The global economy could contract by 1-2 % this year and is currently in the toughest environment since the World War Two and the 1930s; World Bank President Robert Zoellick told a newspaper.
Market review
On Thursday the JPY gained versus a basket of the most-traded currencies after the Cabinet Office said that Japan’s gross domestic product (GDP) shrank 3.2 % in the final three month of last year. Compare to the last forecast, the GDP data was a bit better than the market had expected. Today’s revision helped the JPY to reduce it’s almost 6.0 % decline against the USD since the government announced the preliminary GPP in February. The USD fell 0.8 % to 96.72 JPY after dropping 1.2 % on Wednesday. According to market estimate, the drop through the 97.00 level triggered further sell orders. The EUR/JPY decreased 0.5 % in the European and Asian session 0.5 %.
The NZD/USD climbed after its central bank cut interest rates less than the marked had expected. The New Zealand official cash rate is now at 3.0 %, but still at a record low. The NZD rose more than half a cent to $0.5134 after a decision and closed with a gain of 1.2 % on Wednesday. In Asia trading the currency was able to increase 1.2 % again.
The EUR/USD pair slid overnight to the 1.2615 level, but rallied in early NY trading to the 1.2815 level. On Wednesday the USD price action was primarily responsible for what happened throughout the Forex market because the Dollar index broke below critical support levels. Therefore, the GBP/USD gained 0.3 % in spite of weak trade deficit and bad export data.
GBP/USD
Since February, the GBP/USD has been trading in an bearish trend channel. In the last days the pair touched the lower line of the trend duct. Conspicuous is that it also touched the upper Pitchfork and the intersection of both geometric figures goes along with a MACD long signal. The MACD is going to cross the signal line from the bottom. Additionally, the lower trend line of the cannel seems to be a very strong support line.
EUR/USD
In March the EUR/USD rebounded from a low at 1.2458 and trades inside an upward trend channel. Today the currency pair touched the 61.8 % Fibonacci Retracement level at 1.2850. The EUR has been trading in an exemplary zigzag movement within the channel boundaries, there could be counter movement. This interpretation could be supported by the Momentum, which reached a period high.
