23, April 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The trading for the major pairs was again in a narrow range due to the low liquidity. In important macroeconomic statistics only the report on the trade balance in Japan on March publication should be highlighted. Negative balance increases which indicates the Japanese exporters continuing stagnation.

There is the rise in consumer confidence in the first month of the spring which is favorable for the real estate market. Due to this fact, we can expect the data release, which is slightly better, then the median forecast which supports a moderate demand for the U.S. dollar.

The U.S.’ economic activity index from Chicago Fed fell down in March from 0.53 to 0.20 with the previous month which was in the line with expectations. The index rose up to 0.53 in February, and not to 0.14, as it was originally reported. The three-month average index value which smoothes out volatility, rose up to 0.00, compared with -0.14 claim in February. Index still indicates an increase in activity, although it pointed to a slowdown. The largest contribution to the fall was made by the production indicators, as well as by the sales subindex.

The "bulls" still expect the quotations growth and buy the British currency on pullbacks, but today it is difficult to expect a good “cable” growth. The UK’s important macroeconomic releases publication are not expected - on the contrary, the external background can have moderate support for the U.S. dollar. In general, we can expect the side trend development.

The yen fell down to its lowest level versus the dollar in two weeks after the on the trade balance in Japan weak data release. Japan's trade deficit widened in March to 1.45 trillion yen, compared with a deficit of 0.80 trillion yen which was a month earlier, considerably above expectations at 1.07 trillion yen.

The current yen level has a negative impact on the exporters’ activities and to reduce the trade deficit there should be a yen further weakening. The US will publish the real estate market report which can reassure the “bulls” to open the long positions.