Last week, the forex market was dictated by the disappointing US non-farm payroll and dovish comments by the ECB President, Mario Draghi.
The greenback ended the week higher against most of its key counterparts. Macroeconomic data released showed that US economy added the least number of jobs in 10 months in March, while the nation’s unemployment rate dipped to its lowest level in nearly a decade in the same month, thus painting a mixed picture of the nation’s labor market. Meanwhile, the nation’s average hourly earnings rose in line with expectations in March, while the ADP’s private sector added the most number of jobs in over 2 years in the same month. Moreover, the nation’s initial jobless claims declined to its lowest level in nearly 2 years in the week ended 01 April 2017, indicating that job growth would continue to remain strong in the country. Also, the nation’s construction spending rebounded to its highest level in nearly 11 years in February, amid robust gains in home building investment. Other economic data revealed that the nation’s trade deficit narrowed more-tha n-anticipated in February, amid a surge in exports. Also, the nation’s factory orders grew for a third straight month in February, while the final durable goods orders climbed more-than-anticipated in the same month.
Another set of data showed that the US ISM manufacturing PMI eased in March, whereas the non-manufacturing PMI sharply declined to its lowest level in 5 months in the same month, suggesting that the nation’s economic activity is losing some steam. Additionally, activity in the nation’s manufacturing as well as services sector was revised lower in March.
The Euro ended the week in negative territory against the USD, after the European Central Bank (ECB) Chief, Mario Draghi, stated that it was too soon to wind down the central bank’s stimulus program, even though the Eurozone economy is strengthening and added that there was scant evidence that inflation was approaching the central bank’s target. Separately, minutes from the ECB’s March meeting showed that committee members broadly agreed that a substantial degree of stimulus is still needed.
The GBP ended the week on a weaker footing against the USD, after an unexpected downturn in UK’s manufacturing, industrial and construction sector dented the nation’s growth prospects in the first-quarter of 2017. Moreover, the nation’s Markit manufacturing PMI unexpectedly eased for a third consecutive month in March, while services PMI surged to its highest level in 3 months in the same month.
EURUSD
The EUR weakened against the USD last week, closing 0.57% lower at 1.0588, after the ECB President, Mario Draghi, played down speculation that an interest rate increase could come later this year. On the macro front, the Eurozone’s unemployment rate fell to 9.5% in February, meeting market expectations. Additionally, the region’s final Markit manufacturing PMI rose in line with preliminary estimates in March, while the final Markit services PMI was surprisingly revised lower in the same month. Further, the region’s seasonally adjusted retail sales rose more-than-expected in February. Separately, Germany’s final Markit manufacturing and services PMIs rose in March, confirming the preliminary figures. Also, the nation’s seasonally adjusted factory orders rebounded in February, while the nation’s Markit construction PMI advanced in March. The pair traded at a high of 1.0689 and a low of 1.0581 during the previous week. The pair is expected to witness its first support at 1.0552 and second support at 1.0512, while the first resistance is expected at 1.0660 and second resistance at 1.0728. This week, investors would focus on the ZEW expectations index across the Eurozone along with the Eurozone’s Sentix investor confidence index and Germany’s final consumer price index, all scheduled to release this week.
GBPUSD
During the previous week, the GBP traded 1.38% lower against the USD and ended at 1.2372, following a string of downbeat economic data. Data revealed that Britain’s industrial and manufacturing production, both unexpectedly eased in February. Moreover, the nation’s construction output surprisingly declined in the same month. Further, the nation’s total trade deficit surprisingly expanded in February. Moreover, NIESR estimated that UK’s gross domestic product (GDP) rose less-than-expected by 0.5% in the January-March 2017 period. Other data showed that UK’s Markit manufacturing PMI surprisingly eased in March and the construction PMI unexpectedly fell in the same month. In contrast, the nation’s Markit services PMI advanced in March. Also, the nation’s GfK consumer confidence index surprisingly remained steady in March. The GBP hit a high of 1.2554 and a low of 1.2366 against the USD in the previous week. The pair is expected to find its first support at 1.2307 and first resistance at 1.2495. The second support is expected at 1.2242 and second resistance at 1.2618. Looking ahead, investors’ will anxiously await Britain’s consumer price inflation, ILO unemployment rate and RICS house price balance data, all slated to release this week. Also, a speech by the BoE Governor, Mark Carney, would generate a lot of market attention.
