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14 April Forex daily review

Sergiy Zlyvko
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Mario Draghi’s statements, sounded over the weekend gave the dollar an upward momentum. After the publication of the American Statistical dollar index touched the highest point and moved sideways.

Index of retail sales in the U.S. in March was 1.1% compared with a forecast of 0.8% and 0.7% of the previous value (revised from 0.3%). Retail sales index excluding auto sales was 0.7% vs. 0.5% expected and 0.3% – previous value. These values exceed the estimates and support the dollar bulls today.

Mario Draghi expressed about the appreciation of the euro. Investors have heard and responded to the sales of the euros. On Monday, the euro fell by 70 points. The decline was not serious, but the rate dropped to 1.3780 and this gave confidence to sellers.

Today we would venture to consider another increase of the dollar index to a level of 80 points. For EURUSD the goal is 1.3785, for GBPUSD – 1.6660. At 8.30 GMT in the UK a report on consumer price inflation will be released. At 12.30 GMT in the U.S. the data on consumer inflation for March will be published. These events are important for Tuesday. They will perform a driver for the fluctuations of major pairs.

On Monday, EURUSD reached its calculated level of 1.3815. For seventeen hours, the euro was trading in a narrow range and in the European session we expect from it a breakdown of 1.3800 mark with subsequent fall to 1.3785. According to wave structure, we should have something similar to yesterday.

At 8.30 GMT the data on inflation in Britain will be published, so through EURGBP cross rate euro can swing in any direction, regardless of the technical analysis. Be vigilant. In the U.S. session the report on inflation in the United States will be published. If the euro will fall in the U.S. session, the movement should not be expected in the U.S. session. Market should wait for the news and start correction.

After updating the lowest point on the American session, GBPUSD rebounded to 1.6740 level. In Asia, the sellers are attempting to return to 1.6700. We do not know what the inflation data will be published in the report today, but we still consider the drop of the pound to support level on 1.6660. Hourly indicators are in the neutral zone and on British statistics the pair can move within 50 points in either way.

Crosses still able to support the Australian dollar. Demand was observed in AUDJPY, EURAUD, GBPAUD and AUDCHF pairs. In Asia, AUDUSD exchange rate back to the support at 0.9385 mark. It is believed that a few hours ago AUDUSD will stand on this support and after closing the Asian session we should expect a new wave of dollar’s buying. We pushed on Tuesday yesterday’s forecast. Target remains at 0.9450.

On Monday USDCHF rate updated highest point. Close was higher than the forecasted level, but for us it is not so important. We’ve got to wait for the pullback of stochastic oscillator to buying area. To do this, the rate dropped to 0.8790. If Europe immediately chase up the dollar, after closing in Asian session, USDCHF rate can dramatically turn down. My goal for USDCHF is at 0.8835 level.

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