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10 March Forex daily review

Sergiy Zlyvko
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On Monday, British pound suffered heaviest losses against the U.S. dollar. In the absence of news background, the rate of GBPUSD fell by 100 points to 1.6620. Pound has been sold throughout the market and provoked the drop of EURGBP cross-rate.

One of the reasons for the fall of the pound could be information on the Vodafone deal with Ono. It became known about possible deal in late January this year. Vodafone 7 billion euro for all the shares, but sellers found this amount insufficient. On March 13 at Ono shareholders meeting Vodafone representatives should announce a new proposal.

The performance of the deputy of the Bank of England Charlie Bean was another negative factor for the pound. He said that if the British pound will continue to grow, interest rates will remain at the same levels for a longer time. Decline of the pound was stopped at 1.6620. EURUSD walked in the main scenario and is now trading at 1.3860. The dollar index went back to 79.75. Hourly indicators are in the neutral zone, so the activity of the bulls will be needed from the opening of the European session.

UK today at 9.30 GMT will publish report on industrial production. We expect good data. At the same time, the report will start from hearings on the issues of inflation and the speech of the Bank of England Governor Mark Carney. Carney still will act at 12.00 GMT. At these events the traders can shake the market.

EURUSD traded in the main scenario and is now trading at 1.3860. The main scenario for Tuesday we consider the drop to 1.3825. We repeat that today a key role in the direction of EURUSD and GBPUSD pair will play EURGBP cross-rate. Crosses often give mixed cards and are difficult to be taken into account in the forecast.

The Australian dollar fell against most major currencies after on March negative statistics from the PRC was published. In February, China’s exports fell by the largest value since the beginning of the financial crisis. Index decreased y/y by 18.1%, while the experts had expected the growth of 7.5%. However, the real picture is quite difficult to evaluate because of the rather long New Year celebrations on the lunar calendar. AUDUSD fell from a high of 0.9130 to 0.9010. Now the pair moved to a correctional phase. As the resistance 0.9045 line and 0.9055 level will act. We expect the new fall of AUD to 0.9020 level.

USDCHF rate rebounded to 0.8795, but calculated target has not held slightly. At 9.11 GMT the pair is trading at 0.8785. We do not like stochastic here, which turned down the latest data. This indicates that the dollar may be under pressure for 4 hours. To continue the growth of the rate, bulls need to keep above 0.8770 line. Loss of 0.8765 support will reduce the rate to 0.8745. We stick the growth.

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