Daily Market Analysis from ForexMart

EUR/USD. April 19, 2021 | Euro has reached 1.2040

EUR/USD is showing strong gains at the start of the new trading week, reaching 1.2040. The macroeconomic calendar is empty today, so the main factor behind the weakening of the US dollar is still the decline in the yield on 10-year US government bonds.

At the same time, even positive statistics on retail sales in the United States did not help the greenback improve its positions in a pair with the euro. As a reminder, last week a report was published, according to which retail sales in March rose sharply by 9.8% m/m after falling by 2.7% m/m in February. The forecast assumed an increase of 5.8% m/m.

The main event of this week will be the meeting of the European Central Bank (ECB) on Thursday. The regulator must make a decision on the rate (no changes are expected), as well as comment on further policy and the epidemiological situation in Europe.

There are not many American statistics this week: it is worth paying attention to the data on sales of secondary housing and new buildings in March, as well as the parameters of the leading indicators index last month. In addition, there are preliminary data on PMIs in the manufacturing and services sectors from Markit. The eurozone, in turn, will also provide preliminary data on PMIs in the manufacturing and non-manufacturing sectors for April.

EUR/USD. April 16, 2021 | Euro keeps trying to reach the level of 1.20

The EUR/USD pair continues attempts to reach the 1.2000 level. The current quote for the pair is 1.1980.

Yesterday's statistics from the US was rather mixed. Retail sales rose sharply by 9.8% m/m in March after falling 2.7% m/m in February. The forecast assumed an increase of 5.8% m/m. Analysts note that such a strong growth is quite expected: this month the US population again received financial assistance. Moreover, weather conditions have finally stabilized in the United States, making consumers more mobile.

At the same time, the volume of industrial production in the US in March increased by 1.4% m/m against forecasts of growth by 2.7%. However, despite the fact that these numbers are rather weak, they are the highest in the last 8 months.

Statistics on the number of claims for unemployment benefits in the United States showed a decrease to 576 thousand against the previous figure of 769 thousand and the forecast for a reduction to 703 thousand.

Today it is worth paying attention to the final inflation in Europe. The report confirmed the preliminary estimate, which showed earlier growth of the indicator from 0.9% to 1.3%.

EUR/USD. April 20, 2021 | Euro is trying to reach the level of 1.21

The US dollar continues to fall in price against the euro, approaching 1.2100. The current quote for the EUR/USD pair is 1.2070. The American currency is declining even despite the growth of government bond yields, strong data on employment and retail sales.

At the same time, the euro was supported by an increase in the forecast of the investment bank Goldman Sachs, whose analysts adjusted the three-month target for the EUR/USD pair from 1.21 to 1.25. The outlook was upgraded amid expectations that the situation in the Eurozone will improve.

The key event for the euro/dollar pair will be the ECB meeting on Thursday. Analysts expect that rates this time around are likely to remain near the lows, as they have throughout 2021. The regulator's comments on the rapid growth of the consumer price index in Europe and the yield on government bonds will be of much greater interest. But, in general, market participants do not expect any surprises or shocks.

Today the macroeconomic calendar is not rich in events, so investors have the opportunity to calmly watch what is happening on the market and prepare for the ECB meeting.

GBP/USD. April 21, 2021 | Sterling declines from the highs

On Wednesday morning, the British pound is correcting against the dollar, declining from the area of ​​recent highs at 1.4000. The current quote for the GBP/USD pair is 1.3930.

Sterling is declining, despite the rather strong statistics on the labor market in the UK. The unemployment rate fell in February to 4.9% against 5.0% earlier. The number of claims for unemployment benefits in March increased by 10.1 thousand, while in February the figure increased by 67.3 thousand. The forecast assumed an increase of 24.5 thousand.

Experts note that support to the employment sector is provided by a government program that provides for the payment of increased and guaranteed unemployment benefits. The program will run until the end of September 2021.

The UK continues to publish macroeconomic reports today. Particular attention should be paid to the data on inflation in March, where the indicator accelerated to 0.7% y/y against the previous value of 0.4%. However, this turned out to be below the forecast for growth to 0.8%. Also today will be a speech by the head of the Bank of England Bailey.

GBP/USD. April 22, 2021 | Sterling shows correction from 1,40

The British pound has suspended its decline at 1.3900. On Thursday, the GBP/USD pair is showing consolidation, however the RSI indicator is still directed downward, which signals further weakening of the pound sterling.

The statistics released the day before showed that inflation in the UK in March rose by 0.7% YoY, while the forecast assumed an increase of 0.8% y/y. In February, the consumer price index grew by 0.4% y/y. Core inflation in the country accelerated to 1.1% y/y, which coincided with market expectations. Experts expect the UK CPI to rise as electricity bills rise and fuel prices rise. It can be expected that inflation in the UK will reach 2.0% by the end of this year.

