27 March Forex daily review
On Thursday, the dollar index closed with a slight increase. Today was the last day of the week with breaking the range to be expected. Our expectations to reduce the index to 79.70 did not materialize. EURUSD fell, GBPUSD rose, as a result the index turned sideways.
U.S. data had little effect on the foreign exchange market. According to the data, the number of initial claims for jobless benefits in the week 16-22 March fell by 10 thousand to 311 thousand (forecast was 325 thousand, previous revised from 320 thousand to 321 thousand) in the 4th quarter of 2013 GDP was 2.6%, which was lower than the previous value of 2.7%.
The dollar index is trading in Asia at 80.10. Stochastic is in the area of buying. This is great place to start. With a good rebound from the support line and 80.05 mark, bulls will easily pierce the resistance as DXY index the whole week is trading sideways.
There are scheduled on Friday: at 9.30 GMT final data on the change in GDP and UK balance of payments in the 4th quarter. At last report, there was almost no reaction, although the annual rate fell by 0.1%. At 10.00 GMT consumer confidence in the Eurozone will be published; At 12.30 GMT report on personal income and spending of U.S. citizens in February will be presented. Both indicators are expected to grow by 0.3% m/m at 13.00 GMT released preliminary consumer price inflation in Germany in March. At 13.55 GMT final index of consumer confidence from the University of Michigan will be released, which according to the expectations of the market was 80.6 points compared with a preliminary estimate of 79.9 points.
Euro was selling on fears that the ECB on March 3 will decide on the introduction of negative interest rates on deposits. Considering this factor, as well as achieving by AUDUSD and GBPUSD pairs significant levels, we would venture to consider today a sharp rise of the dollar. In the case of the breakdown of the index level of 79.95, all scenarios will be canceled.
Bulls could not break through the trend line. Crosses crushed EURUSD again yesterday. At this time, EURUSD to the closing of the European session fell to 1.3730. Support at 1.3750 was broken after strong retail sales report in the UK.
On strong retail sales in the UK GBPUSD hit 1.6645 mark. There is divergence between AO and the price. Apparently, there is a new high and then we should wait for the pound falling to 1.6565. On Friday we put on the dollar, as the dollar index was hammered and ready to come out of the triangle. GBPUSD and EURUSD show mixed trends, so there is difficulty in determining the direction of the break shot.
On Thursday, the AUDUSD exchange rate reached calculated level on the U.S. session. Today in Asia, the Australian dollar advanced to 0.9295. We believe that the Australian dollar to the U.S. dollar will reach significant level of price and it is risky now to buy the pair. At any time partial profit taking before the weekend can begin, which will lead to a dramatic reduction of AUDUSD.
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