Daily Forex Market Preview, 06/04/2018
The U.S. dollar was seen trading stronger on the day as economic data from the Eurozone and the UK disappointed. The equity markets pushed higher on improving market sentiment as investors took a break from the uncertainty from the trade wars.
In the UK, the services sector PMI data came out weaker as the index fell to 51.7 missing estimates of 53.9 and down from February’s print of 54.5. The British pound slipped on the news as the services PMI wrapped up a weak month of March. Previously, manufacturing PMI was weaker alongside construction PMI which showed a contraction in the sector.
In the Eurozone, retail sales data showed a 0.1% increase on the month which was below estimates of a 0.6% increase. Previous month’s data was also revised down to show a 0.3% decline. The services PMI data from the Eurozone was seen at 54.0 which was slower than February’s print of 54.2
Looking ahead, the economic data today will focus on the payrolls report for March. Following a stronger than expected print from the ADP data earlier this week, economists forecast that payrolls rose 188k on the month. The U.S. unemployment rate is expected to slip to 4.0% marking a new low in recent years while wage growth is forecast to rise 0.3% on the month.
EURUSD 06-04-2018 Intra-day analysis
EURUSD (1.2239): The EURUSD resumed the declines yesterday as prices briefly tested a fresh monthly low on an intraday basis before pulling back. Price action is seen consolidating near the 1.2243 level of support and this support could hold the declines in the near term. We expect to see EURUSD attempting to post a rebound in the near term, but with resistance at 1.2300 the common currency could be seen trading within this range. A breakout from either of these levels will set the path for the next leg in the rally or declines. Resistance at 1.2385 remains as a target to the upside while below 1.2243, the next support at 1.2188 will be tested.