Yesterday’s Trading:
On Monday the euro/dollar restored to 1.1279 (45th degree) due to a general weakening of the dollar. The euro strengthened against the USD despite it weakening against the GBP. The pound was generating demand since, according to recent surveys, the likelihood of the UK leaving the EU has fallen below 30%.
Weak data on the US housing market came out during the American session. In Mach, sales of new homes in the US had fallen by 1.5% (forecasted: 1.0%, previous reassessed from 2.0% to -0.4%).
Market Expectations:
The euro/dollar has spent the last 12 hours trading in a narrow range near the balance line. The current flat is playing into the buyers hands since the euro/pound cross is beginning to correct after yesterday’s fall, thereby allowing it to strengthen against the US dollar. Since the pound/dollar’s upward movement is burning out, the euro has a chance to reach 1.13. This is what I reckon will happen.
Market participant attention is on the results of the US Fed open market meeting. We will know the score on Wednesday. No change in interest rates is expected. The Fed’s assessment of the global economy and their further plans for monetary policy will be important for traders.
Day’s News (EET):
-
11:30, UK data on March mortgage approvals from BBA;
-
15:30, March durable goods orders in US;
-
15:55, BoC’s Poloz to speak;
-
16:00, US housing price index for February from S&P/CS (weak indicator);
-
16:45, US preliminary April service sector business activity index;
-
17:00, US April consumer confidence and Richmond Fed’s April manufacturing activity index;
-
20:00, BoE’s Cunliffe to speak;
-
23:35, API’s report on US oil reserves for this week.
Technical Analysis:
I would rather the euro not lift above 1.1279. In this case the day pinbar for 21st April would be put in jeopardy. The sellers need to close the day below 1.1268. In my forecast I’ve gone for an intraday /\ pattern. The lower the closing price, the stronger the sellers will be. A close of the euro above 1.1305 means we can forget about a weakening of the euro and the pinbar.
Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review
Recommended Content
Editors’ Picks
EUR/USD hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD retreats below 1.2550 as USD recovers
GBP/USD stays under modest bearish pressure and trades below 1.2550 in the European session on Tuesday. The cautious market stance helps the USD hold its ground and doesn't allow the pair to regain its traction. The Bank of England will announce policy decisions on Thursday.
Gold declines below $2,320 amid renewed US Dollar demand
Gold trades in negative territory below $2,320 as the souring mood allows the USD to find demand on Tuesday. Nevertheless, the benchmark 10-year US Treasury bond yield stays below 4.5% and helps XAU/USD limit its losses.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.