Technical Analytics Report

Fundamental Analysis - Morning Market Review 06 April 2021

 

Morning Market Review :

 EUR/USD

 Today during the Asian session, the EUR/USD shows flat trading dynamics, slightly correcting after yesterday’s strong growth caused by several technical factors, as well as a massive return to the market of European investors after the Easter holidays. The macroeconomic background from the US remained quite optimistic but traders, who reacted poorly to the publication of the labor market report at the end of last week, paid little attention to it. ISM Service PMI for March rose from 55.3 to 63.7 points, which significantly exceeded analysts’ forecasts of growth only to 58.5 points. Markit Service PMI increased slightly, from 60.0 to 60.4 points. There was no Manufacturing PMI published on Monday, however, experts noted the decrease in the volume of industrial orders for February by 0.8% MoM after an increase of 2.7% MoM for January. Market forecasts assumed a decrease in the indicator by 0.5% MoM.

 GBP/USD

 Today, during the Asian session, the GBP/USD pair is consolidating, staying around the new local maximums from March 19, renewed yesterday. Now, GBP is trying to consolidate above the level of 1.3900, waiting for new drivers to appear. Investor activity is gradually recovering from the Easter holidays, and traders are returning with a clear interest in risky assets. Strong macroeconomic statistics from the US, released on Friday and Monday, supported the poor optimism in the market. Meanwhile, the pound is strengthening amid a sharp improvement in the epidemiological situation in the country. Traders expect the British economy to open in April. Against the background of record rates of vaccination of the population and a stable decrease in the incidence rate, according to the authorities’ estimates, the economy is ready for further steps to remove restrictions.

 NZD/USD

 Today, during the Asian session, the NZD/USD pair consolidates, trading near the level of 0.7050 and periodically renewing local highs of March 23. At the beginning of the week, the instrument is supported by technical factors, as well as the gradual return of investors to the market after the Easter holidays. An additional “bullish” factor was the positive macroeconomic statistics from China, indicating a further recovery in the region’s economy. Thus, the Caixin Service PMI for March rose from 51.5 to 54.3 points, while analysts had expected it to strengthen only to 51.7 points. On Tuesday, traders will focus on a block of US macroeconomic statistics on the dynamics of retail sales from Redbook, as well as the April index of economic optimism from IBD/TIPP. Also, the New Zealand dairy price index will be released during the day, which has recently shown a relatively stable negative trend.

 USD/JPY

 Today during the Asian session, the USD/JPY pair grows moderately, recovering from yesterday’s active decline. On Monday, the dollar weakened, despite the publication of strong macroeconomic statistics on business activity from ISM and Markit. Analysts attribute it to the massive return of investors to the market after the Easter holidays, as well as upward trends on stock exchanges, which provoked a short-term sale of the “safe” US currency. On Tuesday, some pressure on the yen’s position is exerted by ambiguous macroeconomic statistics from Japan. Thus, the volume of household expenditures for February fell sharply by 6.6% YoY after the decrease of 6.1% YoY in the previous month. Analysts expected the indicator to decline by only 2.1% YoY. At the same time, the indicator of changes in the level of wages for the same period fell by only 0.2% MoM, against the forecasts of a decrease by 1.5% YoY.

 XAU/USD 

Today during the Asian session, gold prices rise again, recovering from an uncertain start of the current trading week and renewing local highs from March 26. The “bulls” are taking advantage of some market confusion over the gradual return of investors after the Easter holidays, and are also ignoring strong US macroeconomic statistics on business activity from ISM and Markit for March. The market is also actively discussing a strong report on the US labor market, which was published last Friday. Gold is supported by a recently announced plan to modernize US infrastructure, which will cost taxpayers more than $2T. So far, President Joe Biden has disclosed only general details of his new idea of “keeping America great”, but the country’s budget will require additional tax injections. Also, analysts fear a noticeable rise in inflation amid a sharp increase in budget spending.


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