his gain looks very fragile. Industrial production data on Tuesday April 9 at 12:30 GMT may all soon change. The industrial sector of «Albion» is now in a recession, so few positive surprises are likely. Quite the contrary. From technical point of view, the most important support level 1.5040 is seen. Overcome it against the negative background can cause a trend toward annual lows. With positive data to overcome 1.5350 will open the way to 1.5485.

The Australian dollar has lost none of its appeal. After testing the resistance of 1.0480 against its U.S. counterpart, he adjusted and again found support at the 200-day MA. To the level of 1.0330 the AUD/USD looks good for purchases in order to 1.0580. Below it, a further upward movement will be a question. Among the key economic releases is to provide only the report on the labor market in Australia, 11 April at 05.30 GMT.

The Japanese yen has the potential to resume falling against the dollar after the amount of quantitative easing exceeded the expectations of the foreign exchange market. «Abenomika» continues to wind inflation expectations. The Bank of Japan has worked to «excellent.» Expect impulse towards 100 yen per dollar.


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Market Review for the week from 1 to 5 April | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners