7 April Forex Daily Review
Under the pretext that NFP data was not strong enough for the Fed to the beginning of 2015 has gone on rising interest rates, the dollar index closed the day in the red zone. Yields on U.S. bonds fell, which negatively affected the dollar. The dollar index DXY, EURUSD and USDCHF worked forecasted scenarios (on the chart yesterday’s predictions returned).
The dollar returned back to the trend line at 80.20. This rollback was undesirable to buyers. European participants enough foothold below 80.10 and DXY index to fall to 79.90 key support. Accordingly, the euro and the pound strengthened against the dollar.
It so happened, that market participants would prefer to work on Monday against the U.S. dollar. Our expectations were met only in AUDUSD. Technical picture between on hourly and four-hourly time frame for the major currency pairs is mixed. We would venture to consider on Tuesday once again rise in the dollar, but there is no certainty that the dollar index will block the current level.
At 8.30 GMT in the UK the data on industrial production for February will be published. According to the forecast, it is expected the performance will be downward. Pairs with a pound can make the trigger for the sharp fluctuations on major currency pairs.
Our expectations regarding to reducing the euro fails. Against the growth of cross-rates, EURUSD rebounded to 1.3745 and passed on the inverted scenario. Correction to 1.3760 is admissible. Rise above the level of 1.3760 will only accelerate the growth of the euro as the pair bounces from daily trend line.
On Tuesday the important data is not scheduled for publication but the report on industrial production in the UK. Hourly indicators AO with CCI signal about the decline of the euro, so the forecast is expected to fall to 1.3700 for EURUSD.
The British pound rebounded to 1.6625 after easing pressure from EURGP cross. Price met resistance and we estimate the current level can be expected to drop the pound. At least with this arrangement of time indicators, we would not buy a pound. New growth may start from 1.6685 mark, but we expect to closing below this price level.
Euro and pound on Monday strengthened against the U.S. dollar, the Australian dollar lost ground. AUDUSD exchange rate rose on crosses to 0.9305, so yesterday because of them also fell. This point is very difficult to catch, as sometimes it is contrary to all the rules of technical and graphical analysis. Technical Analysis for us – is an analysis of indicators and graphical analysis – support/resistance levels, pricing models, etc. (tools which are not related to indicators).
According to the latest quotes, AUDUSD traded at 0.9290. In my analysis, the pair reached an intraday high and with the opening of Europe from the current level may begin to decline. We do not see the fall below 0.9255 but it would be desirable.
After Friday’s payrolls on Monday USDCHF rate fell to 0.8870. The bulls have lost control on the market. The situation is not critical, but there are risks to leave 0.8835 level.
Sorry. No data so far.