The week ended earlier this time, with majors trading mute across the board this Friday, even in spite of the final revision of the US GDP figures for the last quarter of 2015. Real Gross Domestic Product was revised higher, to 1.4% from the previous estimate of 1.0%. During the third quarter, the US growth was of 2.0%, and the final figure confirmed what the market largely know that growth has somehow decelerated in the country by the end of last year.
The news had zero impact in currencies, with the largest spike seen being of 10 pips, given that all major markets are closed on holidays. Due to an early close, the forex board shows that the dollar stands as the weekly winner, but also that's too early to call for a bullish continuation, given that the recovery is far beyond several critical levels. The Pound underperformed its major rivals, and is the one in more risk of plummeting next week.
View the Live chart of the EUR/USD
The EUR/USD, however, is stuck around the 61.8% retracement of its FED-driven rally, at 1.1165, and the daily chart shows that a bearish continuation is still out of the picture, given that the 20 DMA heads sharply higher in the 1.1130 region, while the technical indicators have turned flat well above their mid-lines and after correcting overbought readings. More relevant the 100 DMA is gaining upward strength approaching the 1.1000 figure. Weekly basis, the pair maintains a neutral stance, firm within the 1.0800/1.1400 range, ever since last November.
FED's officers have been behind this latest dollar's recovery, offering a far more hawkish tone during these last few days, than the one given by the FOMC's statement. But is that enough to put the greenback on the bullish track? The most likely answer is no. Markets don't believe that the Central Bank will act in April, and the most optimistic scenario says that on the April meeting, they will open doors for a June rate hike, but without confirming it. The positive change in FED's mood may give the greenback a lift, but we are three weeks away from that.
In the meantime, the US will release next week its CPE figures, and March employment data.Should both surprise to the upside, the greenback will likely add to its recent rally. For the EUR/USD pair, the immediate support comes at 1.1120, with a break below it sending it down towards the key 1.1000 level, where buying interest will likely resume. Below this last, the decline can then extend down to 1.0860, particularly if the dollar is strong ahead of the NFP and this last surprises towards the upside.
A recovery above 1.1200 alongside with disappointing US data, can see the pair returning to the 1.1330/70 region, en route to 1.1460 a long term static resistance that has contained buyers ever since the beginning of 2015.
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