Will the euro / dollar recover from the fall

On Wednesday, April 7, trading in the euro ended in decline. The euro fell 0.10% to 1.1862. The rise in the pair to 1.1915 was facilitated by the rally in the EUR / GBP cross. There was no news behind the collapse of the British pound. The cross picked up a high speed on April 6 and was moving upward by inertia, putting pressure on the pound. As soon as the correction began on it, the rate of the euro against the dollar fell by 54 points, to 1.1861.

The published protocol of the US FRS turned out to be without surprises, therefore it did not affect the market. At the last meeting, FOMC members voted to keep rates close to zero and to continue buying bonds worth at least $ 120 billion each month. The committee also raised its forecast for future economic growth and inflation. The average forecast for GDP in 2021 was 6.5% against 4.2% in December forecasts. The unemployment rate could fall to 4.5% by the end of the year, while inflation could rise to 2.2%, slightly above the Fed’s traditional 2% target. The protocol states that the risks of inflationary pressure have increased compared to the previous forecast, but they are considered balanced for the inflation forecast.

Scheduled statistics (GMT + 3)

  • At 11:30 Britain will present the PMI for the construction sector for March.
  • At 12:00, the eurozone is to release the February PPI.
  • At 14:30 in the euro area will release the ECB’s report on the meeting on monetary policy.
  • At 15:30 the US will announce a change in the number of initial jobless claims.

Current situation

On Thursday, the major currencies are trading in positive territory against the US dollar. The leaders of growth are the currencies of the Pacific region: the Australian dollar (+ 0.26%) and the New Zealand dollar (+ 0.31%). They indicate an increase in demand for risky assets, although they are correcting after yesterday’s fall.

The euro / dollar pair is trading at 1.1881. After falling to 1.1861, the price for 11 hours is in a correctional phase. If the correction in the dollar intensifies with the opening of trading in London, then we can assume that the euro will continue to recover to 1.1895. Here you need to monitor the euro / pound cross, since with a daily pinbar, the fall of the euro against the dollar and the pound may increase as part of profit-taking on long positions. On the daily TF, a pinbar or “evening star” (“bearish” setup, the target for it is 1.1810) was formed for yesterday. The upper shadow of the candlestick is 41 points, the body – 10 points. The nearest supports are located at the levels 1.1860 and 1.1838.

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