Euro Remains In Uptrend”
The euro strengthened against the dollar in European trading session on Friday after the release of economic data showed that the euro zone manufacturing activity is higher than market expectations. In a report, Markit said the Eurozone Markit manufacturing PMI rose to 51.6 from 51.4 in the previous month. Analysts expected that the manufacturing activity would be unchanged at 51.4.
Some correction occurs on EUR/USD but the pair remains in bullish bias in general. Reference area is at 1.1337-1.1388. 20 MA and 50 MA are still rising on hourly chart. Hourly stochastic and CCI have confirmed bullish signals. There is a huge possibility for euro to rebound up to 1.1407-1.1437.
The level of 1.1337 is intraday key support level. If the support breaks, the intraday bias may turn to bearish and possibly will drag euro lower to 1.1310-1.1275.
“Canadian Dollar Weakened As Oil Prices Fell”
The Canadian dollar weakened to its lowest level in three days against the USD on Friday as oil prices fell and after US jobs data were released stronger than expected. Oil prices fell after Saudi Arabia said that they would hold production levels of oil output only if Iran and other major oil producers agree to act together. The US dollar maintained its gains against the loonie after the release of solid US jobs data that could allow the Federal Reserve to Raise interest rates gradually this year. Canadian RBC Manufacturing PMI also rose.
USD/CAD has broken above 20 MA and 50 MA on hourly chart. 20 MA has crossed above 50 MA. Correction occurs to the reference area at 1.3035-1.2966. Note that hourly stochastic has crossed down and CCI is falling from the overbought area. The correction possibly will move lower to within the reference area at 1.3035-1.2966. Watch for bullish signal confirmation on a pull-back move to within the reference area with target at 1.3077-1.3145.
Be careful if the support at 1.2966 breaks because it possibly will turn the intraday bias to bearish and open the chance for a bearish move to 1.2918-1.2856.
“Sterling Is Under Pressure”
Sterling weakened for the third day against the USD, extending losses from Thursday when data showed that the current account deficit widened. The weakening of the pound seems unstoppable despite other data today showed the UK economy grew to the highest level from the previous estimate in late 2015.
Markit Economics on Friday reported that the UK Markit manufacturing PMI rose to 51 from 50.8 in February. Markit also added that the average rate for the first quarter of this year is equal to the lowest level since 2013.
GBP/USD currently is under heavy pressure. The price is testing the intraday key support at 1.4170. If the support breaks, sterling possibly will fall to 1.4100-1.4042. On the other hand, hourly stochastic and CCI are oversold. As alternative strategy, watch for bearish signal confirmation on a pull-back move to within the reference area at 1.4267-1.4328 with target at 1.4230-1.4170.
Be careful if the resistance at 1.4328 breaks because it possibly will turn the intraday bias to bullish and open the chance for a bullish move up to 1.4370-1.4425.
“Hang Seng Falls, Watch For Bearish Signal”
S&P lowered its outlook for economic growth in Hong Kong to negative from stable but affirmed very good for long-term credit rating for Hong Kong.
It is said that negative rating reflects the views of the central government in China. S&P said that Hong Kong rate also reflects the prospects for economic growth above the average for the economy of high-income, sound fiscal performance, quite large fiscal reserves, strong external positions, and the credibility of monetary policy, in spite of the limitations of the exchange rate.
Hang Seng currently is under pressure. 20 MA has crossed below 50 MA on hourly chart and the index currently is moving below them. A pull-back move is approaching the reference area at 20566-20734. Note that hourly stochastic has crossed up, CCI is rising from the oversold area. Watch for bearish signal confirmation on a pull-back move to within the reference area with target at 20461-20292.
Be careful if the resistance at 20734 breaks, because it possibly will turn the intraday bias to bullish and potentially will be followed by a bullish move up to 20855-21008.
Research by Andrew Bulan of EconomicCalendar.com