Daily Market Review April 08



The European Central Bank is set to add fresh stimulus in order to stabilize the current weakening economy of the Eurozone. The monetary policy meeting by the ECB yesterday ended on a confusing note, as it was not clear how the Central Bank would proceed to do so. The Central Bank apparently will leave no stone unturned as it does not lack economic ammunitions to increase the inflation, as stated by Mario Draghi. The EURUSD pair currently trades at $ 1.135, which quite low to this week’s beginning.

Earlier today, Asian shares dipped in the lows, extending three-week losses but the Japanese Yen was seen edging higher against the USD. MSCI’s index fell by 0.5 percent while Japan’s Nikkei incurred losses of nearly two-months, declining by 3.1 percent this week. Things were not better on the Wall Street either, with the S&P 500 seen losing 0.1 percent on the Asian trade and in Europe the FTSEEurofirst 300 edged down by 0.8 percent being led down by financials.

The Euro hit a six-month high by jumping higher around 1.1454 this week, which is certainly the result of the greenback’s weakness and ECB stimulus measures. Elsewhere, oil prices rose as demand seemed to be finally rising again in the U.S. and Germany. The oversupply remains a problem though which could play the spoilsport and cause crude prices to take a downtrend. Brent futures were up by 1.3 percent, settling around $39.96 a barrel while the U.S. crude advanced by 1.8 percent to hold at $37.92 a barrel.

Technical Analysis:
After almost reaching at 1.1450 yesterday, the pair EURUSD was again dragged down to the lows, where it now struggles to climb back up. The European central bank will add more stimulus, thus trying to revive the economy, however, things did not go down well with the Euro which eventually tumbled. Yesterday, the pair EURUSD initiated the session around the 1.139 level and rose to the 1.141 level, but was brought back to the starting point again. Later before ECB could release account of monetary policy, the pair edged up to the 1.446 level. After ECB added more stimulus, the pair closed the session down at around 1.135 level. With little economic jolts today, the pair EURUSD might hover around support level below.
The USDJPY is trying to jump slightly higher around the 108.87 level after having dropped to October 2014 lows. No rally is being fueled for the US dollar for the moment with the JPY keeping a strong momentum. However, yesterday Janet Yellen agreed on certain grounds of other policymakers, who think that a gradual hike in rates could take place this year. This caused a little boost for the dollar, but on the charts the USDJPY is still hovering in the lows. Yesterday, the pair USDJPY trended over a bearish path, starting at the 109.7 level and caused to drop at the 108.2 level. Later, the pair closed the session around the 108.4 level. The JPY is expected to rally further, thus keep an eye on market trends.
Will the GBP finally rise to the expected highs as analyst predicted earlier this week? So much confusion surrounds the GBPUSD for the moment, ahead of economic data aligned for Britain today, such as the manufacturing Production and Industrial Production. The pair GBPUSD could be boosted ahead of the release and generate much volatility for currency pairs. The pair GBPUSD initiated the session around the 1.431 level and consolidated before being dragged down to the 1.407 level and closed the session around the 1.405 level. The Ichimoku cloud hovers above the candles with change indicated at the 1.409 level which could imply a reversal trend for the GBPUSD. The pair could go higher, thus keep an eye on trends.

 

Economic Calendar