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Dollar Recovered Against Rivals; UK GDP in Focus

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The greenback recovered Tuesday, after depreciating against most of its rivals during Monday’s session. The worst performing one was the AUD, which plunged after market’s speculation that the Reserve Bank of Australia will cut its key interest rate at their next meeting.

The AUDUSD fell below the key support level of 0.7640 during the US session and is now trading below both, the 50- and the 200-period SMAs, suggesting that that the pair remains bearish.

The euro saw a temporary downward correction during morning trading yesterday, despite the rise in Economic Sentiment and Consumer Confidence for Eurozone. The EURUSD pair failed to break above the key resistance level of 1.0920 and fell below the 50-period SMA on the 4-hour chart, currently testing the 1.0770 level (EUR/USD analysis

The pound also took losses during yesterday’s session despite the better-than-expected Gfk index of Consumer Confidence which came at 4 vs 2 expected. It’s remarkable that that the index rose to its highest level in more than 12 years. The GBPUSD pair is trading aback below the psychological level of 1.4800. If the pair remains below the latter level next support will be the 1.4725 barrier and then 1.4700.

In U.S. economic news, Personal Spending rose a weaker-than-expected by 0.1% in February, though Personal Incomes in February rose a better-than-expected 0.4% vs 0.3%. In addition, Pending Home Sales rose last month and reached their highest level, since June 2013. The news mentioned above had little impact on the USD.

Economic Indicators

Today, there is a heavy economic calendar, thus traders should be prepared for more volatility than usual. The focus of the world will be on the G7 Meeting which is scheduled. The finance ministers of the group of seven industrialized ministers meet several times in the year to discuss economic policies.

Early in the European morning, in Germany, the spotlight of the day will be the release of the Unemployment Change and the Unemployment Rate seasonally adjusted for March. The consensus for the Unemployment Change is to improve to -12k from -20k before and for the Unemployment rate to remain the same as February at 6.5%. Retail Sales are expected to be published and to have slowed down in February to 3.7% yoy from 5.3% yoy before.

In UK, investors will keenly eye the GDP figures for the fourth quarter of 2014. The market expects UK economy to have advanced by 2.7%, on a yearly basis, the fastest growth in almost eight years.

In Eurozone, the preliminary Inflation Rate is forecasted to show that in March the prices of goods and services have decreased by 0.1% yoy from a decrease by 0.3% yoy the previous month. Basically, the market expects an improved deflation rate for the second time in a row. The unemployment rate for February will also attract some of the attention even if the market’s consensus come true and the indicator has remained at 11.2%.

In US, investors will keenly eye the Consumer Confidence for March. The morale among the investors is expected to have decreased slightly to 96.0 from 96.4 in February. Canada’s Gross Domestic Product is expected to release and to show a decline of -0.2% mom versus the expansion of 0.3% mom prior.

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