Wednesday, 6 March 2019
EUR / USD, GBP / USD, USD / JPY
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EUR / USD
The EUR / USD pair is trying to partially recover the losses of the previous trading days, but the opportunities for growth remain limited due to a number of important factors.
Firstly, today there will be no important statistical information from Europe on the market that could theoretically support the euro.
Secondly, tomorrow there should be a meeting of the ECB, in anticipation of which investors are unlikely to actively buy European currency, since most experts say that this meeting will not bring any positive news to the market. At best, the regulator will leave all the parameters of monetary policy unchanged. At worst, the ECB may announce a revision of its forecasts for 2019, as well as resume monetary stimulation of the economy.
Thirdly, the pressure on the European currency continues to exert uncertainty associated with the process of UK exit from the EU. Three weeks are left until Brexit, but it is not yet known how the exit will take place and whether it will take place on March 29.
Fourth, the American currency is putting pressure on the EUR / USD pair. The dollar index completes growth for five days in a row and maintains good opportunities to continue this trend. First of all, domestic statistics is supported by good data, which indicate a good state of the US economy.
Today in the US we expect to watch a monthly report from the ADP on employment, data on the trade balance and the "beige book" of the Fed. Comments on the FOMC members Williams and Mester may have a definite impact on trading.
On the graph for the day no major changes have occurred. Currency pair continues to move within the downward price channel, which in the coming days may receive its continuation. Now the currency pair is testing the intraday resistance level of 1.3110, from which the downward movement can be resumed. The medium-term goal for bears is the 1.1200 mark. If the level of 1.1310 is broken, then in the first half of the day you should count on a stronger corrective pullback to 1.1340, where you should again look for sell signals.
Our recommendations: shorts from 1.1310
GBP / USD
The pair GBP / USD has also been experiencing certain difficulties in recent days with the background of the global strengthening of the dollar and the lack of positive news on Brexit.
Yesterday the UK published good data on the PMI services sector, but the trading day for GBP / USD ended with a decline. Investors are selling a pound in anticipation of a vote in the UK Parliament, to be held next week. Since the British government has not yet managed to achieve concessions from the EU, the May plan is likely to be rejected by Parliament again. This means that the question of leaving the UK from the EU without an agreement will be put to the vote. Only if this option is not approved by the Parliament, on March 14 should a vote be taken on postponing the date of Brexit to a later date. This is the most likely scenario, but the problem is that the Brexit date prolongation does not solve the problem of the lack of agreement between the parties. The European side still insists on the impossibility of changing the parameters of the November agreement, while the UK wants to change the rules of regulation of the Irish border and to obtain additional legal guarantees from the EU. On the eve the British government announced that at the moment negotiations between the parties are continuing in three main areas: the development of an alternative agreement, changes in the political declaration and changes in the backstop regime.
The correctional movement continues on the chart and can be continued in the coming days. During yesterday's trading, in smaller time intervals, certain signals were formed that could indicate a price reversal upwards, but this scenario should only be seriously considered after the resistance breakdown at 1.3200. Until this happens, the priority is for shorts.
Our recommendations: shorts from 1.3180
USD / JPY
The pair USD / JPY rolled back after another unsuccessful attempt to overcome the level of 112.00.
The main support for quotations is still provided by the dynamics of the dollar index, which finished trading in positive gains the fifth day in a row.
On the other hand, at the beginning of this week, there are changes in investor sentiment in the stock markets, which have gone from growth to decline, on fears related to the prospects of the global economy. A series of weak statistics from China and Europe, at the end of last and beginning of this week, significantly reduced investor interest in risk, which helps to restore the level of demand for the Japanese yen. Investors are also negatively aware of the lack of new information on the course of trade negotiations between the US and China. Having this background, we see a slowdown in the bullish trend for the USD / JPY pair and the formation of strong local signals indicating a possible development of the corrective movement.
Today, the focus of investors will be statistics from the United States and the dynamics of stock indices.
On the chart yesterday, a strong reversal signal was formed in the form of a false breakdown of the level of 112.00. Accordingly, despite the medium-term dominance of the bullish trend, we give local priority to the scenario with the development of a correctional wave, the immediate target for which is the level of 111.40. At the same time, in the medium term, one should not exclude the possibility of reducing quotations to the level of 110.80. It is necessary to expect growth to continue only after consolidation above 112.00.
Our recommendations: shorts from 112.00.
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ReplyDeleteWrite My Economics Assignment the ADP on employment, data on the trade balance and the "beige book" of the Fed. Comments on the FOMC members Williams and Mester may have a definite impact on trading.
ReplyDeleteOn the graph for the day no major changes have occurred. Currency pair continues to move within the do.
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