All eyes on the US employment report

The USD retreated against a number of its counterparts yesterday as the market sentiment tended to improve, leaning towards a more risk on approach providing US stockmarkets with a boost. It’s characteristic that the S&P 500 reached a new record high while gold also benefited from the weakening of the USD, being on the rise given that US yields also were on the retreat. Analysts tend to highlight that the rapid US vaccination program along with the new Biden $2 trillion infrastructure spending plan may have boosted the market’s optimism for a swifter economic recovery in the US. Today we expect the market’s attention to be turned towards financial releases and especially the US employment report for March. The Non-Farm Payrolls are expected to rise, while the unemployment rate to drop and thus could provide some support for the USD given that such readings could be an indication of a tightening US employment market. The release is considered to be of high impact hence some caution is advisable when trading around the time of the release, as ripple effects could also be present in Stockmarkets and gold, besides the FX market. It should be noted that a high number of markets is to be closed and thin trading conditions may be present.
EUR/USD jumped yesterday breaking the 1.1760 (S1) resistance line, now turned to support. Given that the pair’s upward price action also clearly breached the downward trendline incepted since the 22nd of March, we switch our bearish outlook in favour of a sideways movement bias for the time being and we note that the release of the US employment report may alter the pair’s direction. Also please note that the RSI indicator below our 4-hour chart is hovering just above the reading of 50 implying a rather indecisive market. Should the bulls take charge of the pair’s direction, we may see EUR/USD breaking the 1.1830 (R1) and start aiming for the 1.1905 (R2) resistance level. Should the bears be in charge of the pair’s direction, we may see it breaking the 1.1760 (S1) support line and aim if not break the 1.1695 (S2) level which reversed the pair’s downward movement on the 31st of March.

Pound edges higher on improved readings

The pound edged higher against the USD, CHF and JPY while remained relatively stable with little losses against the common currency yesterday. The positive financial data released lately from the UK may have contributed to the positive sentiment for the pound, given that the final manufacturing PMI for March was better than expected, while the GDP rate for Q4 released on Wednesday also outperformed market expectations. Fundamentally the fast pace of UK’s vaccination program along with an easing of the UK lockdown measures may have improved the climate for the GBP, given also that the public opinion for the UK government has turned positive, while UK businesses are more optimistic. Should the positive sentiment continue to characterise the pound we may see the sterling gaining further against some of its counterparts.
GBP/USD tended to be on the rise and during today’s Asian session tested the 1.3845 (R1) resistance line. We tend to maintain a bias for a sideways motion between the 1.3700 (S1) support line and the 1.3845 (R1) resistance line and for it to change in favour of a bullish outlook, we would require a clear breaking of the prementioned upper boundary. Please note that the RSI indicator below our 4-hour chart is between the readings of 50 and 70, implying a slide advantage for the bulls. Should the pair actually find fresh buying orders along its path, we may see it breaking the 1.3845 (R1) resistance line and aim if not reach the 1.3990 (R2) resistance level. Should a selling interest be displayed by the market we may see cable aiming if not breaching the 1.3700 (S1) support line and if so the way is paved for the 1.3565 (S2) support level.

Other economic highlights today and early Tuesday:

As mentioned the main release is to be the US employment report for March today in the American session given that a number of markets including Germany, France, UK, Canada, Australia, Switzerland, Sweden, New Zealand, Norway, Czech Republic are closed for Easter holidays.

EUR/USD 4時間チャート

Support: 1.1760 (S1), 1.1695 (S2), 1.1620 (S3)

Resistance: 1.1830 (R1), 1.1905 (R2), 1.1990 (R3)

GBP/USD 4時間チャート

Support: 1.3700 (S1), 1.3565 (S2), 1.3450 (S3)

Resistance: 1.3845 (R1), 1.3990 (R2), 1.4145 (R3)

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