Daily Market Review April 13



Inflation rate rose to 0.5 percent for the month of March in UK, according to Office for National Statistics. Despite remaining below the desired target of 2 percent, Inflation seemed to be stable and at its highest level since December 2014. The reason evoked behind this rise is said to be the increase in air fares in February and March during Easter. However, a decrease in food prices was noticed compared to a small rise in crude prices. Elsewhere, crude prices are soaring higher.

WTI crude for May delivery soared by 3.69 percent to settle at $41.85 a barrel on the New York Mercantile Exchange. Note that U.S. crude oil inventories data will be obtained later today, which may somehow offset earlier gains in crude prices if numbers are obtained higher than expected. The latest rally of crude prices is mainly due to assumptions surrounding major crude producers meeting to curb supply. Negotiations may still take time to materialize and until then crude prices will maintain their rally.

Gold prices were a little meagre on the Asian Trade earlier today due to outcome of China’s trade balance which depicts a fuzzy picture of the Chinese economy. Gold for June delivery fell by 0.28 percent, holding around $1,254.50 a troy ounce. Furthermore, the USD has now started to bounce from eight-month lows, in an attempt to erase traces of previous losses. However, the EURUSD and GBPUSD will be the highlight today, along with the USDJPY and USDCAD, due to U.S. imminent economic data releases.

Technical Analysis:
Too many speculations running around the 1.150 level for the EURUSD pair, but the pair never reached that level in the past few weeks. The EURUSD pair navigates around the 1.144 level, not finding enough momentum to jump higher. The pair commenced the session around the 1.141 level and traded in small candles before being pushed up to the 1.143 level. Thus, the pair did not touch the 1.144 level of short-term resistance and ahead of Central Bank’s policy meeting next week, the pair is not expected to bounce any higher soon. Currently the pair hovers below at the 1.136 level and the RSI (Relative Strength Index) shows that the pair is below the RSI 40 handle, signaling an overbought market. Keep an eye on trends.
Watch out for the USDJPY pair, for it is expected to bounce higher today. The USD may have gained momentum against the JPY earlier today, as the pair is seen climbing up, slightly away from previous lows. With important economic releases such as the U.S. retail sales today, the pair could be boosted. The U.S. dollar might jump higher if data readings are obtained on a positive note. The pair USDJPY initiated the session around the 107.94 level yesterday and slowly climbed to the 108.7 level with the help of little momentary jumps and closed the session around the same level. The Ichimoku cloud indicator signals a change at the 108.2 level, scheduled for today. As the pair’s candles already move above the cloud, the intersection could mean a bullish change. Thus, keep an eye on U.S. data releases today.
The pair GBPUSD is moving up back to the 1.436 level of short-term resistance, certainly getting bullish on good numbers obtained for CPI data yesterday. An increase of 0.5 percent in the CPI data caused the GBP to relax and hover around to maintain gains. Lack of action by the side of UK today, may cause the pair to edge a little down, since U.S. data releases line up for the day. Thus later, the greenback could exert pressure on the British Pound. Yesterday, the pair GBPUSD initiated the session around the 1.423 level and slightly climbed to the 1.431 level, by help of momentary jumps. After being dragged down to the 1.420 level, the session came to a halt at the 1.426 level.

 

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