GBP/USD 4/3

The pound continues to gain ground and has risen 1.0% this week. In North American trade, GBP/USD is trading at 1.3182, up 0.37% on the day. On the release front, British Services PMI dropped to 48.9, missing the estimate of 51.0 points. This marked the first decline since June 2017. In the U.S., employment and services data was softer than expected. ADP nonfarm payrolls was dismal, falling to 129 thousand, down from 183 thousand in the previous release. ISM Non-Manufacturing PMI also stumbled, falling from 59.7 to 56.1 points. On Thursday, the U.S. releases unemployment claims.
Soft U.S. numbers this week have raised concerns about the strength of the U.S. economy. The Non-Manufacturing PMI slowed considerably, although it still indicated expansion. Durable goods orders plunged 1.6%, and retail sales fell by 0.2%. The weak numbers have weighed on the dollar, allowing the pound to gain ground despite turmoil and uncertainty over Brexit. Analysts are keeping an eye on GDP, and there are growing worries that first quarter numbers could be dismal. Growth for the first quarter could be as low as 0.8% annualized, compared to 2.2% in the fourth quarter.
GBP/USD was flat in the Asian session. The pair posted slight gains in European trade and the upward movement continues in North American trade
•1.3070 is providing support
•1.3170 is under pressure in resistance
•Current range: 1.3070 to 1.3170
Further levels in both directions:
•Below: 1.3070, 1.2910 and 1.2841
•Above: 1.3170, 1.3258, 1.3362 and 1.3460

How To Trade Forex Using Support and Resistance Levels

Gold

A softer dollar over the last 24 hours has given some reprieve to gold, which slipped below $1,300 last Thursday as the greenback benefited from weakness across a variety of other currencies.
The euro was quite slow to respond to the PMI data but it seems an improvement in overall risk appetite as the morning has progressed has seen it play catch up. This has put further pressure on the dollar, which was already being weighed on by gains in the pound on the back of Theresa May’s attempts to salvage Brexit with the help of the opposition, a move that could see Parliament form a majority around a softer exit.

 

USD/JPY ,,4/2

USD/JPY is almost unchanged on Tuesday. In the North American session, the pair is trading at 111.33, down 0.02% on the day. On the release front, U.S. manufacturing data was dismal. Durable Goods Orders plunged 1.6%, worse than the estimate of -1.1%. Core Durable Goods Orders posted a weak gain of 0.1%, shy of the estimate of 0.3%. There are no Japanese events on the calendar. On Wednesday, the U.S. releases ISM Non-Manufacturing PMI and ADP nonfarm payrolls.
The dollar is steady on Tuesday, despite the disappointing manufacturing data. This comes on the heels of weak retail sales numbers for March. Retail sales declined by 0.2%, shy of the estimate of +0.3%. Core retail sales declined by 0.4%, a sharp drop from the 0.9% gain a month earlier. Both indicators posted a second decline in three months, which is bound to raise concerns about the strength of the economy. Growth for the first quarter could be as low as 0.8% annualized, compared to 2.2% in the third quarter.
The well-respected Japanese Tankan indices pointed to weaker economic activity in the fourth quarter. This was particularly glaring in manufacturing, as the Tankan index slumped to 12 points, down from 19 points in the third quarter. This was the weakest score since 2013. The slowdown in the services index was less pronounced – falling from 24 in Q3 to 21 in Q4. The steep drop in manufacturing was expected, as less global demand for Japanese exports has taken a bite out of manufacturing activity.

Canada’s GDP 4/2

The Canadian dollar ended last week with strong gains, as Canada’s GDP posted a gain of 0.3% in January. This beat the estimate and came after two successive declines, which has raised concerns about the health of the Canadian economy. The slowdown in the fourth quarter has forced the BoC to turn more dovish and shelve any plans of hiking interest rates. There have even been calls for a rate cut from the bank, but the GDP gain in January will lessen the pressure on the BoC to stimulate the economy.
Positive data out of China this week has also boosted the fortunes of the Canadian dollar. Investor risk appetite has risen following a key manufacturing report that was better than expected. Chinese Caixin Manufacturing PMI improved to 50.8, easily beating the estimate of 50.1 points. Investors cheered as the indicator climbed to an 8-month high, after three successive readings in contraction territory. The Chinese economy has been hit hard by the trade war with the U.S., and a piece of good news sparked strong gains on the equity markets and boosted the Canadian dollar.

Canadian dollar 4/1

The Canadian dollar has started the week with slight gains. Currently, the pair is trading at 1.3365, up 0.14% on the day. On the release front, Canada releases manufacturing PMI, which has slowed for three straight months. Will we see a rebound in the March release? In the U.S., retail sales are expected to tick up to 0.3%. On Tuesday, the U.S. posts durable goods orders.
The Canadian dollar ended the week with strong gains, as Canada’s GDP posted a gain of 0.3% in January. This beat the estimate and came after two successive declines, which has raised concerns about the health of the Canadian economy. The slowdown in the fourth quarter has forced the BoC to turn more dovish and shelve any plans of hiking interest rates. There has even been calls for a rate cut from the bank, but the GDP gain in January will lessen the pressure on the BoC to stimulate the economy.