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AUD surges after RBA; EUR/USD back below 1.10

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The greenback traded mixed against its G10 peers during the European morning, since the meagre fundamental news out yesterday. The market yesterday has very soft trading since in many European countries, Switzerland, New Zealand and Australia is Easter Monday.

The biggest winner against the U.S. dollar was the Aussie as the Australia published yesterday their rate statement and their interest rate decision. The smallest gains possessed by NOK and CHF of 0.21% and 0.49% respectively.

Data just out in Australia, confirmed the prediction that RBA will leave the interest rates on hold at a record low of 2.25%. The oil prices are substantially lower than a year before and therefore Australia’s exports declined. The Balance of Trade in Australia is closing up with a deficit for the last eleven months. The AUDUSD surged 120 pips following the RBA decision to keep the cash rate unchanged at 2.25%.

Following the false break out below the key support level of 0.7560, the pair managed to overcome that level and to move above the psychological level of 0.7700. If the bulls manage to maintain the price above the latter level then the next test for the bulls, will be the significant zone of 0.7900 – 0.7940.

The shared currency dropped back below the psychological level of 1.1000 after reaching a weekly high at 1.1040. No any particular Eurozone economic reports were released yesterday because of the holiday in Europe and that kept the pair in a tight range slightly above the key support level of 1.0920, which includes the 200-period SMA on the 4-hour chart. The next event on the calendar for the euro traders will be the Eurogroup which will be holding a meeting on April 8 – 9.

The GBPUSD pair is also trading in a range between the 1.5000 and the 1.4740 levels. Few days ago the pound managed to surge above the 50-period SMA and the key resistance level of 1.4870, but the upward movement was halted by the strong resistance zone of 1.4990 – 1.5000. If the bulls fail to break above the psychological level of 1.5000 then I would expect the GBPUSD pair to remain in the aforementioned range ahead of the UK general elections.

Elsewhere, the USDJPY rebounded from the psychological level of 119.00 and is now testing the short-term descending trend line around the 119.70 level, ahead of tonight’s BoJ Monetary Policy Statement and Press Conference.

The Markit Services PMI print for March revealed that the expansion of US services sector accelerated. The indicator increased to 59.2 from 58.6 expected, worth watching as the services sector dominates a large part of the total GDP.

Markit Composite PMI is an important indicator of the overall economic condition in US. It has also increased in March, 59.2 vs 58.5 the previous month. Figures above 50.0 show a growth in the economy.

The Richard Ivey School of Business released the Ivey PMI yesterday that captures business conditions in Canada. The indicator for March inclined to 56.0 from 50.8 before, but the seasonally adjusted indicator dropped to 47.9 from 49.7.

U.S. stocks closed higher during yesterday’s session, rebounding from the losses on the disappointing jobs report which the US employers added fewest number of jobs in more than a year in March. The Dow Jones Industrial Average rose by +0.66%, the NASDAQ rose by +0.62% and the S&P500 added 0.66% to its value.

Economic Indicators

Today, the Markit Services PMIs for Germany, UK, France, Italy, Spain and Eurozone as a whole are coming out, as well as the Markit Composite PMIs for some of them. All of them are forecasted to remain the same except in UK where the Markit Services PMI is expected to increase slightly to 57.0 from 56.7. Readings above 50.0 show expansion on the countries’ economies.

In Eurozone, the Markit Services PMI is above 50.0 from mid-2013 as well as the GDP growth. The Service sector is a large part of the economy expansion. For March, the market forecast is to be the same as for February, 54.3.

The US Bureau of Labor Statistics will share with us the results of the JOLTS Job Openings Survey for February. Furthermore, the Fed will release the Consumer Credit Change for February, a display if the consumers can afford large expenses.

Overnight, Bank of Japan will release the Monetary Policy Statement followed by a Press Conference. In the Early European morning, Eco Watchers Survey showing the short-term economic trends in Japan is scheduled to be published.

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