- Euro plunges by weak European Production Industrial Data.
- The Pound is near to our control zone.
- Bank of Japan’s Sakura Report: household spending and robust exports are aiding recovery.
- Crude Oil is consolidating above $66.
The Euro plunges by weak European Industrial Production data.
Weak industrial production data in the Eurozone has triggered a 0.41% drop in the Euro, during today’s session, as we were expecting in the last Daily Update. Industrial production (YoY) fell from 3.7% in January to 2.9% in February, well below the mobile quarterly average of 3.97%.
The weak data published was mainly due to the reduction in the production of intermediate goods, capital goods, and durable and non-durable consumer goods. The common currency could go back to test the medium-term uptrend line. The support level to be controlled is 1.225 (For full resolution, click on the chart).
The German Index DAX 30 advances 1.08% within a tight upward channel, despite the weak European industrial production data. In the case of overcoming the resistance at 12,476.8 pts, the price could take us to the 12,702.42 – 12,825.92 area.
In the case of the Dollar Index, which advanced 0.36%, we will wait to see how it behaves around 89.36 and 89.03 levels, from which we could validate a reversal of the uptrend. The invalidation level remains below 88.52.
The pound is near to our control zone.
The sterling closed the session yesterday with an advance of 0.37%, approaching the levels that we see as a potential reversal zone (PRZ) that could extend even below to 1.427. From the raised area, the pound could begin to develop that bearish move as a new bearish leg.
Bank of Japan’s Sakura Report: household spending and robust exports are aiding recovery.
In their quarterly report, the Bank of Japan (BoJ) concludes that six regions reported their economy had been expanding or expanding moderately, and three regions had continued to recover moderately.
In general terms, household income is increasing moderately as the labour market conditions had continued to tighten continuously. In this macroeconomic context, Kuroda reports that the BoJ will continue with the bonds purchase program to stimulate economic growth.
On the technical side, the USDJPY pair is gaining bullish momentum that could lead us to the 108.2 – 108.5 area. The relevant resistance level is 107.48; invalidation level is at 106.61.
Crude Oil is consolidating above $66.
After reaching its highest level since 2014, crude oil is consolidating close to the $66 level. Following the rally that took place on April 06th, we expect the consolidation to be relatively extensive, so we should wait for a more discernible scenario to take positions in favour of the prevailing trend.
The USDCAD/oil correlated pair is consolidating between 1.2544 – 1.2623, in the same fashion that Crude Oil is doing. By inverse correlation, we expect that the Loonie makes a reversal pattern between 1.2540 and 1.246. The invalidation level for the reversal move is below 1.2250.
Another energy commodity correlated with the USDCAD pair is Natural Gas, which is making a complex corrective structure that could make a new low between 2.522 – 2.260 before it finds buyers.