On the forex front, the U.S. Dollar Index was seldom changed at 99.5 amid thin holiday trading. The economic calendar is muted a bit. The only focus today will be on the U.S. Labor Department, which will release March’s import price index (-3.2% on month expected).
Later in the day, the U.S. Commerce Department will post March retail sales (-8.0% on month expected) and February business inventories (-0.4% on month expected). The New York Federal Reserve will publish April Empire Manufacturing Index (-35.0 expected). The Federal Reserve will release March industrial production (-4.0% on month expected), capacity utilization (74.0% expected), and its latest Beige Book.
Economic Events to Watch Today
EUR/USD – Daily Analysis
The EUR/USD climbed 0.7% to 1.0987, French Finance Minister Bruno Le Maire said his government sees 2020 GDP contracting 8%, compared with a decline of 6% previously estimated.
The fresh uptick in the oil prices and above-forecast China trade data also helping restore the risk-sentiment. At the moment, the EUR/USD is trading at 1.0941 and consolidates in the range between the 1.0893 – 1.0967. At the coronavirus front, Australia has shown very sharp declines in the virus cases as compared to other countries and also registered declines in the death toll as per the latest report.
On the other hand, the macro-environment also supported the EUR/USD, and so do technical charts, especially Tuesday’s marubozu candle, which is indicative of strong bullish sentiment.
Looking forward, Spain and Italy are ready to release the report of inflation numbers for the month of March and will be essential to watch. Apart from this, the traders will also keep their eyes on U.S. Retail Sales and Industrial Production numbers for March.
Daily Support and Resistance
- S1 1.0811
- S2 1.0887
- S3 1.0936
Pivot Point 1.0964
- R1 1.1012
- R2 1.104
- R3 1.1116
EUR/USD– Trading Tips
The EUR/USD prices fell after testing 1.09885 resistance level, and the pair now seems to reverse back to the long-held trading range of 1.0922 – 1.0765. The EUR/USD is likely to find support around 1.0922 level. At this moment, the EUR/USD is holding at 1.09320, having an immediate support level of around 1.09060, where the bearish breakout of this level can extend selling until the next support level of 1.0846 and 1.07990. Conversely, the resistance stays at 1.0970 and 1.1035. The MACD is tossing above and below 0, converting the bearish sentiment into bullish and vice versa. Let’s consider staying bullish over 1.0960 today.
GBP/USD– Daily Analysis
The GBP/USD rose 0.9% to 1.2629. The GBP/USD is currently trading at 1.2508 and consolidates in the range between the 1.2604 – 1.2494. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively more significant in the U.S.
At the U.K. Crisis front, the United Kingdoms’ coronavirus death toll rose above 11,000, but the buyers are ignoring this probably because the death toll is comparatively larger in the U.S. almost 20,000 deaths have been registered so far.
The Brexit talks, which will be video conferencing between the European Union and the United Kingdom, are expected to happen and will likely entertain the cable traders as both sides have been stuck on the deadlines while the U.K. recently gave warning the bloc to change tactics or face serious ‘problems.
On the flip side, the headlines related to the expected British lockdown extension will likely keep the traders busy during the day ahead. Looking forward, the U.S. data, including the Retail Sales, activity numbers, and the Fed’s Beige Book, will be key to watch. The virus updates could keep the driver’s seat.
Daily Support and Resistance
- S1 1.2352
- S2 1.2475
- S3 1.255
Pivot Point 1.2599
- R1 1.2674
- R2 1.2723
- R3 1.2846
GBP/USD– Trading Tip
The GBP/USD is trading with a bearish bias over 1.2500 support areas to trade around 1.2516. The cable is likely to find support around 1.2490, which is extended by the triple top level, which got violated on Monday. As we can see on the 4-hour chart, the GBP/USD sideways channel has already been violated, and now it’s likely to keep the pair bullish outside this range of 1.2479 – 1.2185.
Ahead of the U.S. retail sales, the U.S. dollar is gaining bullish momentum, driving the bearish trend in the GBP/USD pair. However, the overall bias remains bullish as the prices are holding above 50 periods EMA. Conversely, the MACD is crossing into the bearish zone, opposing the EMA signal. So let’s consider taking buying trades over 1.2472 with a target of 1.2560.
USD/JPY – Daily Analysis
During Wednesday’s European session, the USD/JPY currency pair has succeded to recover almost 50 pips from the previous session lows and rose to a fresh session high near the 107.35 level in the last hour mainly due to the fresh upticks in the U.S. dollar. The USD/JPY is currently trading at 107.36 and consolidates in the range between the 106.94 – 107.46.
The pair for the second straight session on Wednesday showed some resilience below the 107.00 round-figure marks and attracted some dip-buying near monthly lows set on April 1.
Despite the latest positive news about decreasing the new coronavirus cases and deaths across the world, investors still worried about the economic fallout from the deadly coronavirus. This eventually supported the USD’s status as the global reserve currency and started some fresh selling around the major.
On the other hand, the risk-off market sentiment and declines in the global equity markets keep supporting the Japanese yen’s safe-haven status, which eventually keeps the currency pair limited.
Daily Support and Resistance
- S1 105.75
- S2 106.52
- S3 106.84
Pivot Point 107.3
- R1 107.62
- R2 108.08
- R3 108.85
USD/JPY – Trading Tips
The USD/JPY is trading with a bearish bias, and it is pretty much likely to find support around the triple bottom area of 107.039. A downward breakout of this level can extend selling until 105.300, while the resistance holds around 108.640. The MACD and 50 periods of EMA are suggesting bearish bias, while the fundamentals side is also in favor of selling. Since we the U.S. retail sales due during the U.S. session, traders will focus on the news to drive the next movement in the market. Hence, we should look for selling trades below 107 to target 106.630, and buying can be seen above the same 107 level today.
All the best for today!