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30 April Forex daily review

Sergiy Zlyvko
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Weak U.S. GDP report with decent data on consumer prices and the Eurozone labor market in Germany pushed EURUSD to rise to 1.3875. In turn, the strengthening of the euro exchange rate has supported GBPUSD, which is close to the European trade recovered from the level of 1.6805 to 1.6900.

Traders were buying euro from the minimum of 1.3775, because after the publication of the preliminary values of the April CPI they believe that the ECB will refuse to take measures to ease monetary policy at the meeting in May.

Economic data in the U.S. was published mixed so before the Fed meeting it could not support the dollar. On the one hand, the number of jobs in the private sector and the index of business activity in Chicago exceeded predicted values. On the other hand, the index of GDP in the U.S. was published significantly worsen than prognosis. For 1st quarter of 2014, GDP grew by 0.1% q/q and 1.2% y/y vs. 1.2% q/q and 1.2% y/y.

By 18.00 GMT to the general weakening of the U.S. currency GBPUSD updated weekly maximum at 1.6900, EURUSD came close to the resistance at 1.3880. Results of Committee meeting on the U.S. Federal Open Market did not bring any surprises for the market participants. As expected, the Fed reduced the monthly bond purchases by 10 billion to 45 billion dollars. Key interest rates remained unchanged in the range of 0.00-0.25%.

As the market has already taken into account the reduction of the main program and the pairs passed 70-80 points before the announcement of the decision, but there was no response. Now all market participants’ attention is directed to a Friday report on the U.S. labor market.

There are two factors that will deter further weakening of the dollar. First, at 12.30 GMT Janet Yellen performs. Second, Europe rests – the market will be low liquid. We’re waiting for dollar’s decline in the opening because at 8.30 GMT PMI in Britain will be released. According to the forecast we expect the growth of the indicator. If the actual value will be lower than forecast, then the dollar will quickly regain yesterday’s losses. It would be ideal for tomorrow to see the main pairs at levels: EURUSD – 1.3840, GBPUSD – 1.6840, USDCHF – 0.8820.

EURUSD to the closing of the European session rose to 1.3875. Growth stopped at 1.3880 and bulls were preparing to check the strength of the resistance on 1.3900. We are for that on NFP (Non-Farm Payrolls) the pair remains below the 1.3900 level. Europe rests, so in the thin market harsh unpredictable movement may be today.

GBPUSD to the general weakening of the U.S. dollar broke important resistance at 1.6850. Now on daily timeframe bulls discovered target – 1.7070. In the afternoon at 8.30 GMT Britain will publish a report on the index of business activity in the manufacturing sector. We expect the growth in relation to the previous month. That’s why we’re in the main scenario considering the growth of the pound in European trading session. Britain celebrates May Day on May 5, so we expect high volatility of the pound in thin market.

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