Recession risks in the euro area are rising, with eurozone inflation seen running hot

•  Meeting minutes showed the Federal Reserve preparing to move aggressively to fight inflation
• The euro bucked the trend but was near a one-month low below $1.09
• Minutes from the Fed meeting showed "many" participants were prepared to raise interest rates

Forex market

The dollar hovered near two-year highs against a basket of major currencies today after meeting minutes showed the Federal Reserve preparing to move aggressively to fight inflation, while commodity currencies fell further from recent peaks. The euro bucked the trend but was near a one-month low below $1.09 as investors await European Central Bank minutes due later. 

Minutes from the March Fed meeting published on Wednesday showed "many" participants were prepared to raise interest rates in 50-basis-point increments in the coming months. They also prepared markets for a reduction in the Fed's balance sheet after the May meeting at a rate of $95 billion per month, the beginning of the reversal of the massive stimulus pumped into the economy after the COVID-19 pandemic struck. That's nearly twice as quick as was seen during the last balance sheet run down during the 2017-19 cycle. 

Economic Calendar

All of the above points to the Fed applying a heavy foot to the brakes, which should be positive for the dollar. The Australian and New Zealand dollars fell between 0.3%-0.2% to sit around 2% beneath highs struck on Tuesday as the Fed's tone has offset a hawkish shift from Australia's central bank, and a pullback in commodity prices whacked them. 

An increasingly close-looking presidential election in France is another wildcard, and the risk of far-right candidate Marine Le Pen beating incumbent Emmanuel Macron has dragged on the euro and French debt ahead of Sunday's first-round vote. The euro scraped itself from a one-month trough of $1.0874 to hit $1.09 in early European trading. 

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The Japanese yen was pinned near a one-week low and last traded at 123.80 to the dollar. Inflation differentials and the resulting monetary policy divergence dynamics can underpin DXY resilience near term. High inflation is here to stay and the hawks are in the driving seat. This matters for DXY given the strength of relative rates in driving EURUSD and USDJPY recently. Sterling recovered some of its recent losses to trade at $1.31. 

Broad selling of equities and other risk assets this week has also hurt cryptocurrencies.

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Euro-EUR

The single currency traded lower as recession risks in the euro area are rising, with eurozone inflation seen running hot for the remainder of 2022 and the European Central Bank likely to increase its deposit rate by year-end, a Reuters poll showed. While inflation hit another record high of 7.5% in March, it is still months from a peak. Overall, the EUR/USD traded with a low of 1.0898 and a high of 1.0987 before closing the day around 1.0903 in the New York session.

Japanese Yen-JPY

The Japanese Yen fell as the dollar hovered near two-year highs against a basket of major currencies today after meeting minutes showed the Federal Reserve preparing to move aggressively to fight inflation, while commodity currencies fell further from recent peaks. High inflation is here to stay and the hawks are in the driving seat. Overall, the USD/JPY traded with a low of 122.35 and a high of 123.65 before closing the day around 123.58 in the U.S session.

British Pound-GBP

The British Pound held near a three-week low versus the dollar as the latest comments by Fed officials highlighted a growing divergence between the U.S and British central banks on how to tackle inflationary pressures. Against the euro, the sterling was little changed. A hawkish stance from the Fed had bolstered the dollar and contrasts with the Bank of England. Overall, the GBP/USD traded with a low of 1.3064 and a high of 1.3165 before closing the day at 1.3070 in the New York session.

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Canadian Dollar-CAD

The Canadian Dollar was little changed yesterday as oil prices rose and investors awaited potential clues on the outlook for the Federal Reserve's bloated balance sheet. The price of oil, one of Canada's major exports, rose as the threat of new sanctions on Russia raised supply concerns, countering fears of weaker demand following a build-in U.S crude stockpiles. Overall, USD/CAD traded with a low of 1.2400 and a high of 1.2495 before closing the day at 1.2483 in the New York session.

