· The U.S. dollar was flat on Thursday after the release of the Federal Reserve’s March meeting minutes.
The U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 96.523 by 1:40 AM ET (05:40 GMT), down 0.04%.
The majority of policymakers expect the central bank to remain on pause for the rest of the year, the minutes showed.
However, Fed officials left the door open for more rate hikes by saying some policymakers under certain circumstances could “judge it appropriate to raise the target range for the federal funds rate modestly later this year.”
· Meanwhile, the euro recovered some of its early losses in the wake of the European Central Bank's unchanged decision on interest rates and downbeat economic remarks from ECB President Mario Draghi.
The EUR/USD pair last traded at 1.1280, up 0.1%.
· The GBP/USD pair was also up 0.1% to 1.3103 after European Union leaders and the U.K. agreed to a “flexible extension ” of the Brexit deadline till Oct. 31, which Prime Minister Theresa May has accepted.
· EUR/USD TECHNICAL ANALYSIS
Despite its decline on Draghi’s speech, EUR/USD extended its climb by the end of the day as it is now on its best winning streak since the middle of March. This followed the emergence of a Morning Star candlestick pattern and positive RSI divergence, both typically bullish price signals. As such, we may see a test of resistance next around 1.13022, guided by a rising support line from the bottom in early April.
· AUD/USD correcting further to test 0.7150 amid risk-off, mixed China data
The selling interest in the AUD is seen gathering pace last hour, as markets weigh in mixed Chinese CPI and PPI releases amid souring risk sentiment. The AUD/USD pair extends its corrective slide from 2-month tops and looks to test the 0.7150 support.
· USD/JPY holds steady near 111.00 amid Trump’s comments
The USD/JPY pair keeps the bid tone intact near 111.00, although the upside appears capped amid souring risk appetite, as markets digest the latest tweet by the US President Trump on the US-EU trade partnership.
The USD/JPY pair bounced from the mentioned low but hovers below the 111.00 level ahead of the Asian opening, and with the risk skewed to the downside according to the 4 hours chart, as the pair has broken below all of its moving averages, and with the 20 SMA accelerating its decline above the larger ones. Technical indicators remain below their midlines, recovering modestly but far from daily highs. Furthermore, the pair is developing below the 38.2% retracement of its latest daily rally at around 111.00, although it will take an advance beyond 111.20 to change the current bearish tone.
Support levels: 110.75 | 110.40 | 110.00
Resistance levels: 111.20 | 111.55 | 111.80
· GBP/USD seesaws around 1.3100 despite odds favoring long Brexit extension
The GBP/USD pair is trading near 1.3090 during the early Asian session on Thursday. While dovish sentiment surrounding the Fed, soft US data and optimism for long Brexit extension helped the Pound to remain positive so far, traders still await final confirmation from the EU summit.
The pair eased from its highs, now trading below the 1.3100 figure, once again unable to advance beyond the 1.3100 figure, and, in the 4 hours chart, above its 200 EMA. In the mentioned timeframe, the pair holds above a mild positive 20 SMA, while technical indicators ease within positive levels, holding in neutral ground, somehow leaning the risk toward the downside, although the pair would need to break below 1.2965, over 100 pips away, to confirm bears took control of the pair. In the meantime, Brexit uncertainty will likely keep the pair within familiar levels.
Support levels: 1.3050 | 1.3000 | 1.2965
Resistance levels: 1.3120 | 1.3160 | 1.3195
· China’s economy will likely grow far faster than the official target of 6 to 6.5 percent this year due to stronger fiscal stimulus including tax cuts and faster debt sales, according to analysts at Jefferies Financial Group Inc.
The pace of growth will normalize in 2020, Jefferies analysts, including Laban Yu, wrote in a report dated Wednesday.
While significant monetary easing may be less likely from here, growth momentum could push the stock market to test early 2018 highs, the analysts said. China’s economy has already shown signs of recovery, with a strong reading of manufacturing and improving risk appetite.
· China’s factory-gate inflation picked up for the first time in nine months in March, lifted by price rises in global commodities as well as signs that government efforts to boost the economy may be putting a floor under domestic demand.
China’s producer price index (PPI) in March rose 0.4 percent from a year earlier, driven largely by rapid rises in oil and gas prices, and advancing from a 0.1 percent increase in February, the National Bureau of Statistics (NBS) said.
· Some 900 million voters in India will elect members to the lower house of Parliament from today in an election that will spread over seven phases and end on May 19.
The main contenders for the election are Narendra Modi’s Bharatiya Janata Party and its allies, and the Indian National Congress and its allies.
Prime Minister Narendra Modi and his ruling Bharatiya Janata Party hope to win power for a second five-year term — but opinion polls suggest it could be a close fight to the finish.
The coalition led by Modi’s party is predicted to win 273 of the 543 parliament seats being contested, one seat more than the number needed to govern, Reuters reported.
· Oil prices fell on Thursday, pressured as US crude stockpiles surged to their highest levels in almost 17 months amid record production and as economic concerns cast doubt over growth in demand for fuel.
International benchmark Brent futures were at $71.44 per barrel at 0424 GMT, down 29 cents, or 0.4%, from their last close.
US West Texas Intermediate (WTI) crude oil futures were at $64.28 per barrel, down 33 cents, or 0.5%, from their previous settlement.
· Oil markets are tightening at the start of the second quarter amid a flurry of intensifying risk indicators, the International Energy Agency (IEA) said Thursday.
But, the group warned an “extraordinarily” wide range of views about the health of the global economy was making it difficult to forecast oil prices.
It comes at a time when energy market participants are concerned surging U.S. crude stockpiles and an economic slowdown could soon dent fuel consumption.
However, global oil markets remain firm, amid OPEC-led supply cuts, U.S. sanctions on oil exporters Venezuela and Iran and escalating fighting in Libya.
· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices continue to test support-turned-resistance in the 63.59-64.88 area. A daily close above it would bring the 66.09-67.03infection zone immediately into focus, with a subsequent breach of that opening the door for a move to challenge the $70/bbl figure. A break below rising trend support set from late December – now at 60.39 – is needed to neutralize immediate upward pressure, exposing the 57.24-88 region next.
Reference: CNBC, Reuters, Daily Mail, FXStreet
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