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Currency Analyst since 2010

Forex trading plan for March 31

By Elizabeth Belugina

US dollar index returned to 8-month lows, where it fell after the Federal Reserve’s March meeting as Janet Yellen said that the Fed should be cautious in raising rates because of external risks including low oil prices and slower growth abroad. Chicago Fed President Charles Evans followed the same line on Wednesday.On Thursday we’ll hear from New York Fed president Dudley at 09:00 GMT. Dudley tended to be mildly dovish, will his comments echo those of Yellen? According to ADP employment report, the number of employed people rose by 200K in March vs. the forecast of 195K increase, though the previous reading was revised down from 214K to 205K. The release was mildly positive for the greenback.   

EUR/USD met resistance at 1.1340. Finally, there will be news from the euro area. Watch German retail sales at 06:00 GMT and the regions flash inflation figures at 09:00 GMT (better forecasts). Support is at 1.1250/15. Above 1.1340 there may be a rally to 1.1375, 1.1400 and even 1.1460.

The Bank of England’s Governor Mark Carney will speak at 07:00 GMT. The pound looks vulnerable as the latest opinion polls showed the number of Brexit supporters increased further. Moreover, Carney will probably not welcome high levels of British currency. Also watch British current account and final GDP at 08:30 GMT. Resistance for GBP/USD is at 1.4435/50 and 1.4500. Support is at 1.4350 and 1.4285.

USD/JPY tested 112.00, but then recovered to 112.50. Japanese industrial production fell by 6.2% in February. This is the biggest decline since March 2011 earthquake. More weak data are expected from Japan later this week. The pair could recover to 113.00. Next resistance is at 113.50.

AUD/USD ran into resistance at 0.7700 and is vulnerable for correction to 0.7600/7590. Next support is at 0.7530. Canadian January GDP is due at 12:30 GMT. USD/CAD has support at 1.2975, but below may slide to 1.2830. Resistance is at 1.3130. 

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