The dollar is strongly hit by the weak start of Q2

The EURUSD advance was temporarily disrupted in yesterday’s session as the Unemployment Claims were reported down to 264k. This data came as a relief for the American dollar which is currently struggling at the three months low versus the euro. The U.S.’ economy started the second quarter with the wrong foot as the Retail Sales were reported lower than expectations, to 0.0%, the Core Retail Sales disappointed as well by 0.1% and, perhaps the most important aspect, the PPI was reported down to -0.4% while the Core PPI decreased to -0.2%. The EURUSD still has resources to rise, despite the situation in Greece which investors consider to be workable. However, we should pay attention to the 1.1500 resistance zone which may be stronger than the euro’s momentum (at least temporarly).

Mario Draghi’s speech didn’t have a strong influence on the markets as he assured investors that the ECB is fully committed to proceed with its bond buying program. Draghi didn’t comment on the Greek situation.

The Japanese yen proved to be weaker against the dollar and against the euro. BOJ Governor Haruhiko Kuroda is maintaining its two years time interval of achieving the 2% inflation target. The Bank has no intention to increase the 2% target, while it doesn’t think about implementing further easing monetary policy measures. Recently, the USDJPY developed a lateral movement visible on a H4 or daily interval. The yen remains weak and the reason of this trend may be the bank’s inability to prove that the QQE program is able to boost inflation.

The Sterling pound is getting stronger every day as the GBPUSD is currently testing the 1.5800 resistance zone and the EURGBP is still staying near the 0.7200 – 0.7240 support zone. The Unemployment Rate decreased to 5.5%, the Average Earnings Index rose to 1.9% and the RICS House Price Balance advanced to 33%. During his speech, Bank of England Governor Mark Carney announced the cut in the BOE forecast of economic growth over the next three years. The central bank now expects growth this year of 2.5% down from 2.9%. Even if inflation is expected to cross into the negative territory, prospects should increase rapidly and lead to the bank’s target. Likewise, the BOE maintained is commitment to increase the interest rate as soon as the conditions will be good.

Oil quotations temporarily interrupted the ascending trend. Even if the American inventories were reported below expectations to -2.2 million barrels, the market had a negative reaction which is based on fear of a US economic slowdown that can strongly affect the demand. Technically speaking, the outlook for today is positive as the price for both Brent and WTI oil is set to recover the losses and target the local resistance zones at 62.00 dollars for WTI and 67.30 dollars for Brent.