Currency Analyst since 2010

Forex trading plan for April 21

EUR/USD: The market’s attention will be focused on the European Central Bank’s decision (11:45 GMT, no changes in policy are expected) and the press conference of the ECB President Mario Draghi (12:30 GMT). European economic figures were brighter since the last meeting, but the regulator will likely emphasize that monetary policy will remain accommodative. The euro may test levels around 1.1300/1.1270 ahead of the event. Decline below 1.1240 will open the way down to 1.1140. Resistance is at 1.1375, 1.1400 and 1.1460.   

GBP/USD: British labor market data came out lower than expected. Growth of average hourly earnings slowed from 2.1% to 1.8%. It means lower wage inflation and lower chance that the Bank of England will increase interest rates anytime soon. BoE’s member McCafferty made dovish comments – this is negative for the pound. On Thursday the UK will release retail sales data at 08:30 GMT. The indicator’s decline is expected to slow down, though consensus shows that there still will be a negative reading. The latest Brexit poll showed that more people will vote for Britain to remain in the European Union. GBP/USD has reached resistance line connecting February and March highs. Resistance is at 1.4470/1.4500. Support is at 1.4340 and pound looks vulnerable for correction to 1.4260 and 1.4115.

USD/JPY: US dollar made a higher low on and may try to correct up to resistance at 109.75, 110.00 and 110.75. Below support at 108.70 the pair should slide towards 108.00. Watch Philladelphia Fed manufacturing index at 12:30 GMT on Thursday.

AUD/USD: The pair is technically overbought and has potential for correction down. Decline below 0.7800 will open the way down to 0.7750 and 0.7700. Lower levels of oil will help the bears. Above 0.7800 the focus will be on 0.7850, though we are cautious about going long at this point without a sizeable correction down first. 

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