Australian Dollar-AUD

The Australian Dollar lost ground today as markets wagered on an ever-more aggressive cycle of U.S rate rises that would threaten both the outlook for global growth and the Bull Run in commodities. A very hawkish set of Fed minutes added to the frenzy to price in rises in U.S interest rates. Investors have also priced in more tightening by the Reserve Bank of Australia (RBA), though not quite to the same extent. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

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Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has gained 0.04%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has gained 0.36%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has gained 1.13%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has lost 0.30%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.05%.

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The U.S dollar was boosted yesterday by hawkish comments from Federal Reserve officials

• The dollar's moves were primarily a function of Brainard's hawkish comments
• The euro struggled yesterday amid concerns about the outcome of the French elections
• The Australian dollar is boosted by the prospect of policy tightening by the Reserve Bank of Australia

Forex market

The U.S dollar hit its highest in nearly two years yesterday, boosted by hawkish comments from Federal Reserve officials who pushed for a quick reduction in the central bank's bloated balance sheet, with one of them expressing openness to hefty rate increases of half a percentage point. The dollar index rose as high as 99.526, the highest since late May 2020. It was last up 0.5% at 99.498. Fed Governor Lael Brainard, usually one of the Fed's more dovish policymakers, said on Tuesday she expects methodical interest rate increases and rapid reductions to the Fed's nearly $9 trillion balance sheet to bring U.S. monetary policy to a "more neutral position" later this year.

Economic Calendar

Further tightening will follow as needed. Kansas City Fed President Esther George, a voting member of the Federal Open Market Committee, also in remarks on Tuesday supported a rapid run-off of the Fed balance sheet, and said as well that "50 basis-points is going to be an option that we'll have to consider." The dollar's moves were primarily a function of Brainard's hawkish comments today. She was very clear on two things. One, the Fed wants to reduce the balance sheet quite aggressively and much more quickly than the last cycle. And two, the Fed is really open to a 50-basis point hike and could do so at any point over the next few meetings. 

Crypto Trading Signals

This is the kind of language that you don't see from many Fed officials, especially Brainard. The dollar rose 0.7% against the yen to 123.63 yen after earlier hitting a one-week peak of 123.66. On March 28, the dollar soared to 125.105 yen, the highest level since August 2015. The euro, on the other hand, struggled amid concerns about the outcome of the French elections. It was down 0.6% at $1.0901 and matched a low of $1.09 hit on March 14. 

Just days earlier amid increased optimism over an end to Russia's invasion of Ukraine, the euro rose to a one-month high of $1.1185. President Emmanuel Macron is still ahead in opinion polls but his far-right Eurosceptic rival Marine Le Pen has been closing the gap, and a poll on Monday put victory within the margin of error, unnerving investors ahead of the French presidential election's first round on Sunday. Expected price swings for the euro, or implied volatility, climbed to three-week highs.

Forex and Commodities Trading Signals

Euro-EUR

The single currency fell today in the Asian trading session to its lowest level in one month against a strengthening dollar as the prospect of new Western sanctions on Russia added pressure to the European currency. A new round of sanctions against Russia are expected to be announced today by the U.S. and the EU. Overall, the EUR/USD traded with a low of 1.0898 and a high of 1.0987 before closing the day around 1.0903 in the New York session.

Japanese Yen-JPY

The Japanese Yen traded lower as the U.S dollar hit its highest in nearly two years yesterday, boosted by hawkish comments from Federal Reserve officials who pushed for a quick reduction in the central bank's bloated balance sheet, with one of them expressing openness to hefty rate increases of half a percentage point. Overall, the USD/JPY traded with a low of 122.35 and a high of 123.65 before closing the day around 123.58 in the U.S session.

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British Pound-GBP

The British Pound held at one-week highs versus the euro yesterday as strong data boosted the British currency while the euro struggled on growing concerns about far-right candidate Marine Le Pen winning this month's French presidential elections. Positive British PMI data supported the pound, building on Monday's gains. Overall, the GBP/USD traded with a low of 1.3064 and a high of 1.3165 before closing the day at 1.3070 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar gained as Canada's exports rose 2.8% in February to a record high, driven mostly by energy products, while imports climbed 3.9% from the previous month, data from Statistics Canada showed yesterday, with economists anticipating more gains for exports ahead. The country's trade surplus with the world narrowed to C$2.66 billion. Overall, USD/CAD traded with a low of 1.2400 and a high of 1.2495 before closing the day at 1.2483 in the New York session.

