Daily Market Analysis from ForexMart

[Andrea ForexMart]

The Manufacturing PMI of the USA for April heightened to 51.8. Many traders had looked forward for the index to lessen by 51 in opposition to 51.5 recorded in March. Meanwhile, the Manufacturing PMI of Japan surpass our expectations and grew by 48.2 contrary to the report of 48.0.

The first support occurs at 105.80 and at 105.00 subsequently. The first resistance lies at 106.60 and at 107.40 subsequently.

A confirmed and a sturdy sell signal has been found. The price is below the Ichimoku Cloud and it is below the Chikou Span. The Tenkan-sen and the Kijun-sen form a horizontal motion. The descending movement will remain until the price is below the Cloud.

The MACD indicator is in a negative location. The price is correcting.

[Andrea ForexMart]

Insignificant forecasts has been issued by the USA which is the ISM New York and IBD/TIPP Economic Optimism indices wherein the data came in at 48,7 in opposition to the reported 46,6. The stabilization of the price can be viewed already, yet it is too soon to determine whether this is enough for a rate hike. At the next meeting that will take place in June, the decision for the rate hike will come up.

Meanwhile, the Producer Price Index in Eurozone for March displayed -4.2% wherein the report was -4.3% and the recent value was -4.2%. And for the first time this year, the index heightened. It could be a sign that the growth is impossible to decline for the next months.

The pound reduced on Tuesday from being on peak for four months when the manufacturing activity of the UK dropped in April for the first time over the past three years wherein the data came in at 49.2 from 51.0 in March contrary to the reported 51.2. The index that has been issued heightened the concerns regarding the probable growth in the second quarter.

Meanwhile, in the midst of the Constitution Day, the Bank of Japan did not have any activity on Tuesday.

[Andrea ForexMart]

Declining to its bottom-most level since February 2013, the Markit Manufacturing PMI in the UK modulated to 49.2 in April. This data was lower than the re-assessed value of 50.7 in March and below the economists' expectation of 51.2. The Manufacturing is still one of the most unpredictable sectors of the economy and still faces challenges including poor demand in the Asian markets and the slowing down of the euro area.

The first support occurs at 1.4480 and at 1.4400 subsequently. The first resistance stands at 1.4560 and at 1.4670 subsequently.

A confirmed and a sturdy buy signal has been found. The price is over the Ichimoku Cloud and it is on top of the Chikou Span. The Tenkan-sen and the Kijun-sen display a horizontal motion. The ascending movement will remain until the price is on top of the Cloud.

The MACD indicator is in a positive location. The price is strengthening.

[Andrea ForexMart]

The anticipation for the US’ nonfarm payrolls blocked the AUD’s slight uptrend on Thursday session, sending it down to slump at 0.73. The current spot exchange is 0.7372. A decline in crude oil prices and the RBA’s statement of monetary policy (SOMP) released today tightened the bears’ grip on the AUD/USD.

After the RBA slashed interest rates to 1.75 percent on Tuesday, its SOMP revealed further cuts on inflation forecasts. From the previous estimate of 2 to 3 percent growth, the RBA lowered its projection for the 2016 to just 1 to 2 percent. The central bank is aiming for a 2 to 3 percent inflation rate by the end of the year.

Forecasts for the next two years’ inflation were also revised down to 1.5 to 2.5 percent from the initial 2 to 3 percent. RBA’s statements indicated another possible rate cut.

The MACD indicator is in a negative location. The first support is at 0.7459 and 0.7422 subsequently. The first resistance is at 0.7522 and 0.7560 subsequently. The price is falling.

[Andrea ForexMart]

The sterling hardly reached the 1.45 level when dismal figures on the UK’s services sector was released. GBP/USD retreated to 1.44 levels and bottomed at 1.4456. The current exchange rate is 1.4496.

The service industry’s purchasing managers index (PMI) slimmed to 52.3 in April from the previous month’s 53.7, recording the softest PMI in three years. Economists expected a 53.5 growth. Traders are closely watching for the NFP data from the US which will help decide the Fed’s next move on its interest rates.

The first support is at 1.4442 and 1.4403 subsequently while the first resistance is at 1.4494 and 1.4496 subsequently. The MACD indicator is in neutral location. The price is increasing.

[Andrea ForexMart]

The AUD/USD has now settled at the 0.73 handle as data from China, Australia’s largest trade partner, did little to boost the Australian dollar’s value against the greenback. The AUD bottomed at 0.7299 today and peaked at 0.7351.

