Market Review for the week from 22 to 26 April

The U.S. dollar is almost not changed its position relative to key competitors, from 22 to 26 April. Index USDX, reflecting its behavior with respect to the six major currencies, fell by a slight 0.06% in the second half of the day on Friday, April 26 stood at 82.67. The main reserve currency of the world continues to feel much less confident than the previous month. Macroeconomic statistics from the U.S. are also deteriorating. This week brought an unpleasant surprise data on orders for durable goods. Coupled with sagging data from other leading and coincident indicators, they do not give reasons suggest the possibility of imminent collapse of the program QE3 by the Fed, and it puts pressure on the dollar.

The European currency spent a week in a relatively narrow corridor 1,2953-1,3093. PMI index data in the economies of France and Germany were mixed. Compared with the previous month, the French index added 1.8 percentage points, while Germany fell by 1.9 and slipped below the border to the recession level of 50% to 49.2%. In addition the participants gradually scaling back activity, waiting for the outcome of the ECB, which will be announced on Thursday, May 2. In the second half of the day on Friday, EUR/USD is quoted at 1.3015, which is 0.4% below the close of the previous week.

The British pound fluctuated in a very narrow range 1,5200-1,5290 in the first four days, but significantly strengthened its position after the release of positive data on GDP for the first quarter of 2013. Britain managed to avoid the technical definition of recession after the collapse of the previous quarter to 0.3% of the GDP grew by 0.3%. Currency market participants had expected the figure would be a plus of 0.1%, and therefore was quite a surprise and provoked strong buying sterling. For the week, he adds 1.3% and trading at 1.5420.

Australian dollar in the absence of important macroeconomic news continued to «digest» the events of last week. AUD/USD has fluctuated in the range 1,0220-1,0340 and has not been able to form any directional movement.

The Japanese yen has made another attempt to overcome the technically and psychologically important level of resistance of 100 yen to the dollar, but it failed again. The Bank of Japan following its last meeting has not made changes in monetary policy. He confirmed his intention to double the monetary base over the next two years, but not announced new incentives. On this background, the Japanese currency could feel some support and strengthen to the level of 98.60.

Forecast April 29 — May 3

The coming week will be the first week of the month, so be on the traditionally rich in key macroeconomic data and events from the U.S. that can have a significant impact on the dollar. On Wednesday, May 1 Open Market Committee Federal Reserve will announce the results of its regular meetings. In the accompanying statement, no significant changes are expected. After a significant improvement in the first months of 2013, the economic data is deteriorating again. Accordingly, the reasons for the changes in the monetary and credit policy at the American regulator is not. However, this event will be traditionally compel considerable attention, and any surprises could trigger a significant response.

Wednesday will see the light as data on PMI index in the industrial sector in the U.S., as well as labor market report from ADP Inc. And closes the week the Bureau of Labor Statistics figures on the number of new jobs in non-agricultural sectors of the economy and unemployment. Macroeconomic statistics from the U.S. recently wore a negative. Participants will now evaluate the rate of decline in economic activity for the duration of this trend. If the reports will be positive, then the dollar will have every chance to renew its pressure on competitors, and vice versa.

The main event of the week for the pair EUR/USD will be a regular meeting of the Governing Council of the European Central Bank. During his last press conference, Mario Draghi signaled that in his department can go to reduce the key rate if economic data continues to deteriorate. That’s what happened in April. Accordingly, a significant portion of foreign exchange market is laid on the fact that the regulator will step down by 0.25 percentage points, lowering the rate to reach 0.50%. We believe that the EUR/USD pair to trade in a narrow range during the first two days of the week. Then it will depend entirely on the dynamics of macroeconomic data from the United States and the outcome of meetings of both regulators. On Wednesday, May 1 in a number of eurozone countries (including France, Germany and Italy) as the output banking day.

Traders on the British pound a week will also be busy on important data. In the first three days of the month will provide data on Markit PMI indices in the main sectors of the UK economy — industry, construction and services sectors, respectively. All three will be released out into one and the same time. The situation in the UK economy remains grim. PMI indices in the past month were lower boundary for the recession mark of 50%. After the release of decent GDP report for the first quarter of positive changes here can improve the prospects for sterling. In that case he may move to a mark 1.5615. Otherwise, test the 1.52 support.

For the Australian dollar in the economic calendar for next week is not scheduled major releases and events. We believe that the AUD/USD pair will try to find the bottom in 1.02. In any case, its outlook is very uncertain, and it makes sense to refrain from bidding.

Japanese Yen seems intent to start a correction. USD/JPY has failed to overcome the mark of 100 yen to the dollar. If it «breaks through» support may be reduced to 98.60 96.60 area. On Monday and Friday in the country’s banking day weekend. The economic calendar of important events are scheduled.


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Market Review for the week from 22 to 26 April | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners