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26 March Forex daily review

Sergiy Zlyvko
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On Wednesday trading on the dollar index ended virtually unchanged because the major pairs showed a mixed trend. The single currency and the Swiss franc closed lower against the U.S. dollar, British pound and Australian dollar – higher.

Dollar yesterday received support from orders index for durable goods and service index of business activity in the U.S., but the impact on the market was weaker than the news. At 9.30 GMT UK is to publish a report on retail sales for February. At 12.30 GMT in the U.S. final GDP data for the fourth quarter (forecast 2.7% q/q) will be published and a report on the number of initial applications for unemployment benefits. Today we’ll look at the dollar’s decline as indicators on higher timeframes are still unsuccessfully for its purchases. Current rate is 80.00.

EURUSD in the U.S. session was reduced to the level of 1.3755. Despite the growth of European stock markets, the pressure on the euro came from statements made by the ECB about the undesirability of the strong euro and its sales in the cross pairs.

ECB Governing Council member Weidmann argues that in order to curb the growth of the euro, negative interest rates on deposits may be entered. Linde announced the readiness of ECB to adopt appropriate measures in case of deflationary risks increasing. As a result, the euro declines across the market, the pound strengthened.

EURUSD stabilized at around 1.3790 mark. Price range of the consolidation is 125 points. By the time the pair is ready to get out of range, but the growth of AUDUSD and GBPUSD protect the lower boundary of the channel and constrain EURUSD from falling. Most likely, twitching movements in the euro remain until the ECB meeting, which is scheduled for April 3.

Current exchange rate is 1.3755. Bulls are trying to pass a mini resistance now, which is projected from the tops of 1.3845 and 1.3875. Given that the struggle is near 1.3810 line, so the level of the euro is expected to accelerate to 1.3850. Now everything depends on crosses. We prepare for the growth of the euro, hoping for a correction in the crosses.

British pound justified expectations. Powered by EURGBP ally, GBPUSD broke through trend line corrective movement (bullish signal on Thursday). Pound does not roll back and traded at 1.6580. Today we expect to rise to 1.6630 mark. From 1.6630 we consider lowering that should continue on Friday by pricing model.

On Wednesday, after a morning speech of Stevens (RBA), AUDUSD exchange rate to the U.S. session rose to 0.9245. Stevens said nothing for a high Australian dollar and this benefited buyers. Current exchange rate is 0.9239. Divergence between stock and the price is not, so we think before correction AUDUSD will update highs. According to our calculations, this level can be at 0.9260.

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