The impact of China’s bearish consumer prices, which grew by 2.3 percent in April from the same period last year, was lukewarm. Markets were expecting a 2.4 percent rise. Its PPI fell by 3.4 percent, not as much as the forecasted 3.8 percent decline. Exports and imports, which stood at -1.8 percent and -10.9 percent y/y respectively, were also on the red.

Buying interest on the USD firmed slightly due to an increase in wages, which was up 0.3 percent m/m in April and 2.5 percent y/y. Only 160,000 jobs were added to the nonfarm payrolls opposed to a projected 202,000 additional positions.
The spot exchange is now at 0.7339 and the price is rising. However, we are yet to see the AUD breach 0.74 today.

The immediate support is at 0.7272 and 0.7236 subsequently while the first resistance is at 0.7364 and 0.7397 subsequently. The MACD indicator is in a negative location.

[Andrea ForexMart]

Tuesday, the dynamics of the market was enliven with the help of the calendar of economic events. Job Openings was issued by the US wherein the data came in at 5.757 million contrary to the report of 5.431 million.

The euro currency heightened a little in opposition with the dollar. The euro zone has made a report about Industrial Production in Germany for March which the data dropped low more than what was expected wherein it came at -1,3% contrary with the expectations of -0,2%. Meanwhile, exports displayed a fast growth showing 1,9% against expectations -0,1%.

The Trade Balance which has sustained the pound was showed by the United Kingdom. The Bank of England Governor Mark Carney apprised the commercial banks and other financial institutions regarding a probable rate cut if ever the UK departs from the European Union.

The fall of the yen currency is an aftermath of the statement of the Minister of Finance on Monday. If it happens that the yen continues to grow, the regulator is ready to intercede, as stated by the ASO. The Japan Minister of Economy Nobuteru Ishihara stated that after the rally of the yen in the past week, he is nearly observing the financial markets.

[Andrea ForexMart]

Yesterday, in opposition with the US dollar, the major pairs has been rectified. We haven't heard EU stating significant data and the market's volatility was weak. The market was not affected by the British data through the main cross-pair EUR/GBP and most of the trades were unperturbed and smooth.

The scarcity of drivers helped the UK market to stay still. But the forthcoming referendum can probably become one of the drivers in the future. As stated by Michael Sanders, Bank of England Monetary Committee representative, if Britain favors the exit from EU, the Central Bank will be obliged to heighten the rates to 3.5% by the end of 2017, because the exit out of the EU union will facilitate the slump of the pound and will probably strengthen the inflation.

Due to the profits taken by the investors, the dollar slumped in opposition with the yen on Wednesday. It was an aftermath of the recent rally gaining a two-week highs and the Japanese speech regarding its preparation for an intercession. Yet, Japan were expected by many investors to refrain from doing any activity to enfeeble the yen before the G7 meeting.

[Andrea ForexMart]

The increase of risk appetite caused a positive effect on investor's sentiment. As a funding currency, the yen were pressured by the optimism showed by the leading stock exchanges. However, the US and Japanese government bonds yield differential had been decreasing for many consecutive trading days. The dollar/yen pair decreased by the end of the trades.

The first support occurs at 108.20 and at 107.40 subsequently. The first resistance stands at 109.00 and at 109.80 subsequently.

The price is in the Ichimoku Cloud and it is over the Chikou Span. The Tenkan-sen displays a descending movement and the Kijun-sen forms a horizontal movement. The MACD indicator is in a positive location. The price is consolidating.

[Andrea ForexMart]

The sturdiness of the world economy was left vague even though the dollar was sustained by the restored risk appetite. The Initial Jobless Claims volume was issued by the US wherein the data came in at 294,000 contrary with the expected 270,000. The political event of the day were the statements which came from Rosengren E. and Mester L, the Fed representatives. Mester stated that the risks which relative with the Fed reports should not affect the monetary policy management. While Rosengren proposed that the risks of leaving the rates unmodified seem too inferior for a long term of time.

The Germany issued the Wholesale Price Index wherein the data came in at 0,3% m/m in opposition with the expected 0,2% m/m while the Eurozone issued Industrial Production wherein the data came in at -0.8% m/m contrary with the expected 0.1% m/m.

The significant event of the day was the Bank of England meeting. The rate was remained unmodified by the regulator at 0.5%. At the same time, the inflation report of the Central Bank became the center of attraction. We hope that the growth in assessment of the inflation in the present year could help the pound to rise and counterbalance concerns about the cost of lending decrease. The Central Banks anticipates the inflation to restore at 0.2%.

In the midst of short positions closing, the dollar still managed to increased in opposition to yen. However, the US currency was still under pressure caused by the vagueness of probable increase in the global market.