The market is ready for the Non-Farms | 03 Abril 2015

Euro

The European currency remained in the narrow side corridor at the last session but finished the trades against the US dollar with an increase. The euro area manufacturing sector purchasing managers index (PMI) rose up to 52.2 in March from 51.0 in February, but it did not increase to 51.9 as it was mentioned earlier. The similar positive changes were recorded in the Germany, Italy, Spain and even France indices, these indicators, nevertheless, remained in the negative zone below the level of 50.0.

In anticipation of the US employment report publication the pair EUR/USD is trading in different directions. Yesterday the pair fluctuations were within the range, limited by the resistance 1.0770-1.0790. Then this level was broken upwards and the pair tested the resistance level of 1.0900-1.0920.

The support levels are 1.0750-1.0770, and the resistance levels are 1.0900-1.0920.

MACD is in a neutral territory.

Trading recommendations

However, the downward trend within the euro remains in force and the euro can decrease towards 1.0750-1.0770, but the weak employment report can trigger the US dollar sales and against this background the pair can return to the level of 1.1000-1.1020.

Pound

The British pound also fixed neutral result against the dollar at the last trades. The UK construction sector business activity index was below the forecasts. The UK construction sector business activity index was 57.8 in March against 60.1 in February while it was forecasted 59.8. The pair pound/dollar remained in the bears’ power that again tested the support around 1.4750-1.4770. They failed to get rid of the bids placed there and the pair rebounded upwards.

The support levels: 1.4750-1.4770 and the resistance levels: 1.4900-1.4920.

The MACD indicator is in a neutral territory.

Trading recommendations

The pair decrease to 1.4680-1.4700 is still possible, but the risks of the US dollar correction have significantly increased after the US employment report from ADP.

Yen

The Japanese yen traded in different directions against the dollar, but at the end of the last session it recorded a slight growth. The Japan releases showed that the monetary base fell to 35.2% y/y in March against 36.7% y/y in February which was slightly worse than it was forecasted as we expected a decrease to 35.3% y/y. Having imposed concern to bulls, the pair dollar/yen rose up to 120.20-120.40 and then it could not continue to grow or at least consolidate above the 120th figure and fell to the support near 119.25-119.45.

The support levels: 119.05-119.25, and the resistance levels: 120.20-120.40.

The MACD indicator is in a neutral territory.

Trading recommendations

Nevertheless, the risks of the dollar decrease are increasing, but it will depend on the Friday non-farms. Meanwhile, it is better to refrain from the new positions opening.