Today, the UK economic calendar is empty, so you should pay attention to the data from the US on the number of applications for unemployment benefits. Analysts predict an increase in the indicator to 617 thousand from the previous level of 576 thousand.

GBP/USD. April 22, 2021 | Sterling shows correction from 1,40

The British pound has suspended its decline at 1.3900. On Thursday, the GBP/USD pair is showing consolidation, however the RSI indicator is still directed downward, which signals further weakening of the pound sterling.

The statistics released the day before showed that inflation in the UK in March rose by 0.7% YoY, while the forecast assumed an increase of 0.8% y/y. In February, the consumer price index grew by 0.4% y/y. Core inflation in the country accelerated to 1.1% y/y, which coincided with market expectations. Experts expect the UK CPI to rise as electricity bills rise and fuel prices rise. It can be expected that inflation in the UK will reach 2.0% by the end of this year.

Today, the UK economic calendar is empty, so you should pay attention to the data from the US on the number of applications for unemployment benefits. Analysts predict an increase in the indicator to 617 thousand from the previous level of 576 thousand.

EUR/USD. April 26, 2021 | The bulls broke through the 1.2100 level

EUR/USD looks still strong on Monday, despite a slight correction. The current quotation of the euro is 1.2090, and the recent maximum was marked at 1.2115.

The main support for the euro rate is the growing interest of investors in risky assets. An additional positive was the Friday statistics on business activity in the euro area: the PMI index in the service sector in April rose to 50.3 points against the previous value of 49.6. Business activity in the manufacturing sector increased to 63.3 points from the previous 62.5.

At the same time, the indicators of Germany, the largest economy in Europe, disappointed the markets: the index of business activity in the service sector in April fell to 50.1 points from 51.5 earlier, and in manufacturing – fell to 66.4 points from 66.6 in March. And today's IFO business climate index also fell short of forecasts, rising only to 96.8 points (forecast – 97.8).

At the end of last week, the US also shared data on business activity. The PMI index in the manufacturing sector from Markit in April strengthened to 60.6 points from the previous 59.1 points, in the non-manufacturing sector – rose to 63.1 points from 60.4 points in March. Today we should pay attention to the report on orders for durable goods in the US in March. Forecasts assume an increase of 2.5% m/m after a decline of 1.2% m/m in February.

Brent. April 27, 2021 | Oil rises in anticipation of OPEC meeting

On Tuesday, Brent quotes are growing moderately, recovering to the level of $65.70 per barrel. Oil prices were supported by the decision of OPEC+ to raise the short-term forecast of world oil demand growth to 6 million barrels per day from the March estimate of 5.6 million.

Today, a day ahead of schedule, a meeting of the OPEC ministerial monitoring committee will take place. OPEC Secretary General Mohammed Barkindo in his recent speech noted that the oil market is experiencing a significant improvement in prospects, and the excess oil reserves formed in the world market during the pandemic will completely disappear by the end of this quarter.

At the same time, many risks remain relevant, primarily associated with the deterioration of the epidemiological situation in India, Japan and a number of other regions. India is one of the largest oil importers, so the introduction of additional quarantine restrictions will inevitably impede the recovery in demand for raw materials.

EUR/USD. April 27, 2021 | Euro corrected after reaching local highs

The US dollar is showing signs of strengthening against the euro, reaching 1.2050. The American currency is supported by expectations of the results of the two-day meeting of the US Federal Reserve System.

Market participants assume that the regulator will confirm its readiness to continue buying back assets in the same volumes in order to achieve maximum employment and price stability. However, many also admit that even before the end of this year, the Fed is announcing plans to gradually reduce monthly asset repurchases (currently the amount is $120 billion), as the US economy shows signs of a rapid recovery from the Covid pandemic.

Also, the regulator is not expected to change the base rate and monetary policy parameters. The main attention of traders on Wednesday will be attracted by the press conference of the head of the Federal Reserve System Jerome Powell, from whom they expect signals about when the Fed may begin to cut stimulus.

Today the macroeconomic calendar is almost empty. It is worth paying attention only to the CB consumer confidence index in the USA. Analysts expect a slight increase in the indicator.

EUR/USD. April 29, 2021 | Dollar weakened after the US Federal Reserve meeting

On Thursday, the EUR/USD pair started to rise sharply and reached the level of 1.2150. The US dollar was pressured by the results of the US Federal Reserve meeting and the subsequent speech by the head of the regulator Jerome Powell.

The US Federal Reserve System has left the interest rate unchanged in the target range of 0-0.25% per annum. In addition, the Fed kept the volume of purchases of Treasury bonds in the amount of $80 billion monthly, as well as the purchase of $40 billion in mortgage-backed securities unchanged. The regulator noted that it will continue to buy back bonds until progress is made on GDP and inflation.