USDJPY
The USD traded 0.3% lower against the JPY last week, with the pair closing at 111.05. In economic news, Japan’s final Nikkei manufacturing PMI eased in March, although remaining in the expansion territory, while the services sector jumped in the same month. Moreover, the nation’s Tankan large manufacturing index registered a less-than-expected rise in the first quarter of 2017, whereas non-manufacturing index rose more-than-anticipated in the same period. In other economic news, Japan’s consumer confidence index jumped in March. Also, the nation’s flash coincident index advanced as expected in February, whereas preliminary leading index dropped more-than-anticipated in the same month. During the previous week, the pair traded at a high of 111.59 and a low of 110.13. The pair is expected to witness its first support at 110.28 and second support at 109.48, while the first resistance is expected at 111.74 and second resistance at 112.40. This week, Japan’s trade balance, Eco-watchers survey, flash machine tool orders and final industrial production data, will be on investors’ radar.
USDCHF
Last week, the USD traded 0.59% higher against the CHF and closed at 1.0088. Macroeconomic data showed that Switzerland’s real retail sales rebounded on an annual basis in February. Further, the nation’s SVME–PMI advanced in March. Moreover, the nation’s seasonally adjusted unemployment rate remained steady at 3.3% in March, meeting market expectations. During the previous week, the pair traded at a high of 1.0096 and a low of 1.0008. The pair is expected to witness its first support at 1.0034 and second support at 0.9977, while the first resistance is expected at 1.0122 and second resistance at 1.0153. Moving ahead, investors’ will look forward to Switzerland’s producer and import prices data, the sole important release this week.
USDCAD
The USD rose against the CAD last week, closing 0.7% higher at 1.3404. Macroeconomic data revealed that Canada’s unemployment rate registered a rise in March, meeting market expectations. Meanwhile, the nation’s net number of people employed increased more-than-anticipated in the same month. Additionally, the nation’s RBC manufacturing PMI advanced in March. In contrast, the nation’s building permits unexpectedly dropped in February, while the nation surprisingly posted an international merchandise trade deficit in the same month. Separately, the Bank of Canada (BoC), in its latest business outlook survey, indicated that the balance of opinion on future sales dropped in the previous quarter. The pair traded at a high of 1.3456 and a low of 1.3310 during the previous week. Immediate downside, the first support level is seen at 1.3320, followed by 1.3242, while on the upside, the first resistance level situated in 1.3466, followed by 1.3534. This week, Bank of C anada’s (BoC) interest rate decision along with Canada’s housing starts data, would generate a lot of market attention.
AUDUSD
The AUD traded 1.74% lower against the USD last week, with the pair closing at 0.7495. Last week, the Reserve Bank of Australia (RBA), in its latest monetary policy meeting, held the key interest rate steady at 1.50%, as widely expected. On the data front, Australia’s AIG performance of manufacturing and construction indices, both eased in March. Further, the nation’s seasonally adjusted retail sales unexpectedly fell in February. On the other hand, the nation’s AIG performance of services index expanded in March. Also, the nation’s seasonally adjusted building approvals recorded an unexpected rise in February, whereas seasonally adjusted trade surplus widened more-than-expected in the same month. During the previous week, the pair traded at a high of 0.7640 and a low of 0.7494. Immediate downside, the first support level is seen at 0.7449, followed by 0.7399, while on the upside, the first resistance level situated in 0.7595, followed by 0.7691. Looking ahead , investors’ will look forward to Australia’s unemployment rate, consumer inflation expectations, NAB business confidence and Westpac consumer confidence, all scheduled to release this week.
Gold
Last week, gold rose 0.43% to close at USD1254.53 per ounce, following disappointing US non-farm payrolls report for March. The yellow metal witnessed a high of USD1273.30 per ounce and a low of USD1245.40 per ounce in the previous week. Immediate downside, the first support level is seen at USD1243.23 per ounce, followed by USD1230.37 per ounce, while on the upside, the first resistance level situated in USD1271.13 per ounce, followed by USD1286.17 per ounce.
Crude Oil
Crude oil traded 3.24% higher in the previous week, closing at USD52.24 per barrel, after the US President, Donald Trump ordered the first direct military action against the regime of Syrian President, Bashar al-Assad, by launching missiles at a Syrian government airbase. However, gains in crude prices were capped, after the Energy Information Administration (EIA) indicated that US crude oil stockpiles surprisingly rose by 1.6 million barrels to 535.5 million barrels in the week ended 31 March, while the American Petroleum Institute (API) reported a draw of 1.83 million barrels in crude oil inventories to 533.7 million barrels in the same week. The commodity traded at a high of USD52.94 per barrel and a low of USD49.88 per barrel in the previous week. The commodity is expected to find its first support at USD50.47 per barrel and first resistance at USD53.53 per barrel. The second support is expected at USD48.64 per barrel and second resistance at USD54.76 per barrel.
Good trades Traders.
