EURGBP has lost around 6.5% since the start of the year to yesterday's low at 0.8500. And this is the most sustained and severe decline of the pair in the history of the euro.
On the weak Euro's side is an increase in QE from the ECB and a worsening pandemic situation with vaccinations' apparent failure.
The Pound, on the other hand, is helped by a comparatively more hawkish stance by the Bank of England and the success with vaccine distribution.
However, a rally in the Pound risks knocking the ground out from under the feet of the economic recovery.
Germany and major European countries are boosting manufacturing activity despite the lockdown, sentiment indices are rising, and the weak Euro provides them with an additional price advantage while ECB interest rate pressure is spurring lending.
The big players are unlikely to steadily push the Euro under the lower bound of the last five years' wide trading range at 0.8500. It may well turn out that the Pound will not only halt its decline but reverse towards 0.9000 by the end of the second quarter.
On the weak Euro's side is an increase in QE from the ECB and a worsening pandemic situation with vaccinations' apparent failure.
The Pound, on the other hand, is helped by a comparatively more hawkish stance by the Bank of England and the success with vaccine distribution.
However, a rally in the Pound risks knocking the ground out from under the feet of the economic recovery.
Germany and major European countries are boosting manufacturing activity despite the lockdown, sentiment indices are rising, and the weak Euro provides them with an additional price advantage while ECB interest rate pressure is spurring lending.
The big players are unlikely to steadily push the Euro under the lower bound of the last five years' wide trading range at 0.8500. It may well turn out that the Pound will not only halt its decline but reverse towards 0.9000 by the end of the second quarter.
#WaveAnalysis
#EURUSD broke three consecutive support levels
• Likely to reach support level 1.1610
https://fxpro.news/market-snapshots/eurusd-wave-analysis-30-march-2021-20210330/
#EURUSD broke three consecutive support levels
• Likely to reach support level 1.1610
https://fxpro.news/market-snapshots/eurusd-wave-analysis-30-march-2021-20210330/
#WaveAnalysis
#USDJPY broke resistance level 109.85
• Likely to reach resistance level 111.00
https://fxpro.news/market-snapshots/usdjpy-wave-analysis-30-march-2021-20210330/
#USDJPY broke resistance level 109.85
• Likely to reach resistance level 111.00
https://fxpro.news/market-snapshots/usdjpy-wave-analysis-30-march-2021-20210330/
#WaveAnalysis
#Dax30 broke round resistance level 15000
• Likely to reach resistance level 15500
https://fxpro.news/market-snapshots/dax-wave-analysis-30-march-2021-20210330/
#Dax30 broke round resistance level 15000
• Likely to reach resistance level 15500
https://fxpro.news/market-snapshots/dax-wave-analysis-30-march-2021-20210330/
Dollar squeezes alternative reserve currencies – EUR, JPY
Investors are receiving much more attractive yields on long-term US bonds than on the corresponding Japanese and German bonds.
The yield spread of 10-year yields has widened from 0.9 to 1.64 percentage points so far this year, mainly driving the 8% USDJPY rally.
A rising spread between US and German government bond yields, as in Japan, has been observed in the markets since July. However, it has only had a noticeable impact on the currency pair this year, pushing EURUSD back from 1.2330 at the start of January to 1.1700 now (-5%).
This does not at all mean that EURUSD will fall another 5%, reaching 1.1100-1.1200. Rather sooner than later, it will lose sensitivity to these changes, finding support just below 1.1500.
https://fxpro.news/daily-economic-events/dollar-squeezes-alternative-reserve-currencies-eur-jpy-20210331/
Investors are receiving much more attractive yields on long-term US bonds than on the corresponding Japanese and German bonds.
The yield spread of 10-year yields has widened from 0.9 to 1.64 percentage points so far this year, mainly driving the 8% USDJPY rally.
A rising spread between US and German government bond yields, as in Japan, has been observed in the markets since July. However, it has only had a noticeable impact on the currency pair this year, pushing EURUSD back from 1.2330 at the start of January to 1.1700 now (-5%).
This does not at all mean that EURUSD will fall another 5%, reaching 1.1100-1.1200. Rather sooner than later, it will lose sensitivity to these changes, finding support just below 1.1500.
https://fxpro.news/daily-economic-events/dollar-squeezes-alternative-reserve-currencies-eur-jpy-20210331/
Britain's final GDP figures for Q4 were revised upwards, easing fears of a downturn in the economy during the pandemic's last phase before vaccination began. The economy added 1.3%, although GDP previously estimated a gain of 1%. The recession for the fourth quarter of 2019 is revised up to 7.3%.
