The pair is under the improved attitude pressure towards the dollar as well as the euro sales amid the ECB large-scale quantitative easing program. The Eurozone annual growth rate, smaller than expected M3 (4.0% in February compared with expected growth by 4.3%), as well as a continued uncertainty about the situation in Greece put pressure upon the pair. However, the attitude towards the euro has improved after stronger than expected Germany GfK consumer confidence index growth (to 10.0 in April from 9.7 in March while it was expected 9.9).
We recommend to short with the first target of 1.0750-1.0770. Shall the pair overcome this level, the level of 1.0630-1.0650 may become the new target.
The pair is trading under the market improved attitude pressure towards the dollar and the British pound sales within the declining pound/yen amid the easing risk appetite. The market’s good attitude towards the pound was caused by the UK February retail sales growth that exceeded our expectations (+ 0.7% m/m, + 5.7% y/y while it was forecasted + 0.4% and + 4.7%) and according to the CBI, the retail sales index also exceeded our expectations in March (+18 in March against +1 in February while it was forecasted + 15). The pair potential decrease is limited by the demand for the pound now.
Be advised to short to 1.4750-1.4770. The second target is the level of 1.4680-1.4700.
The pair is supported by the improved attitude towards the US dollar and the US Treasury bond yields growth amid lower than expected initial jobless claims number. According to the Markit, the pair is also supported by the stronger than expected prior composite purchasing managers index growth (PMI). In addition, the USD/JPY is also supported by the demand from the Japanese importers and the Bank of Japan extremely loose monetary policy.
It is now recommended to sell with the first target of 118.50-118.70. If the first target is overcome the level of 118.00-118.20 may become the new target.
Analyst of «FreshForex» company