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.
GBPUSD 06-04-2018 Intra-day analysis
GBPUSD (1.3998): The British pound fell back to the 1.4000 handle yesterday and with a firm test of support at this level we expect to see some upside momentum in the near term. The decline to 1.4000 level marks the completion of the bearish flag pattern. A breakdown below this support will see prices extending the losses as GBPUSD could test the 1.3902 level of support. To the upside, if the support holds then GBPUSD is likely to retrace the gains to test the minor resistance level at 1.4115 – 1.4092 region.