Mid Week Summary: April 2-6

By Nikolas Xenofontos from easy-forex

EUR/USD

The Euro commenced the week with a solid gap upwards against the US dollar. It rose up to the 1.3385 resistance level but it was all downhill from there on. A series of rising unemployment figures from several eurozone nations on Monday, and the Federal Open Market Committee (FOMC) minutes release on Tuesday pushed the single currency into a dive. The minutes were less dovish than expected and showed that another round of quantitative easing is unlikely any time soon. The official lending rate announcement of the European Central Bank due on Wednesday and the press conference that will follow will set the tone for the week’s end.

GBP/USD

The British pound versus the US dollar carried on its rollercoaster-like performance that we have seen over the few past weeks and we may see this volatility stay around for the next week. The Sterling managed to produce a positive display on Monday following a better than expected Manufacturing PMI. However, a better than expected Construction PMI marked the change of trend that was exacerbated by the FOMC minutes releases later in the night. The Bank of England bank rate release is due on Thursday, and it is expected to remain unchanged at 0.5%. The Monetary Policy Committee (MPC) announcement that follows will provide a very valuable insight for investors trying to forecast future policies.

EUR/JPY

The single currency pared all of its weekly gains against the Japanese Yen on Monday alone. The euro opened higher but Yen strengthened, even as the Tankan Manufacturing Index came out worst than expected. The consensus was for a weakening Yen due to the demand for Japanese funds to be repatriated due to the conclusion of the fiscal year, coming to an end. This move came on Tuesday with the pair rising up to 109.81. A lack of economic data releases from Japan is expected to leave the pair vulnerable to developments in the eurozone and the US.

EUR/GBP

The Euro versus the British pound had a quiet start to the week, depreciating gradually throughout the day following better than expected data for the UK. On Tuesday, the pair peaked at 0.8358 but did not manage to hold on to these gains and ended the day flat. Wednesday saw the pair hover around the 0.8285 support area. It will be interesting to see how the interest rate decisions by the European Central Bank on Wednesday and Bank of England on Thursday will affect the pair.

USD/CHF

The week commenced with the US dollar strengthening against the Swiss Franc. A better than expected ISM Manufacturing PMI on Monday pushed the pair higher. On Tuesday, the release of the FOMC minutes induced more dollar strengthen as it quashed expectation of another round of quantitative easing anytime soon. The ADP unemployment figures on Wednesday and the Non-Farm Payrolls due on Friday are expected to motivate trading for the pair.