The general tone of the Central Bank's comments turned out to be restrained and soft, which put pressure on the dollar's position. Jerome Powell said the economic recovery is still fragile and the coronavirus situation remains worrisome.

The macroeconomic calendar today is presented by data on US GDP for the first quarter of the year and the number of applications for unemployment benefits. The Eurozone will share statistics on inflation in Germany in April.

Brent. April 28, 2021 | Oil rises amid improved forecasts for global demand

Oil prices shifted to growth on the back of optimistic forecasts for global demand. The current Brent quotation is $66.30 per barrel. At the same time, the risks, in the form of the rapid spread of the coronavirus in India and the exceeding expectations of the growth of oil reserves in the United States, limit the rise in prices.

Today, the joint technical committee of OPEC+ has kept the forecast for the growth of global oil demand in 2021 at the level of 6 million barrels per day. Moreover, the organization intends to adhere to plans for a phased release of production restrictions from May to July, which also strengthens producers' confidence in a recovery in global demand.

Analysts at Goldman Sachs bank expect the sharpest jump in oil demand ever – an increase of 5.2 million barrels per day over the next half year. And the easing of restrictions on movement between the countries in May will lead to a recovery in global demand for jet fuel by 1.5 million barrels per day.

Yesterday was published a report from the American Petroleum Institute (API), according to which US oil reserves unexpectedly rose by 4.3 million barrels. Today you should pay attention to a similar report from the US Department of Energy. Analysts predict an increase in reserves by 650 thousand barrels.

EUR/USD. April 28, 2021 | The pair consolidates under 1.21 in anticipation of the Fed meeting results

Today the EUR/USD pair continues to consolidate below the 1.2100 level ahead of the Fed meeting. The current price of the instrument is 1.2070. It is unlikely that the quotes will be active until the results of the meeting are announced.

Yesterday in the US was published statistics on the house price index for February: the indicator showed an increase of 0.9 m/m against the forecast of growth of 1.0% m/m. A report from the Conference Board was also presented, according to which the consumer confidence index unexpectedly rose sharply in April and amounted to 121.7 points against the forecast of growth to 113.1. The March indicator was marked at the level of 109.0 points. The current value of the indicator has become the highest in 14 months.

Today the macroeconomic calendar is empty, all the attention of market participants is focused on the results of the meeting of the Federal Reserve System and its decision on the rate and further monetary policy.

EUR/USD. April 30, 2021 | The pair is consolidating below the 1.21 level

On Friday, the EUR/USD pair started to decline, reaching the level of 1.2075. The dollar received support from data on US GDP, whose growth exceeded analysts' forecasts: from January to March, the economy grew by 6.4% versus 4.3% a quarter earlier.

The results of the meeting of the Federal Reserve System showed that the American regulator is not yet ready to curtail incentives, despite the optimism about the US economy. The Fed still expects when the country's macroeconomic indicators begin to show a stable increase.

Today you should pay attention to the data on GDP in Germany for the first quarter. The financials disappointed investors as the index fell 1.7% qoq, while analysts had forecast a decline of only 1.5%. On an annualized basis, the German economy contracted 3.3%, better than forecast for a decline of 3.6%. The GDP of the entire eurozone exceeded forecasts: the region's economy contracted by 0.6% qoq (forecast -0.8%). In annual terms, the economy contracted by 1.8% (forecast 2.0%).

Thus, the EUR / USD pair is consolidating under the influence of ambiguous statistics. The RSI indicator is corrected to the neutral zone, which indicates the formation of a flat below the 1.2100 level.

EUR/USD. May 3, 2021 | The US dollar started the week on a minor note

The US dollar ended April on a positive note, but on the first Monday in May, the american currency weakened to 1.2050. The main influence on the dynamics of the EUR/USD pair is provided by macroeconomic publications from the USA and the Eurozone.

At the end of last week, the US released data on personal income and spending of Americans in March. Revenues rose 21.1% m/m against the forecast of a rise of 20.1% and the previous decline of 7%. Expenses, in turn, increased by 4.2% on the expectation of an increase of 4.3% m/m and the previous decline of 1.0%. It should be noted that such a rapid growth in income is the result of cash payments to the population.

Additional support to the dollar was provided by the final value of the consumer confidence index in the US from the University of Michigan: in April the indicator rose to 88.3 points against the forecast of an increase to 87.3 and the previous value of 86.5 points.

The European currency was supported this morning by the statistics on the volume of retail sales in Germany in March: in monthly terms the indicator increased by 7.7% against the forecast of growth of only 3%. The annual rate rose 11% after falling 6.6% in February. At the same time, the indexes of business activity in the manufacturing sectors of the eurozone and Germany for April disappointed the markets, falling short of forecasts.

The United States will also publish PMI in the evening. In addition, there will be data on construction costs and the price paid index. And also the head of the US Federal Reserve System Jerome Powell will make a speech.