Yesterday UK Services PMI in March grew from 51.8 to 52.4 (estimates 51.4). However, the drop of the pound was not averted amid Bank of Japan decision. On Thursday it was announced that Bank of Japan planed to purchase 7.5 trillion yen of bonds a month and double the monetary base, which includes cash in circulation, in two years, in a bid to end two decades of economic stagnation and 15 years of deflation. Meanwhile, monetary base increases 60-70 trillion yen a year and government debt rises more than 200%. The USD/JPY pair grew 200 points and the euro fell 60 points. Later Mario Draghi spoke. As it was expected he alluded to a possible lowering of rate in June and to implement “unconventional stimulus measures” even in May. Federal Reserve officials Charles Evans and Dennis Lockhard said Thursday that they want to press forward with central bank bond buying, although one allowed the Fed is getting closer to having enough information to decide whether it can pare back or stop its most aggressive form of stimulus. The pound moved upwardly along with the market and grew 106 points.
Today at 11:00 GMT+4 UK Halifax House Price Index in March is published. It is forecast to be 0.2% vs. 0.5% in the previous month. Amid speeding down inflation the investors will not consider the price drop as the sign of decrease in economic activity. Thus, we expect moderate reaction and the major events will occur due to data on US Non-Farm Payrolls in March (forecast 198K vs. 236K in February).
Technically, the price has to overcome the high of April 2, 1.5257 in order to continue growing. Then the range of targets open 1.5288-1.5300, then the target range is the range of Fibonacci on the H4, 1.5370/87. If the data on Non-Farm Payrolls is weak and the price tests the low of April 1 and the high of March 15, 1.5176, we expect the price of support of Fibonacci extension on the level of 1.5125, the attempt to consolidate under it (1.5070) is possible.
The material has been provided by InstaForex Company – www.instaforex.com
Yesterday UK Services PMI in March grew from 51.8 to 52.4 (estimates 51.4). However, the drop of the pound was not averted amid Bank of Japan decision. On Thursday it was announced that Bank of Japan planed to purchase 7.5 trillion yen of bonds a month and double the monetary base, which includes cash in circulation, in two years, in a bid to end two decades of economic stagnation and 15 years of deflation. Meanwhile, monetary base increases 60-70 trillion yen a year and government debt rises more than 200%. The USD/JPY pair grew 200 points and the euro fell 60 points. Later Mario Draghi spoke. As it was expected he alluded to a possible lowering of rate in June and to implement “unconventional stimulus measures” even in May. Federal Reserve officials Charles Evans and Dennis Lockhard said Thursday that they want to press forward with central bank bond buying, although one allowed the Fed is getting closer to having enough information to decide whether it can pare back or stop its most aggressive form of stimulus. The pound moved upwardly along with the market and grew 106 points.
Today at 11:00 GMT+4 UK Halifax House Price Index in March is published. It is forecast to be 0.2% vs. 0.5% in the previous month. Amid speeding down inflation the investors will not consider the price drop as the sign of decrease in economic activity. Thus, we expect moderate reaction and the major events will occur due to data on US Non-Farm Payrolls in March (forecast 198K vs. 236K in February).
Technically, the price has to overcome the high of April 2, 1.5257 in order to continue growing. Then the range of targets open 1.5288-1.5300, then the target range is the range of Fibonacci on the H4, 1.5370/87. If the data on Non-Farm Payrolls is weak and the price tests the low of April 1 and the high of March 15, 1.5176, we expect the price of support of Fibonacci extension on the level of 1.5125, the attempt to consolidate under it (1.5070) is possible.
The material has been provided by InstaForex Company – www.instaforex.com
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