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Australian Dollar-AUD

The Australian Dollar rallied in choppy trading led by the Australian dollar, boosted by the prospect of policy tightening by the Reserve Bank of Australia (RBA), while the euro fell on French election worries and the likelihood of more sanctions on Russia over Ukraine. The Aussie dollar paced gains among commodity currencies after the RBA dropped its pledge to be "patient" on tightening policy. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has gained 0.04%.

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Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has gained 0.36%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has gained 1.13%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has lost 0.30%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.05%.

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A stronger dollar makes gold less attractive for other currency holders

US stock markets: Stocks on global indexes rose yesterday, with the NASDAQ and growth names leading gains on Wall Street, while the U.S. dollar strengthened on talk of more sanctions against Moscow following international outrage over Ukraine civilian killings. 

Adding to investor caution, the 2-year/10-year Treasury yield curve remained inverted, signaling to some market watchers that a recession may follow in one to two years. The deaths in Bucha, outside Kyiv, are likely to galvanize the United States and Europe into additional sanctions against Moscow over its invasion of Ukraine. 

Economic Calendar

The prospect of more sanctions boosted oil prices which jumped over 3%. The dollar gained for the third straight session as investors sought safety in the greenback. The dollar is bouncing higher as geopolitical developments have darkened clouds over the global economy. The Kremlin, which calls its action a "special operation," denied accusations related to the murder of civilians.

Dow Jones Industrial Average

The Dow Jones Industrial Average added 0.30%. The biggest gainers of the session on the Dow Jones Industrial Average were Salesforce.com Inc., which rose 3.11% or 6.60 points to trade at 218.85 at the close. Apple Inc. added 2.37% or 4.13 points to end at 178.44 and Intel Corporation was up 2.27% or 1.09 points to 49.20 in late trade. The biggest losers included The Travelers Companies Inc., which lost 1.85% or 3.43 points to trade at 181.82 in late trade. Walgreens Boots Alliance Inc. declined 1.05% or 0.46 points to end at 43.40 and McDonald’s Corporation shed 0.97% or 2.42 points to 246.83.

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NASDAQ 100

The NASDAQ index added 1.90%. The top performers on the NASDAQ Composite were Gbs which rose 67.95% to 1.31, Aterian Inc. which was up 46.78% to settle at 3.42 and IO Biotech Inc. which gained 33.16% to close at 7.55. The worst performers were Curis Inc. which was down 33.33% to 1.62 in late trade, GWG Holdings Inc. which lost 20.97% to settle at 4.22 and Snow Lake Resources Ltd which was down 19.32% to 8.10 at the close.

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Oil price - Crude Oil market, Brent Oil market

Oil prices jumped over 3%, with investors worried about tighter supply as mounting civilian deaths in Ukraine increased pressure on European countries to impose sanctions on Russia's energy sector. U.S West Texas Intermediate crude rose $4.01, or 4%, to settle at $103.28 a barrel. 

Trading was volatile with both contracts rising after being down more than $1. German Chancellor Olaf Scholz said Russian President Vladimir Putin and his supporters would "feel the consequences" of events in Bucha, outside the capital Kyiv, where a mass grave and tied bodies shot at close range were found. Western allies would agree on further sanctions against Moscow in the coming days, he said, though the timing and reach of the new package were not clear. 

France's President suggested sanctions on oil and coal, adding there were very "clear clues pointing to war crimes" by Russian forces. Since Russia's Feb. 24 invasion of Ukraine, sanctions and buyers' avoidance of Russian oil has already dented output and raised fears of tighter supplies.

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Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices eased today as the dollar held firm on rising prospects of further sanctions against Russia and possibly more aggressive interest rate hikes by the U.S. Federal Reserve to rein in inflationary pressures. Spot gold was down 0.2% at $1,929.31 per ounce. U.S gold futures were up 0.1% at $1,935.50. 