These are very significant declines relative to the rest of the world and the UK's history. However, the markets took the markedly worse figures into account in the quotations.
GBPUSD turned to the upside from levels near 1.3710, while EURGBP started a new round of decline from 0.8530 after the revised data was released. Already at the end of the first quarter, we can expect quite strong numbers on the back of mass vaccination and hopes for a gradual but steady lifting of coronavirus restrictions.
At the start of the post-coronavirus world, those who have done better in the vaccination phase will have a head start. And almost undoubtfully it is this factor that will drive the markets in the coming months.
These are very significant declines relative to the rest of the world and the UK's history. However, the markets took the markedly worse figures into account in the quotations.
GBPUSD turned to the upside from levels near 1.3710, while EURGBP started a new round of decline from 0.8530 after the revised data was released. Already at the end of the first quarter, we can expect quite strong numbers on the back of mass vaccination and hopes for a gradual but steady lifting of coronavirus restrictions.
At the start of the post-coronavirus world, those who have done better in the vaccination phase will have a head start. And almost undoubtfully it is this factor that will drive the markets in the coming months.
#WaveAnalysis
#Gold reversed from key support level 1680.00
• Likely to reach resistance level 1720
https://fxpro.news/market-snapshots/gold-wave-analysis-31-march-2021-20210331/
#Gold reversed from key support level 1680.00
• Likely to reach resistance level 1720
https://fxpro.news/market-snapshots/gold-wave-analysis-31-march-2021-20210331/
The dollar’s final surge before the 20% drop
The dollar gained 5% against a basket of major competitors and tripled against gold, from the bottom in the start of the year.
Three factors have been behind the dollar’s rise since the start of the year. To finance huge support packages, the US borrowed in the markets, sucking liquidity from other market sectors.
The realisation of these packages and the mass vaccinations improved the economy’s growth prospects, justifying the dollar’s attractiveness on the macroeconomic side.
Meanwhile, the Fed allowed the crisis measures to expire and did little to adjust the optimistic market expectations.
Arguably, the dollar may well get a boost in the coming weeks, as these factors will work further for the dollar’s strength, thanks to the new stimulus plan from Biden.
Strategically, however, one has to be prepared because this bounce in the dollar could be a good opportunity to reduce positions before a new, prolonged and deep round of weakening US currency.
The dollar gained 5% against a basket of major competitors and tripled against gold, from the bottom in the start of the year.
Three factors have been behind the dollar’s rise since the start of the year. To finance huge support packages, the US borrowed in the markets, sucking liquidity from other market sectors.
The realisation of these packages and the mass vaccinations improved the economy’s growth prospects, justifying the dollar’s attractiveness on the macroeconomic side.
Meanwhile, the Fed allowed the crisis measures to expire and did little to adjust the optimistic market expectations.
Arguably, the dollar may well get a boost in the coming weeks, as these factors will work further for the dollar’s strength, thanks to the new stimulus plan from Biden.
Strategically, however, one has to be prepared because this bounce in the dollar could be a good opportunity to reduce positions before a new, prolonged and deep round of weakening US currency.
#WaveAnalysis
#Microsoft broke resistance level 240
• Likely to rise to resistance level 245
https://fxpro.news/market-snapshots/microsoft-wave-analysis-1-april-2021-20210401/
#Microsoft broke resistance level 240
• Likely to rise to resistance level 245
https://fxpro.news/market-snapshots/microsoft-wave-analysis-1-april-2021-20210401/
#WaveAnalysis
#USDCHF reversed from 0.9460
• Likely to fall to support level 0.9380
https://fxpro.news/market-snapshots/usdchf-wave-analysis-1-april-2021-20210401/
#USDCHF reversed from 0.9460
• Likely to fall to support level 0.9380
https://fxpro.news/market-snapshots/usdchf-wave-analysis-1-april-2021-20210401/
Gold and oil seem to have completed their correction
Today is a day off in most trading venues in Europe and America with limited commodity market dynamics. However, it is an excellent reason to take a closer look at the recent developments in oil and gold.
Brent once again found support on the downside to its 50-day moving average and gained more than 3% by Thursday’s close. Further improvement in the macroeconomic outlook could continue to push the price higher and bring Brent back above $70 in April.
Gold gained support earlier in the week on the downside to the March lows at $1680 and the long-term upside trend support line from mid-2019.
https://fxpro.news/daily-economic-events/gold-and-oil-seem-to-have-completed-their-correction-20210402/
Today is a day off in most trading venues in Europe and America with limited commodity market dynamics. However, it is an excellent reason to take a closer look at the recent developments in oil and gold.
