Daily F.X. Analysis, April 02 – Top Trade Setups In Forex – U.S. Jobless Claims Shares the Stage

On the forex front, the ICE U.S. Dollar Index rose 0.5% on the day, to 99.47, supported by weak but better-than-expected U.S. economic data. On Thursday, the eyes will remain on the European Commission, which is due to report February January PPI (-0.8% on year expected). In the U.K., the Nationwide Building Society will publish its house price index for March (flat on month expected). 

The U.S. Labor Department will post initial jobless claims in the week ended March 28 (3.5 million expected). The Commerce Department will report February trade balance (40 billion dollars deficit expected), factory orders (+0.2% on month expected), and final readings of durable goods orders (+1.2% on month expected).

Economic Events to Watch Today     

 

 

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EUR/USD – Daily Analysis

The EUR/USD slid 0.7% to 1.0952. Official data showed that the eurozone’s jobless rate fell to 7.3 in February (7.4% expected and in February), while German retail sales grew 1.2% on the month (+0.1% estimated). 

Overall, the market is lacking trading volume and volatility, but the focus will remain on the European economic events. The European Commission will report February January PPI (-0.8% on year expected).

The market risk-off sentiment could more worsen if the U.S. initial jobless claims ignore past expectations, which will send the EUR/USD currency pair to the fresh lowest level. 

Besides the weekly data, the EUR/USD currency pair will likely take clues from the U.S. trade balance and factory orders, which both are scheduled to release during the North American trading hours. The European data calendar seem empty with just Eurozone Producer Price Index, due for release at 09:00 GMT. 

Daily Support and Resistance

• S1 1.0772
• S2 1.0886
• S3 1.0958

Pivot Point 1.0999

• R1 1.1071
• R2 1.1112
• R3 1.1226

EUR/USD– Trading Tips

On Thursday, the EUR/USD is trading bearish at 1.097, having an immediate support level of around 1.0910. On the 4-hour chart, the EUR/USD has violated the support level of 1.0965, which is now working as a resistance. The horizontal breakout support may drive the selling trend in the EUR/USD pair until 1.0845. On the higher side, the EUR/USD pair is facing resistance at 1.1050 area. Bullish crossover of 1.1050 area can open further room for buying until 1.1145 level. Let’s consider taking selling trades below 1.0960 today.

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GBP/USD– Daily Analysis

The GBP/USD lost 0.3% to 1.2382. Yesterday, Sterling surged as traders reconciled their portfolios before the end of the first quarter of 2020, although analysts said the currency remained fragile. While than expected, economic events throughout the first quarter continued to weigh on the market’s risk-tone during the early Asian session.

The virus forced the global rating agency Fitch towards taking action on the eighteen United Kingdom Banking sector to reflect the downside risks to their credit profiles. To control the deadly disease, the British policymakers ordered almost 2-million testing kits from China; half of them will come this week, whereas officials are still evaluating the accuracy of kits.

Whereas, Wall Street dropped 4% because President Trump already gave warning to the USA about the painful two weeks ahead. Although, the White House expected that the coronavirus pandemic could take 100,000 to 240,000 lives, even if the U.S. follows social distancing guidelines. 

While the U.S. cases crossed the 200,000 marks, moreover, the Fed also took measures to keep large banks liquid. Looking forward, the U.S. and the U.K. government’s respective policy measures to control the disease will be the major event to watch for near-term direction; the U.S. Jobless Claims will also be essential to watch. 

Later in the day, the U.S. initial jobless claims are scheduled to release at 12:30 GMT. After a record, 3.283 million claims in the week to March 21, the Bloomberg median forecast is for an even more stunning 3.70 million claims were lodged this week. Continuing claims for the week to March 21 are seen jumping from 1.8mn to 4.94mn, which is causing a surge in the safe-haven appeal.

Daily Support and Resistance

• S1 1.217
• S2 1.2278
• S3 1.2334

Pivot Point 1.2387

• R1 1.2443
• R2 1.2495
• R3 1.2604

GBP/USD– Trading Tip

The GBP/USD trade sideways in between the same trading range of 1.2275 – 1.2425. On the 4 hour timeframe, the cable has formed neutral candles as we may not see further trends until and unless the pair manages to come out of this narrow range. For that reason, the pair needs a solid fundamental reason, which we are not expecting from the United Kingdom today. Let’s see if U.S. claims help drive some price action in the market. 

On the 4-hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

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USD/JPY – Daily Analysis

The USD/JPY is flashing green but reversed almost 30 pips from the early Asian high level. The pair is still struggling to hold its gain above 107.00 due to the greenback, which is exhibiting a fresh mild weakness after moderate recovery in the equity market. However, the slight improvement in the global risk sentiment also weakened the safe-haven Japanese yen and provided some lift to the pair during the early part of Thursday. 

At this moment, the USD/JPY is trading at 107.22 and consolidates in the range between the 107.06 – 107.57. Where, the intensifying fears regarding the economic recession from the coronavirus pandemic and a recent decline in the U.S. Treasury bond yields capped further gains in the pair, instead prompted some fresh selling at higher levels.

On the other hand, Tokyo also reporting a record hit in daily coronavirus (COVID-19) cases extended school holidays through May 06. Recently, Japan’s Economy Minister Nishimura said that we would consider support for production rise and adopting of ECMO as part of the economic plans to combat from the COVID-19.

Daily Support and Resistance

• S1 105.37
• S2 106.64
• S3 107.08

Pivot Point 107.91

• R1 108.35
• R2 109.17
• R3 110.44

USD/JPY – Trading Tips

The USD/JPY is trading at 107.270, consolidating sideways, right above an immediate support level of 107. The USD/JPY’s trading range has narrowed further as it continues to trade within 107.600 – 106.900. We see neutral candles, which may trigger a breakout at any side of the market. But the bullish breakout of 108.650 resistance level can lead the USD/JPY prices higher towards 109.750 level. Until then, we should look for doing choppy trading by selling below 108.600 and buying over 107.250. Below 107.200, the next support will stay around 105.990. All the best for today!