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9 April Forex Daily Review

Sergiy Zlyvko
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According to Wednesday results, dollar index after the publication of FOMC minutes updated minimum. The minutes of the March meeting of the Federal Open Market Committee (FOMC) on March 18-19, the Fed discussed keeping interest rates low and there was no mention of their increase at the end of six months after completion of quantitative easing program.

Regulator noted an improvement in the economy and the labour market and refused to bind its policy to unemployment. Now, when making a decision about a possible rate hike, FOMC members will consider a wide range of economic indicators. Several members expressed concern that inflation for several years to reach 2%.

Failure to confirm the six-month period, voiced by Janet Yellen on March 19 at a press conference after a meeting of the U.S. Federal Reserve and the mention of inflation risks, triggered a new wave of dollar sales in the currency market.

EURUSD rose to 1.3855 mark. GBPUSD rose to 1.6800. In Asia, the dollar’s decline continued on strong employment data in Australia. Euro and pound strengthened against the dollar to 1.3870 level and 1.6820 following AUDUSD.

After three days of the fall of the dollar on Thursday until 11.00 GMT we expect from the major pairs corrective movement (kickbacks). At this time, the Bank of England will announce its interest rate decision. The Bank of England is expected to leave rates unchanged at 0.5% and keep the amount of bond-buying program at 375 billion pounds. In the U.S. session the falling of the dollar may continue. On Friday we will have to consider a stronger dollar.

FOMC on minutes and data from Australia, EURUSD rose to 1.3870 mark. Now the pair moved to a correctional phase, which can last until 11.00 GMT. During this time, the AC and Stochastic indicators just unloaded. AO is more complicated. While the price is trading above the trend line at 1.3670, bulls will be active. As a support of today we can choose the level of 1.3810. It is likely to increase to 1.3900, but we were limited by the level of 1.3885.

On Tuesday, the pound was supported by data on industrial production. Yesterday it rose for on FOMC minutes. There is a divergence, but not the fact that pair would go for a correction. But at 11.00 Bank of England will announce the decision on interest rates. It is expected that the Central Bank will leave rates unchanged at 0.5% and keep the amount of bond-buying program at 375 billion pounds. Pound can be rolled back to 1.6770 by 11.00 GMT. We’re not going to consider a reversal of the pound and from 1.6770 we expect rebound to 1.6840. Fall below 1.6770 mark would break plans of the bulls and on Friday before the weekend we are going to consider the growth of the dollar to all currencies.

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