Daily F.X. Analysis, April 03 – Top Trade Setups In Forex – U.S. Labor Market In Highlights! 

On the forex front, the U.S. dollar strengthened against its major peers, with the ICE Dollar Index climbing 0.6% on the day to 100.10. Today’s eyes will be on the Markit that will publish final readings of March Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected) and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD sank 1.1% to 1.0845, posting a four-day decline. Later today, the eurozone’s retail sales data for February will be reported (+0.1% on month expected). 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).

Italy is showing some signs of slowing down in the virus cases despite this the market traders already priced in a recession in the Europan economy, especially in Germany, because the circumstances in Spain continue to rise very fast. The lockdown across Europe continues to weigh on economic activities.

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 

Looking forward, the USD moves will continue to play a significant role, as attention shifts to the Euro area Final Services PMI report. Services PMI for the eurozone (28.2 expected), Germany (34.2 expected), France (29.0 expected), the U.K. (34.8 expected), and the U.S. (38.5 expected). The European Commission will post February retail sales (+0.1% on month expected). 

Most importantly, the U.S. Non-Farm Payrolls and ISM Non-manufacturing PMI data are scheduled to release later this Friday. The coronavirus related headline could also drag attention.

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

The EUR/USD is trading bearish at 1.090, having an immediate support level of around 1.07990. On the 8-hour timeframe, the EUR/USD has violated the support level of 1.085, which is now working as a resistance. Now, a bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650. 

The MACD has also crossed below 0, confirming the chances of more bearish movements in the market. The 50 EMA is also keeping the EUR/USD in a selling mode. For now, the eyes will remain on the U.S. NFP figures to determine further trends in the market. Bearish crossover of 1.1050 area can open further room for selling until 1.065 level. Let’s consider taking selling trades below 1.07990 today.

GBP/USD– Daily Analysis

The GBP/USD edged up 0.1% to 1.2390. The United Kingdom politics are getting warm after the voting to replace the opposition Labour Party leader Jeremy Corbyn closes. Moreover, the top U.K. judge gave warning that the British judiciary system will take hints from the European rules unless last Brexit-day.

As per the latest report, the coronavirus cases rose to 33,718 as of 08:00 GMT on April 02, whereas there was a 24% rise in the death toll to 2,921 at the same time.

Meanwhile, the Washington Governor extended the stay-at-home order, whereas S&P declared its U.S. rating at AA+ with expectations of a recovery in 2021. As in result, the market’s risk-tone remains moderately heavy with the U.S. 10-year treasury yields dropped below 0.60%, and most Asian stocks are also flashing red.

The U.S. Labor Department will release March nonfarm payrolls report (-100,000 jobs, jobless rate at 3.8% expected). The Institute for Supply Management will post its Non-manufacturing Index for March (43.0 expected). It’s going to be a big day, not only for the GBP/USD but also for the rest of the dollar related currency pairs. 

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.

USD/JPY – Daily Analysis

The USD/JPY currency pair continues to taking bids and rose above the 108.00 level despite the high risk-off sentiment in the market, which would typically keep the Japanese yen secure. However, the pair’s bullish trend could be attributed to the sharp rise in oil prices. The USD/JPY currency pair is currently trading at 108.25 and consolidates in the range between the 107.81 – 108.27. The broad-based greenback strength also keeps the pair higher. 

As per the latest report, the COVID-19 cases have surpassed one million worldwide with over a death toll rate of over 50,000. Meanwhile, the Washington Governor extended the stay-at-home order, whereas S&P declared its U.S. rating at AA+ with expectations of a recovery in 2021. 

As well as, Japan is now facing a rise in cases that are increasing the market risk tone time by time, which eventually will likely be good for the safe-haven Japanese yen currency. As in result, the U.S. 10-year Treasury yields fell below 0.60%, down 3-basis points (bps), whereas the U.S. stock futures also mark losses of near 1.0% by the press time. Even so, stocks in Asia-Pacific are moderately positive after the recent Aussie, Japan data.

Lastly, 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

On Friday, the technical side of the market continues to exhibit choppy trading sessions within a wide trading range of 108.650 – 107.250. The best idea is to buy at the lower limit 107.250 and sell below 108.650 for now, but on the news release of U.S. nonfarm payroll, we can experience a potential breakout in the USD/JPY pair. 

The USD/JPY is trading at 108.270, consolidating sideways, right above a next support level of 107.750. On the higher side, a 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!