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16 April Forex daily review

Sergiy Zlyvko
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The dollar index, EURUSD and USDCHF during the three trading sessions adhered to the basic scenario. GBPUSD rate has deviated from the forecast due to the strong labor market data in the UK. Its rise to the level of 1.6815 changed the technical picture for other currency pairs. With high demand for the British pound, in crosses it managed in the U.S. session to hold above 1.6780 and after fifteen hour flat the market in trading in Asia updated yesterday’s highest level.

American statistics was published mixed. Industrial production was higher than the previous value and forecasts, while a report on the number of new home construction in the U.S. fell shortly of the forecast.

U.S. Federal Reserve Chairman Yellen yesterday said nothing new. She repeated the text of FOMC minutes, the U.S. economy is recovering and it requires support in the form of low interest rates. The labor market is recovering slowly, so the U.S. Federal Reserve will not rush to raise interest rates. She didn’t say anything about six month term.

Asian market participants this morning were selling the U.S. dollar. If the flat was in Asian session, then on Thursday a rising dollar will be considered. In the current situation, we chose DXY index decreased to 79.50 and in the afternoon of his return to 79.80 mark.

We analyzed EURGBP cross rate. We should expect an upward correction for EURGBP. If we’re not mistaken with the correction, so amid the general decline of the dollar, pound will be under pressure and the euro will be supported. Because the news from Britain was positive, the pound will attempt to move higher. We are not waiting sharp fall of the dollar without the news since the eve of the Easter holiday, many market participants in the evening will cover short dollar positions.

On Wednesday, EURUSD rose to 1.3850 and fell to 1.3805 as expected in the main scenario. GBPUSD by its yesterday’s growth without rollback today makes me consider the growth of the euro. EURGBP cross rate overdue a correction, so the growth of the pound should be weaker than in EURUSD. Our scenario will only work if we’re not mistaken with the direction of the dollar. At 8.00 GMT EURUSD was trading at 1.3840. On the main scenario we expected EURUSD to rise to 1.3880 level and returns to 1.3820 before Good Friday.

On Wednesday, the British pound strengthened against the U.S. dollar on strong data on the labor market in the UK. In Asia, the pound advanced to 1.6835. There is no divergence between the indicator and stock price, so when the level of 1.6855 is achieved, we expect the pullback to 1.6795. There are no news today, so before Good Friday it is unlikely to go away far up.

With a minimum of 0.9330 AUDUSD exchange rate returned to the line 0.9370. The general mood in the first half of the day is negative relative to the dollar, so we are considering this pair to increase to the resistance to AUDUSD 0.9405.

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