Analysis and Opinion »

24 April Forex daily review

Sergiy Zlyvko
Share on StockTwits
Published on

On Thursday, EURUSD, USDCHF, AUDUSD and dollar index achieved targets yesterday. The sharp rebound in the dollar index from 79.95 today made us consider again the dollar’s decline over the market.

We are not sure whether the market today fulfills goal as AO indicator for the dollar index is in the negative zone. What does it mean? There is high probability that before the weekend market dynamics repeats Thursday. We did not dare to make a prediction on the pricing model on Thursday, as the cross rates with the euro and the pound give conflicting signals. The dollar index traded sideways for 9 days – it’s time to get out of range 79.60-80.00.

EURUSD reached a lowest point at 1.3790 and returned back to 1.3830. Eleven days pair traded in a narrow range. Although indicators contradict my main scenario, we expect the euro to rise to 1.3880 mark and closing the day at 1.3850 area. Bulls ignored Mario Draghi’s statements, but we think this is temporary.

Macro data for the euro is not scheduled, so we recommend to follow the dynamics of EURGBP cross-rate. We expect the swing of cross-rate at 8.00 GMT when UK retail sales report for March will be published. Monthly indicator is expected to decrease by 0.4% and the annual growth to 3.8% (previous value of 1.7% and 3.7%).

GBPUSD rebounded from the level of 1.6765 and by the latest quotes, pair is trading at 1.6805. Since we expect the dollar to decline in the first half of the day, then increase of GBPUSD to 1.6860 mark with subsequent pullback to 1.6820.

AUDUSD rate fell to the level of 0.9250 by the main scenario. The target was at 0.9255. At 7.15 GMT the rate is 0.9265. On the main scenario amid against the background of dollar’s decline, we are waiting for AUDUSD rising to 0.9300 mark. If we’re wrong, then we can consider a scenario of double divergence and decrease to 0.9240.

USDCHF rate in the U.S. session has reached the level of 0.8855. By the way, currently the pair is trading at 0.8810. By the main scenario we are waiting for the roll back and fall to 0.8785 mark. We do not rule out the option that on Friday there will be similar pricing model as for yesterday.

Share on StockTwits