Daily economic digest from Forex.ee

The EUR/USD pair again came under bearish pressure in early Europe, having refreshed its 3-month lows below the level of 1.2100, after brief consolidation phase, seen during the Asian session. Yesterday the pair received another bearish impetus following uninformative outcome of the ECB meeting. Moreover, during the subsequent Q&A session the ECB President M. Draghi mostly reiterated all we heard before, saying that QE program would last until sustained inflation adjustment. Also Mr. Draghi added that the ECB didn’t discuss the outlook for monetary policy, thus avoiding any further comments regarding Bank’s plans. In general, the ECB President sounded cautious and concerned, thus sending the pair nearly a cent lower, towards the level of 1.2100. Today investors will focus their attention on the German unemployment rate and the US preliminary GDP figures, which will help the pair to form its near-term trajectory at the end of this week.

The USD/JPY pair recovered the most part of its losses, witnessed during the Asian trading session, and entered the region of its nearly 3-month highs, marked earlier this week on the level of 109.46. Today the pair received another bullish impetus on the back of dovish outcome of the BoJ meeting. As it was widely expected the Bank announced no changes to its monetary policy settings, however, removing timeframe for the Japanese economy to reach 2% inflation, thus indicating that the BoJ will extend its massive economy stimulation program for longer period. However, the market showed limited reaction of this event, as investors have already got used to constantly dovish outcomes of the BoJ meetings. Looking ahead, today all eyes will remain glued to the US GDP report, while ongoing demand for the US dollar will remain the key navigator for the pair, thus determining its further direction.

The GBP/USD pair came under renewed selling pressure at the end of this trading week, having broken through the support level of 1.3900. It seems that dovish outlook of the BoE Governor M. Carney, in which he hinted that the BoE might delay rate hike, expected next month, continue to hold the pound under pressure. In addition to that, the US dollar continues to conquer positions across the market at the end of this week, which also negatively affects the pair. On the data front, today both economic calendars will release preliminary GDP reports, while investors will also pay attention to the speech of Mr. Carny, which may contain fresh clues on a potential rate hike in May.

The AUD/USD pair extends its retreat, having refreshed its multi-month lows at 0.7532 spot. Recent weakness of the pair could be mostly explained by ongoing demand for the US dollar, which has been the main driving factor across the market so far this week. Moreover, even positive Australia’s PPI data failed to bring any respite to the pair. Meanwhile, the next risky event for the pair remains the RBA monetary policy meeting, which will take place next Tuesday. However, markets expect that the RBA won’t be able to provide any surprises, especially taking into account recent red Australia’s inflation figures. But today, all investors’ attention will remain focused to the US GDP data, which will be able to bring fresh trading opportunities during the NA session.

Major events of the day:

German Unemployment Change – 10.55 (GMT +3)

Prelim. UK GDP – 11.30 (GMT +3)

Prelim. US GDP – 15.30 (GMT +3)

BoE Governor M.Carney’s Speech – 17.00 (GMT +3)

Support and resistance levels for the major currency pairs:

EURUSD S. 1.2023 R. 1.2249

USDJPY S. 108.87 R. 109.67

GBPUSD S. 1.3831 R. 1.4037

USDCHF S. 0.9788 R. 0.9946

AUDUSD S. 0.7520 R. 0.7604

NZDUSD S. 0.7031 R. 0.7109