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23 April Forex daily review

Sergiy Zlyvko
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On Wednesday, dollar index, EURUSD and USDCHF were trading in the main scenario. GBPUSD fell after minutes of the Bank of England and weak industrial production data and could not recover before the closing of the day.

Euro exchange rate from the maximum, returned back from 1.3855 mark to 1.3810 and for eleven hours it is trading in a narrow range. Given yesterday’s drop of AUDUSD and GBPUSD, on European session, decline of the euro against the dollar should be considered. But for strong decline of the euro, EURGBP cross rate and yesterday’s weak sales report buildings in the U.S. create interference. Cross rate has grown dramatically and sales of new homes fell in March by 14.5% compared with the previous month up to 384 thousand homes on an annualized basis. According to revised data, in February it sold 449 thousand new homes, but not 440 thousand, as previously reported. The forecast was 450 thousand.

Among macroeconomic events Mario Draghi’s performance and several reports are in the center of attention today. At 8.00 GMT April IFO index of business confidence in Germany will be released and at 12.30 GMT in the U.S. will be announced March data on orders for durable goods and data on applications for unemployment benefits. At 9.00 GMT Mario Draghi will perform.

Although Stochastic Oscillator is already in the buying area, we are waiting the decline from dollar index to the level of 79.75 after rising to 79.90.

EURUSD back to 1.3815 mark and is now trading at 1.3825. Stochastic turned down, but on the eve of IFO, EURUSD may return to the level of 1.3845. But after the speech of Draghi, the pair may collapse. Yesterday bulls passed 1.3830, but since the price went back to 1.3810 mark, the resistance line now passes through 1.3845. I.e. they need to go back to the resistance. EURGBP cross rate under upward correction from the level of 0.8195 has not been completed. It should be another wave of new high. We were reinsured and from the main scenario of the euro, we are waiting for rise to 1.3845 mark and fall to 1.3795. For pound we get such a deal: to increase to the level of 1.6805 and fall to 1.6740.

British pound could not recover after yesterday’s fall. Decline of the pound stopped at 1.6760 mark. At 7.55 GMT pair is trading at 1.6785. There aren’t any news regarding the pound, but there are important events for the single currency, so the direction will be determined by EURGBP. Draghi has strong influence on the cross rate. If EURGBP cross rate drops that pound will rise to the level of 1.6800. During the day in the main scenario we forward the return to 1.6740.

From a minimum of 0.9265 mark, AUDUSD is in a corrective phase and is currently trading at 0.9280. We believe that the correction is over and in the European session we expect a turn down for the pair. According to the forecast, it forward to test 0.9255. AUD often behaves unpredictably, so watch out for Australian dollar crosses. If there will be change of mood in the crosses, AUDUSD exchange rate will easily revert to the level of 0.9340. It repeatedly unfolded without divergence upward by crosses.

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