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8 April Forex Daily Review

Sergiy Zlyvko
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ECB representatives have repeatedly stated that the strong euro hurting Eurozone’s economy. Bulls could care less about it and on Tuesday amid general weakness of the U.S. currency EURUSD rebounded to 1.3810 mark. British report on industrial production that exceeded forecasts of previous values was a trigged for a decrease of U.S. dollar.

EURUSD and GBPUSD strayed from their daily trend lines. GBP USD broke the maximum of 31 March at 1.6685 and the trend line drawn through the highs of 1.6820 and 1.6785. EURUSD rate was fixed above 1.3775 level. Trend line of downward corrective movement passes through this level, originating from a highest point of 1.3965 on March 13.

Break of 1.3775 and 1.6683 levels indicates a resumption of upward momentum in EURUSD and GBPUSD pairs. If you take the goal from day time frame, the closest target levels for the pound may be a mark 1.6800, for the euro – 1.3895. After the breakdown of significant levels, the market will check them for strength as supports.

On hourly timeframes on major pairs there is no divergence, so with the opening of the European session after 12-13-hour correction the dollar can grow. On dollar index we get 79.60 level. From it we consider the transition of the market in an upward corrective phase to two-day drop.

At 6.00 GMT a report on the trade balance of Germany will be released. It is expected that in February, Germany recorded a trade surplus of 17.8-18 billion euros against 17.2 billion euros a month earlier. At 8.30 GMT a report on foreign trade in Britain will be released also. It is expected that in February, the trade deficit decreased from -9.793 to -9.2 billion pounds. The key event for the currency market is the performance of U.S. Federal Reserve (18.00 GMT). Market participants interested in the answer of just one question, when the country will begin to raise interest rates.

On Monday and Tuesday, market moved against the basic scenarios and broke important levels. For me, technical picture remains mixed between time-frames and H4 and Daily, so today we will watch the market from the sidelines. It is not ruled out that after updating the minimum by dollar index, it can ricochet from 79.60.

Against the weakness of the U.S. dollar exchange rate, AUDUSD rebounded to 0.9365 and the pair has updated this morning to a maximum of 0.9380 mark. Swing from 0.9255 to 0.9380 is 125 points. That’s enough to go to a correctional phase. We consider updating the forecast maximum to 0.9390 level. There is no completion for upward wave for hourly indicators, although the conditions for correction perform amplitude deviation of prices and minimum of 0.9255.

Bulls could not keep the defense at 0.8870 mark. With the opening of the European session the U.S. dollar began to fall and strengthened after the publication of strong report on industrial production in Britain. USDCHF rate fell to 0.8825. At 8.45 GMT the rate is at 0.8835. Since yesterday the euro and pound on the daily chart were violated important price levels, then according to the main scenario for the first half of the day we are waiting to test the level of 0.8810.

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