Technical analysis and trading recommendations - https://fxpcm.com/fx/gbp-jpy-eur-week-07032016
The market ignored the strong US data NFP, released on Friday. Unemployment in the US in February remained unchanged at 4.9%. But the other two important parameters with a reduction in out. The average hourly wage decreased by 0.1% (forecast + 0.2% and + 0.5% in the previous month). The average workweek fell to 34.4 hours (the forecast and the Jan 34.6). These two measures and raised the deficit of foreign trade balance in January reinforced the view of market participants that the Federal Reserve will not raise interest rates in the US in March.
After the publication of the report the dollar fell against major European currencies and commodities.
GBP / USD:
Over the past week the pair GBP / USD managed to almost 90% repulse incurred losses for the previous week. Despite strong evidence NFP, on Friday, the pair consolidated at 57 points. Price close to the strong resistance levels 1.4200, 1.4270, while remaining in the downlink. At the same time, the pair GBP / USD is at levels near the lows of 2002, which began a long-term uptrend the pair. In this price zone are also minima of 2009, 2010's. Thus, the pair GBP / USD is in the area of key support levels.
The growth of the pair inhibits the expectation of the June referendum in the UK on the further stay of the country in the euro area. However, the successful actions of British Prime Minister David Cameron, in the direction of UK privilege in the European Union and the statements of European political leaders about the desirability of further stay of the country in the European Union, support the pair GBP / USD.
A break above the levels achieved near the mark of 1.4250 the pair will open the way to 1.4400 marks, 1.4500.
Today is expected to progress in working out Friday in the opposite direction highs. Break down of Friday's lows will return in a couple of downtrend.
USD / JPY:
On Monday at 23:50 (GMT) publishes annual data of Japan's GDP for the 4th quarter. Expected decrease by 1.5% (in addition to a decrease of 1.4% in Q3). Japan is the 3rd largest economy in the world after the US and China. The contribution of the Japanese economy in the global GDP is nearly 10%. At the same time the economy is teetering on the brink of deflation threat, and in February in Japan negative discount rate was introduced. Publication of data on GDP can have a strong impact on the dynamics of the yen and the Japanese stock index Nikkey. Coupled with the anticipation of the publication next week of the Bank of Japan's decision on the monetary policy impact on the market data on GDP can be very large.
He said today the head of the Bank of Japan Kuroda, the Bank of Japan's current policy "is working towards reducing the value of the yen", and inflation of 2% will be achieved.
EUR / USD:
Strengthening the pair up on Friday was 56 points. Volatility also made more than 140 points. With the opening of today's trading day the pair is trading in a narrow range. In view of the movement against the Friday and on the eve of the ECB meeting this week of the EUR / USD pair today is expected to decline.
Thursday 12:45 (GMT) is scheduled publication of the ECB's interest rate in the euro area, and a little later at 13:30 ECB President Mario Draghi will give a commentary on the monetary policy of the ECB. Recall that the previous similar decision at the meeting of the ECB's December 3 caused an increase in the EUR / USD to 5%. The market then found the ECB decision to expand the QE program in the Eurozone insufficient, causing a sell-off of European assets and the pair EUR / USD.
Previously, ECB President M. Draghi has said that during the March meeting of the central bank will revise its measures to stimulate the economy.
Now it is expected that the deposit rate will be reduced by 10 March by 0.1%, while the volume infused liquidity within the QE program will increase by 10 billion Euros to 70 billion Euro. Any deviation in either direction will cause sharp movements in the medium and short periods in European indices and quotations in pairs with the euro, including a pair of EUR / USD.