The Forex daily summary for 8 April features the following key notes:
- BoJ monetary policy, unchanged
- Japan economy watchers sentiment 52.2 vs. 50.6
- German factory orders m/m -0.9% vs. 1.5%
- France trade balance -3.4bn vs. -3.8bn
- Eurozone retail PMI 48.6
- UK housing equity withdrawal q/q -13bn vs. -10.2bn
- Eurozone retail sales m/m -0.2% vs. -0.1%
Later
- FOMC member William Dudley speech
- Crude Oil inventories
- FOMC meeting minutes
The forex markets were trading mixed as the markets started to digest the March jobs reports. The Greenback gained against its peers in early trading before weakness set in again by mid Europe trading session. The Australian dollar saw a minor sell off from midday yesterday before reclaiming its losses. AUDUSD was seen trading near 0.771 at the time of writing and looks poised to rally towards the likely target of 0.78 in the near term if the support at 0.77 holds. The Kiwi was a bit weaker into today’s session but managed to lift off from the lows of 0.75 to make an intraday session high to 0.759.
The Bank of Japan met earlier today and decided to leave interest rates unchanged as well as put on hold its quantitative easing policy. There was one dissenter who was of the opinion that the BoJ should start reducing its purchases but was voted down overwhelmingly by other board members.
The European session saw the Euro trading mixed, mostly on the Dollar’s weakness that set in. After hitting a low at 1.0805, EURUSD managed to gain making an intraday high towards 1.088 before showing signs of weakness. Greece continues to be the main theme for the Euro as the deadline for the first IMF payment is due tomorrow. Greece is expected to pay 279 billion Euros to the IMF and is also obliged to make its social payments to its citizens. Until the cloud clears over this, the Euro could remain subdued and susceptible to any news and rumors.
The British Pound was a bit stronger today albeit the Cable continues to trade within the range of 1.495 and 1.475. At the time of writing, GBPUSD was seen testing the upper end of the range at 1.495 levels. A break out from this resistance could see the inverted head and shoulders pattern mentioned in our daily analysis to kick in, which could propel GBPUSD towards 1.508 levels in the near term.
The weakness in the US Dollar saw Crude oil futures continue to maintain its rally but is risked to the Crude Oil inventories report due later today ahead of the FOMC meeting minutes released later, which could add significant volatility across the board.
Gold futures were also seen stabilizing for the most part after posting declines yesterday. The precious metal looks well supported above 1200 psychological level but shows a downside risk to an unfilled gap near the 1202 levels in the near term. Overall, Gold futures look poised to make further gains as much as 1230 in the medium term. However, as with most other currencies, the market reaction to the FOMC meeting minutes will be crucial in determining the future course of direction.