Brent once again found support on the downside to its 50-day moving average and gained more than 3% by Thursday’s close. Further improvement in the macroeconomic outlook could continue to push the price higher and bring Brent back above $70 in April.
Gold gained support earlier in the week on the downside to the March lows at $1680 and the long-term upside trend support line from mid-2019.
https://fxpro.news/daily-economic-events/gold-and-oil-seem-to-have-completed-their-correction-20210402/
Employment in the USA rose by 916,000, better than the average forecast of 650,000.
An additional positive signal from the labour market is that the average working week rose to 34.9 hours, a repeat of the highs of January and the highest values in the indicator's history since 2006. This data reflects a high workload, suggesting a further healthy rate of employment growth.
Against the backdrop of booming employment and workload, it should not be surprising to see wages fall: employers are bringing back less qualified workers, which is pulling the averages down.
This strong macro data has pushed S&P500 futures to new all-time highs (the stock market itself is closed today). The first reaction of the dollar is mixed.
Generally speaking, strong employment growth is a positive for the US currency, as it promises higher inflation and an earlier rate hike. But that is still too far away, making the dollar attractive as funding currency for buying stocks and commodities.
An additional positive signal from the labour market is that the average working week rose to 34.9 hours, a repeat of the highs of January and the highest values in the indicator's history since 2006. This data reflects a high workload, suggesting a further healthy rate of employment growth.
Against the backdrop of booming employment and workload, it should not be surprising to see wages fall: employers are bringing back less qualified workers, which is pulling the averages down.
This strong macro data has pushed S&P500 futures to new all-time highs (the stock market itself is closed today). The first reaction of the dollar is mixed.
Generally speaking, strong employment growth is a positive for the US currency, as it promises higher inflation and an earlier rate hike. But that is still too far away, making the dollar attractive as funding currency for buying stocks and commodities.
#WaveAnalysis
#SP500 broke round resistance level 4000
• Likely to rise to resistance level 4200
https://fxpro.news/market-snapshots/sp-500-wave-analysis-5-april-2021-20210405/
#SP500 broke round resistance level 4000
• Likely to rise to resistance level 4200
https://fxpro.news/market-snapshots/sp-500-wave-analysis-5-april-2021-20210405/
#WaveAnalysis
#AUDUSD reversed from support level 0.7580
• Likely to reach resistance level 0.7700
https://fxpro.news/market-snapshots/audusd-wave-analysis-5-april-2021-20210405/
#AUDUSD reversed from support level 0.7580
• Likely to reach resistance level 0.7700
https://fxpro.news/market-snapshots/audusd-wave-analysis-5-april-2021-20210405/
#WaveAnalysis
#GBPUSD broke daily down channel
• Likely to rise to resistance level 1.4000
https://fxpro.news/market-snapshots/gbpusd-wave-analysis-5-april-2021-20210405/
#GBPUSD broke daily down channel
• Likely to rise to resistance level 1.4000
https://fxpro.news/market-snapshots/gbpusd-wave-analysis-5-april-2021-20210405/
Dollar reverses its course after growth loses momentum
The demand for risk is often correlated with a weaker USD. However, USD has yet to confirm its decline. Right now, the DXY Dollar Index to a basket of major currencies is at 92.65, slightly above its 200-day average of 92.45. A break-down under this line in the next few days would signal that we have seen a false break earlier.
Since the end of March, EURUSD has been under the 200 SMA, which is now passing through 1.1880. A break above from the current levels near 1.1800 could be the necessary confirmation of an upward trend.
https://fxpro.news/daily-economic-events/dollar-reverses-its-course-after-growth-loses-momentum-20210406/
The demand for risk is often correlated with a weaker USD. However, USD has yet to confirm its decline. Right now, the DXY Dollar Index to a basket of major currencies is at 92.65, slightly above its 200-day average of 92.45. A break-down under this line in the next few days would signal that we have seen a false break earlier.
Since the end of March, EURUSD has been under the 200 SMA, which is now passing through 1.1880. A break above from the current levels near 1.1800 could be the necessary confirmation of an upward trend.
https://fxpro.news/daily-economic-events/dollar-reverses-its-course-after-growth-loses-momentum-20210406/
#WaveAnalysis
#GBPJPY reversed from long-term resistance level 153.35
• Likely to reach support level 150.
https://fxpro.news/market-snapshots/gbpjpy-wave-analysis-6-april-2021-20210406/
#GBPJPY reversed from long-term resistance level 153.35
• Likely to reach support level 150.
https://fxpro.news/market-snapshots/gbpjpy-wave-analysis-6-april-2021-20210406/