The US dollar slipped a bit on Friday but finished the week with overall gains against most major currencies. US Stocks indices showed gains, relying on demand for the US Dollar, but also influenced by profit-taking near the close. The Dow Jones, S&P 500 and Nasdaq Composite closed at +1.36%, +1.57% and -0.58% respectively.
In Europe, the DAX 30 and FTSE 100 rose 0.88% and 0.77% respectively. Meanwhile in the Asia-Pacific region, the Nikkei 225 and Hang Seng weakened over 2%. The EURUSD pair finished the week below 1.1800 price, and near its 2021 low at 1.1762, keeping the bearish position, although the GBPUSD neared the 1.3800 level. Commodity-linked currencies benefited from the positive tone of Wall Street, but gains were modest. Gold (XAUUSD) was incapable to entice investors throughout the week, ending it marginally lower around $1,732.00 a troy ounce. Crude oil prices edged higher, as the Suez channel remains blocked, with WTI settling at $60.70 a barrel.
Last week in the Covid-19 headlines we had a rise in number of new cases in the EU and the US. Market players are paying little attention to the news and remain confident about an economic comeback before the year-end. The emphasis is also put on possible inflationary pressures in the US, which may force the Fed into increasing rates sooner than expected.
The week of March 29 – April 2 is unusually quiet, with very few high-impact announcements scheduled. On Thursday, April 1, there are all-day OPEC meetings, and on Friday, April 2 the highly anticipated US non-farm payrolls report. Good employment figures could boost bond yields and further enhance the rotation trade out of growth and into value stocks. Most trading exchanges will however be closed for the Good Friday holiday, opening the door to illiquid market conditions.
Major Currencies Performance and Signals
EUR/USD
The Euro is in an interesting long-term place. The weekly chart shows how the price has reacted to a previous resistance area made in early 2018. As we are waiting for the NFP figure, the Euro has broken through enough support that we expend the bearish trend to continue, even testing the 1.1650 level underneath.
FORECAST: SHORT
Resistance: 1.1800, 1.1850, 1.1900
Support: 1.1750, 1.1700, 1.1650
GBP/USD
The Cable had as expected a down move reaching a support close to the 1.3650 level. This week we expect bears to continue their reign but always being aware of the weeks end NFP figures.
FORECAST: SHORT
Resistance: 1.3800, 1.3850, 1.3900
Support: 1.3750, 1.3700, 1.3650
AUD/USD
The Aussie as expected and due to US Dollar demand had a similar trend to Cable. This week we expect the bearish pressure to increase.
FORECAST: SHORT
Resistance: 0.7650, 0.7700, 0.7750
Support: 0.7600, 0.7550, 0.7500
USD/JPY
The USDJPY pair last week had a sharp upwards move due to the demand of the dollar. Our bias for the pair is still bullish, but we would like the price to break through the resistance at 109.85 and settle above it, preferably as support, and then move in for a long position.
FORECAST: LONG
Resistance: 110.00, 110.50, 111.00
Support: 109.50, 109.00, 108.50
USD/CAD
The Loonie was moderately up last week by the US dollar demand competing with the Crude oil appreciation, because of the Suez blockage. We remain neutral this week but also waiting for the NFP figures on Friday.
FORECAST: NEUTRAL
Resistance: 1.2650, 1.2700, 1.2750
Support: 1.2550, 1.2500, 1.2450
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