2 April Forex daily review
On Wednesday, after trading dollar index closed with an increase. EURUSD, USDCHF and dollar index were fluctuating perfectly according to forecast scenarios. GBPUSD was unable to achieve the estimated target as customers have been provided by good support from EURGBP cross-rate reduction.
Today is saturated by the news. So, the key event will be Thursday’s ECB meeting and press conference of Mario Draghi. Euro’s decline to 1.3750 yesterday confirmed that bulls fear that the ECB on the meeting will take new measures to ease monetary policy.
Preliminary PMI index for the services sector in the EU will be published in the afternoon. According to the forecasts, it is expected that performance will not change and will coincide with the values for the last month. Given that most of the manufacturing PMI came in below expectations, it is better to be prepared for negative statistics.
The dollar index yesterday rose to the upper limit of the horizontal channel, so on European trading session we see the breakdown of resistance – 80.30. You probably thought, why do we consider the rise of the dollar with one scenario, if PMI indices may go better than expected? They can, of course, there will not argue, but as a trump card we have yesterday’s data on factory orders and ADP.
The number of jobs in the private sector (ADP employment) in the U.S. in March was at 191 thousand (195 thousand was forecast, the previous value of 139 thousand). Figure fell shortly of the forecast of 4 thousand, but it came out great, about 200 thousand in the run-up. Before Friday’s NFP it is very important.
Factory Orders in the U.S. in February was +1.6% (forecast +0.5%, previous -0.7%). Actual value exceeded the forecast three times. It is strong factor for the continued growth of the dollar.
Today we would like to see the dollar index at 80.75 points. If the ECB will take new measures to ease monetary policy and the ISM index in the services sector will not disappoint the market, index accounted for 53.5 and more, we think, there will be no problems in reaching the level of 80.75 buyers will not have. If the ECB will leave monetary policy unchanged, the euro strengthened, the dollar will fall. Then after a strong ISM index publication, we would expect a bounce up for dollar index.
EURUSD fell to 1.3750 according to the forecast. Expected rebound from 1.3760 is stronger, but the pair is consolidating at this level for 13 hours. Stochastic Oscillator is in buying area. If we do not follow break down, it will rebound to 1.3785 mark. We saw this script, but so far we hope for a breakthrough.
Crosses were not help for AUDUSD to decline to 0.9280. This morning, the rate was reduced by weak statistics on Australia to 0.9210 level. Already there is a new low – 0.9205.
Before go down, EURUSD updated highest point of the week. USDCHF rate has not updated the minimum. According to the forecast it dropped to 0.8820 mark and to the closure of the European session it was trading at the level of 0.8870 already. Perhaps we are wrong in using the stochastic, but we are considering the growth of USDCHF to 0.8920 level.
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