Monday, 4 March 2019

USD/JPY, GBP/USD, EUR/USD 04/03/2019

Posted by Anonymous at 14:33 Labels: ,

EUR / USD
The EUR / USD pair has started a new trading week with a decline amid a total absence of important economic and geopolitical news on the market. Apparently, the demand for European currency remains low as investors fear a further deterioration in the economic of the region. The preliminary data on inflation published last week showed a slowdown in the growth rate of the base consumer price index from 1.1% to 1.0%. This is a bad signal for the ECB, since with a low level of inflation, the regulator will not be able to start the process of gradual increase in interest rates, which was planned for autumn 2019. The differential in the level of interest rates in Europe and the US is likely to continue, and in the second half of this year it may increase even more, which makes the dollar a more attractive asset for long-term investments.
At the same time, local opportunities for strengthening the dollar also remain limited, because in the near future the Fed does not plan to raise interest rates, and the published statistics indicate a possible slowdown in US economic growth. Against the dollar are also playing geopolitical news. Positive investor expectations from ongoing trade negotiations between China and the United States reduce interest in the dollar as a defensive asset.
There are no important news events in the economic calendar today, so we should expect relatively calm trading and probably the recovery of quotations in the second half of the trading day.
On the chart, first of all, we note the breakdown of intermediate support at 1.1360. This movement has significantly reduced the opportunities for the resumption of growth of the currency pair in the direction of 1.1500 level. Now the closest strong support is at 1.1320 and from this level we can expect the formation of a rolling back movement to 1.1360, and possibly higher.
Our recommendations: longs from 1.1360.


GBP / USD
The pair GBP / USD is consolidating in a narrow range after an unsuccessful attempt by buyers to break through the support at 1.32, at the end of the last trading week.
Now on the market there is a certain informational vacuum, which is the main reason for the development of range on the chart. Investors have fully worked out all the important news that came last week and are now waiting for further developments related to Brexit. The British Prime Minister has one week to hold a new round of negotiations with the EU. Theresa May will try to change the specific terms of the agreement on the regulation of the Irish border after Brexit. At the same time, the main market expectations are related to the development of the scenario in which the country's parliament will decide to postpone Brexit to a later date. This decision is now supported by the majority of officials in both the United Kingdom and the EU.
PMI data for the construction sector has been published in the UK today. The figure went below market expectations, the fact of 49.5 points, the forecast was 50.5.
On the chart, the range continues, but in general, the currency pair retains very good opportunities for resuming upward movement. As previously, buyers managed to defend an important intermediate support area located between the levels of 1.3180-1.3200. Accordingly, it is now more likely to work out a scenario with an exit from the current consolidation upwards.
Our recommendations: longs from 1.3200



USD / JPY
The pair USD / JPY had a correctional swing down after an unsuccessful attempt to consolidate above the level of 112.00. At the end of last week, a strong dollar and positive investor sentiment in the stock markets provoked a strong increase in the USD / JPY pair. Now both these factors continue to support the price, but with the background of reaching 10-week trading highs, many investors began partial fixation of long positions profits, which contributes to the development of the corrective movement, that can now continue. But a strong decline is most likely not expected. Firstly, the dollar index is trading in positive territory today. Secondly, the positive dynamics of the movement of the main stock indices is maintained, which will have a negative impact on the Japanese yen.
This morning, the Bank of Japan and its head, Hirohiko Kuroda, were supported by Prime Minister of Japan Shinzo Abe. In particular, he said that he believes in the skill of Kuroda, who makes the right decisions in the implementation of monetary policy in a very difficult time for the country. Abe is still not going to influence the monetary policy of the bank, noting that only thanks to the competent actions of the regulator the country managed to avoid deflation. Kuroda himself noted that in the near future, the regulator intends to maintain a super-soft monetary policy.
On the chart, despite the local dominance of the bull trend, reversal signals appear.  We can see the development of the corrective movement in the direction of the level 111.40. The main guideline for us now is the level of 112.00 and the price reaction to this level. While trading is lower, shorts remain in priority.

Our recommendations: shorts from 112.00




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