The more liquid something is, the less the volatility. And, if markets are running away from risk, the dollar then becomes a natural haven. Now in real terms, those yields are still negative once we discount break evens. And I think that’s why gold hasn’t fallen more significantly, but if this sort of repricing for a more hawkish Fed continues and we do get positive real rates, I think gold is going to look quite unattractive. 

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The dollar index was steady after three straight sessions of gains as talks of further sanctions against Moscow increased. A stronger dollar makes gold less attractive for other currency holders. U.S. two-year Treasury yields climbed to their highest level since early-2019 and 10-year yields ticked higher on Monday. Higher yields increase the opportunity cost of holding non-paying bullion. During these uncertain times, gold remains supported as a critical portfolio hedge that will shine during the most challenging juncture when inflationary pressures remain strong but growth slows.

Spot silver rose 0.6% to $24.64 per ounce, platinum fell 0.6% to $980.36 and palladium climbed 1.2% to $2,301.05.

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Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

U.S. wheat, soybean, and corn climbed in yesterday’s trading session, underpinned by disrupted supplies of Black Sea grains as the conflict in Ukraine continues, while attention shifts to U.S production. Ukrainian grain exports in March were four times less than February levels due to the Russian invasion, Ukraine’s economy ministry said, while exporters look for ways to ship grain by rail as seaports remain blocked by Russian forces. 

U.S private exporters reported the sale of 1.084 million tonnes of corn to China — 676,000 tonnes for delivery in the 2021-22 marketing year and 408,000 tonnes for delivery in 2022-23, the U.S Department of Agriculture said. Additionally, 1.53 million tonnes of corn were inspected for export the week ended March 31, near the high end of analyst expectations.

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Geopolitical developments have darkened clouds over the global economy

•  The dollar gained in yesterday’s trading session, rising for three straight sessions
• Civilian killings in Ukraine and the prospect of increased sanctions pushed investors to seek safety
• The dollar is bouncing higher as geopolitical developments have darkened clouds
• Data on Friday showed U.S unemployment hit a two-year low of 3.6% last month

Forex market

The dollar gained yesterday, rising for three straight sessions, as civilian killings in north Ukraine and the prospect of increased sanctions pushed investors to seek safety in the greenback. The U.S. currency also continued to benefit from a strong non-farm payrolls report for March that backed expectations for a hefty half a percentage point tightening by the Federal Reserve at next month's meeting. 

The dollar is bouncing higher as geopolitical developments have darkened clouds over the global economy. The buck was already enjoying jobs-inspired gains after solid hiring and lower unemployment cemented expectations of super-sized U.S. rate hikes this year. French President Emmanuel Macron called for new sanctions and said there were clear indications

Economic Calendar

Russian forces had committed war crimes in the town of Bucha. The Kremlin denied any accusations related to the murder of civilians in the town. German Defence Minister Christine Lambrecht said the European Union should discuss ending Russian gas imports. Russia supplies some 40% of Europe's gas needs. 

In late morning trading, the dollar, which measures the greenback against a basket of peers rose 0.3% to 98.89. Data on Friday showed U.S. unemployment hit a two-year low of 3.6% last month, leading investors to assess if the numbers would strengthen the Fed's resolve to tackle inflation by lifting rates sharply. 

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The euro, which has been under pressure due to worries about the economic damage from the war in Ukraine, fell 0.6% to 0.4% versus the dollar to $1.0988. Against sterling, the euro fell to a six-day low and it was last down 0.6% at 83.73 pence. More sanctions of course also mean that the risk of energy disruptions in Europe rises, because of our own sanctions or because Russia might get completely serious with its counter-sanctions rather than just changing the payment mode for natural gas. 

In my view, the risk of significant euro weakness increases. Fed funds futures on Friday have priced an 80% chance of a 50 basis point hike next month.

