EUR/USD Eyes 2018-High Ahead of Euro-Zone Confidence Surveys

FX TALKING POINTS:

EUR/USD Initiates Fresh Series of Higher Highs Lows Ahead Euro-Zone Confidence Surveys. 2018-High (1.2556) on a Radar as Bullish Momentum Gathers Pace.

USD/JPY Carves Bullish Outside-Day (Engulfing). Relative Strength Index (RSI) Divergence Takes Shape as Oscillator Holds Above Oversold Territory.

DailyFX Table

EUR/USD INITIATES FRESH SERIES OF HIGHER HIGHS LOWS AHEAD EURO-ZONE CONFIDENCE SURVEYS. 2018-HIGH (1.2556) ON THE RADAR.

EUR/USD Table

EUR/USD climbs to a uninformed monthly-high (1.2462) during a final full-week of March, and a new allege in a sell rate might accumulate gait over a entrance days as it triggers a uninformed array of aloft highs lows.

EUR/USD appears to be on lane to exam a 2018-high (1.2556) as it breaks out of a parsimonious range, though a slew of Euro-Zone certainty surveys might drag on a single-currency as domicile and businesses view is approaching to slight in March. A slew of gloomy developments might furnish headwinds for a Euro as it encourages a European Central Bank (ECB) to serve enhance a change sheet, and President Mario Draghi and Co. might continue to validate a wait-and-see proceed during a subsequent assembly on Apr 26 as ‘domestic cost pressures sojourn pale altogether and have nonetheless to uncover convincing signs of a postulated ceiling trend.

However, a Governing Council might have small choice though to exhibit a some-more minute exit plan as a quantitative easing (QE) module is set to finish in September, and a flourishing array of ECB officials might start to adopt a hawkish tinge as ‘the latest information and consult formula indicate to plain and broad-based enlargement momentum.’ With that said, a broader change in EUR/USD might continue to take figure over a entrance months as a ECB gradually adjusts a opinion for financial policy.

EUR/USD DAILY CHART

EUR/USD Daily Chart

  • Near-term opinion for EUR/USD has perked adult as a bullish array starts to take shape, with a Relative Strength Index (RSI) exhibiting a identical energetic as it breaks out of a downward trend carried over from a prior month.
  • Another tighten above 1.2430 (50% expansion) raises a risk for a run during a 2018-high (1.2556), with a subsequent topside jump entrance in around 1.2640 (61.8% expansion) to 1.2650 (38.2% retracement).

USD/JPY CARVES BULLISH OUTSIDE-DAY (ENGULFING). RELATIVE STRENGTH INDEX (RSI) DIVERGENCE TAKES SHAPE.

USD/JPY Table

USD/JPY snaps behind from a uninformed 2018-low (104.63) notwithstanding a ongoing hazard of a tellurian trade war, and new cost movement highlights a risk for a incomparable miscarry as a dollar-yen sell rate carves a bullish outside-day (engulfing) formation.

Keep in mind, USD/JPY might face choppy cost movement going into a finish of a month as marketplace appearance is approaching to slight forward of a Easter holiday, and uninformed comments from Fed officials seem to be carrying a singular impact on a sell rate even as Cleveland Fed President Loretta Mester, a 2018-voting member on a Federal Open Market Committee (FOMC), warns that ‘further light increases in seductiveness rates will be suitable this year and subsequent year.’

Fed Fund Futures

With that said, quarter/month-end flows might mostly foreordain cost movement opposite a FX marketplace as a FOMC is widely approaching to keep a benchmark seductiveness rate on reason during a subsequent assembly in May, and a USD/JPY selloff from a yearly-high (113.39) might continue to uncover over a entrance days as a Relative Strength Index (RSI) starts to deviating with price.

USD/JPY DAILY CHART

USD/JPY Daily Chart

  • USD/JPY carves a bullish outside-day (engulfing) arrangement after unwell to exam a 104.10 (78.6% retracement) to 104.20 (61.8% retracement) region, with a span during risk for a near-term improvement generally as a Relative Strength Index (RSI) binds above oversold territory.
  • Another tighten above 105.40 (50% retracement) raises a risk for a pierce behind towards 106.70 (38.2% retracement) to 107.20 (61.8% retracement), with a subsequent segment of seductiveness entrance in around 108.30 (61.8% retracement) to 108.40 (100% expansion) followed by a Fibonacci overlie around 109.40 (50% retracement) to 110.00 (78.6% expansion).

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— Written by David Song, Currency Analyst

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