The dollar extended losses after Commerce Department data

Good morning from Hamburg and welcome to our last Daily FX Report of the week. Yesterday, European leaders decided to triple funding for search-and-rescue operations aimed at migrant boats in the Mediterranean following crisis talks in Brussels. The EU will also look at ways to capture and destroy smugglers' boats and deploy immigration officers to non-EU countries, officials said. Several EU member states have promised more ships and other resources. The summit comes after more than 750 people died on a boat crossing from Libya on Sunday. The number of people fleeing war and poverty in the Middle East and Africa has risen sharply in recent months.

Anyway, we wish you a successful trading week!

Market Review – Fundamental Perspective

The dollar reached the lowest level in almost three weeks versus its major peers as rising U.S. jobless claims and weak housing data cast doubt on the nation’s economic outlook. The U.S. currency weakened after a report showed applications for unemployment benefits rose last week by 1000 to 295000 versus 287000 forecast. The dollar extended losses after Commerce Department data showed new home sales slumped more than expected in March, adding to evidence U.S. economy growth remains uneven. Federal Reserve policy makers want to see signs of growth and inflation on the rise before committing to the first interest rate increase in almost a decade. Now, after several weeks climbing, it seems the dollar rally is on pause as the market awaits more insight from the Fed. The currency also dropped against the euro the most in one week on speculations that Greece and its creditors will reach a deal to receive aid payments before the country runs out of money. The common currency also climbed against most of its major peers. The euro gained 0.7 percent to $1.082 as of 11:20 a.m. in New York, reaching the biggest gain since April 16. It also advanced 0.6 percent to 129.32 yen. The pound weakened 0.6 percent to 71.75 pence against the euro for the first time in four days, after a report showed retail sales unexpectedly fell in March. The Britain’s currency dropped the most in three weeks against the common currency. The pound was little changed versus the dollar after gaining Wednesday as minutes of the Bank of England’s latest policy meeting showed keeping interest rates at a record low was a “finely balanced” decision for a minority of officials. The Canadian dollar gained as crude oil continues climbing from its lows.

Technical Analysis

AUDUSD (Daily)

After seven month immerse in a clear downtrend channel where the Aussie has lost around 20 percent of its value against the dollar, the AUDUSD is trying a change of trend, even though it is still too early to say it is done. However, broken the mentioned bearish channel, the first step is done. Now the pair has to be able to break the resistance placed at 0.7938. If this happen, that would be a good signal that the bulls are taking the control. Below the current level, 0.7700 and especially the lows reached in March, are the closest supports.

Support & Resistance (Daily)