What happened in Asia
Dollar and yen continued strengthening as safe havens early Asia, as Nikkei 225 Stock Average was down 2.7% in early afternoon trade, while other markets in the region also fell, following Wall Street’s close down. Usd/Jpy dipped briefly below the Y100.00 but could not hold it trough European session. Eur/Jpy also fell after these last days heavy appreciation.
What happened in Europe
German factory orders in February showed a fall of 3.5 percent on the month, compared with the consensus forecast for a monthly decline of 3.0 percent. Domestic orders fell by 5.7 percent, outpacing a drop in foreign orders, which fell by 1.3 percent, in a clear sign that not only foreign demand is hitting the German economy. This is the worst decline on record, leaving out of sight any chances of a quick upturn in one of the Euro zone strongest economy. Germany's trade surplus stood at EUR 8.7 billion in February, up from EUR 7 billion surplus recoded in the previous month; better than the expected surplus of EUR 7.5 billion, but fur less of a year ago trade surplus of EUR 17.1 billion.
In England, annual shop price inflation rose to 2.0 percent March from 1.9 percent in February, after falling to 0.5 percent in December, but picked up this year on the back of higher food prices. Food price inflation remained steady at 9.0 percent in March while non-food price inflation came in at -1.5 percent from -1.7 percent.
What to expect:
The Bank of England has the monthly meeting scheduled for today and tomorrow, and they are likely to hold steady, announcing no new action for the first time n seven months, after lowering its key interest rate to an historical low of 0.5%, and injecting £75 billion in new money into the economy by buying government bonds and some corporate debt.
Oil fell for a fourth day, its longest losing streak since February, on swelling U.S. crude stockpiles, tumbling equities and a stronger dollar. Inventories, are expected to climb to a 15-year high
Be aware, currency markets will become less liquid, and potentially more volatile, ahead of the Easter holiday.
Later today in the American session, the FOMC while release the minutes of their last minutes, when it announced it would buy $300 billion in Treasury securities, as well as increase its purchases of mortgage-backed securities to $1.25 trillion from $500 billion. Minutes could explain, or not, how members of the central bank came to that decision, but whatever the FED says, one thing remains clear: their economic outlook had been marked down significantly since last January.
Eur/Usd overview
Longer term perspective in the pair remains uncertain from a technical perspective, as the pair has been consolidating between 1.3100/1.3700 for almost a month. The economic outlook of both economies remains dark, but seems the U.S. has more chances at this point, to leave the recession first. Rumors of an ECB intervention to keep their currency low also affect the cross, that in daily charts regain bearish strength: price remains under the 200 EMA that acts as dynamic resistance at 1.3590 far from actual price. Today’s candle managed to open under the 20 SMA, a close near today’s low will turn the inclination to the downside and support a bearish continuation from here. Anyway, price should move under the 1.3100/50 zone, to gain momentum in that direction. For the rest of the day and turning to 4 hours charts, pair seems a bit over bought; bearish trend could resume after a short lived upside correction. Consider supports at 1.3200, 1.3147 today’s low and then the 1.3100 zone. Resistances will be at 1.3266, 1.3290 and 1.3340 zone.
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