Euro-EUR

The single currency fell as investor morale in the eurozone fell to its lowest level in nearly two years in April, a survey showed yesterday, pointing to the beginning of a recession in the second quarter of 2022. Sentix's index for the eurozone fell to -18.0 in April from -7.0 the previous month, hitting its lowest level since July 2020. Overall, the EUR/USD traded with a low of 1.0979 and a high of 1.1036 before closing the day around 1.0981 in the New York session.

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Japanese Yen-JPY

The Japanese Yen steadied as the dollar gained yesterday, rising for three straight sessions, as civilian killings in north Ukraine and the prospect of increased sanctions pushed investors to seek safety in the greenback. The U.S. currency also continued to benefit from a strong non-farm payrolls report for March. Overall, the USD/JPY traded with a low of 121.16 and a high of 122.41 before closing the day around 122.13 in the U.S session.

British Pound-GBP

The British Pound gained versus the euro yesterday as traders continue to bet on a rapid pace of interest rate rises from the Bank of England. Despite much focus on the heaviest cost of living raise since British records began (the 1950s), the market still prices the BoE Bank Rate at 2.20% at the December meeting later this year. Overall, the GBP/USD traded with a low of 1.3157 and a high of 1.3223 before closing the day at 1.3183 in the New York session.

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Canadian Dollar-CAD

The Canadian Dollar traded lower as a record number of Canadian businesses are facing capacity pressures amid intense labor shortages and ongoing supply chain difficulties, with many expecting significant wage and input price growth, a regular Bank of Canada survey said yesterday. The central bank's Business Outlook Survey Indicator dipped in the first quarter. Overall, USD/CAD traded with a low of 1.2462 and a high of 1.2550 before closing the day at 1.2473 in the New York session.

Australian Dollar-AUD

The Australian Dollar struggled at these levels for the past two weeks but has tentatively broken higher. China reported a record number of covid cases but that might be outweighed by the restart of idled Evergrande construction projects. The broader signal there is that Beijing is pulling on growth levers that will demand more commodity exports from Australia. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

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Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has lost 0.30%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has lost 0.19%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has lost 0.11%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has lost 0.12%.

Sterling-Swiss GBP/CH

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.02%.

Elliott wave forex trading idea for AUD/USD and USD/JPY acceleration

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Euro zone inflation surged to 7.5% in March, hitting another record high

• The nonfarm payrolls report showed that 431,000 jobs were added last month
• The unemployment rate dropped to 3.6%, the lowest since February 2020
• Eurozone manufacturing growth slowed sharply last month data showed on Friday

Forex market

The dollar rose on Friday, helped by robust U.S. job growth numbers for March that firmed market expectations that the Federal Reserve will increase the pace of interest rate hikes in an effort to blunt rising inflation. 

The nonfarm payrolls report showed that 431,000 jobs were added last month, versus estimates of 490,000, while data for February job increases were revised higher. The unemployment rate dropped to 3.6%, the lowest since February 2020. Another strong print is sustaining expectations for two or more jumbo-sized Fed hikes in the coming months and has added to the momentum driving the dollar higher. 

Economic Calendar

Futures contracts tied to the Fed's policy rate fell after the jobs report, pointing to expectations that the Fed will hike by a half-a-percentage point at each of its next three meetings to deal a more decisive blow to price pressures. That would follow a quarter-point hike on March 16, when the Fed embarked on a new tightening cycle. 

The dollar index, gauges the greenback against six counterparts, including the euro. For the week, the dollar was nearly flat, having rebounded from a midweek decline as hopes over Russia-Ukraine peace talks faded, boosting safe-haven demand for the American currency. Global risk sentiment continues to deteriorate and lift the greenback as hopes for a ceasefire in Ukraine fade. 

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The euro failed to find any support from surging eurozone inflation, which climbed to 7.5% in March, hitting another record high and raising pressure on the European Central Bank (ECB) to rein in runaway prices even as growth slows sharply. We still think that as much as inflation is set to intensify further in the Eurozone, the ECB is likely to wait it out this quarter to see how the bloc evolves with the shock emanating from the war in Ukraine, though we think the ECB is on borrowed time and will need to hike this year. 

The euro was 0.24% lower versus the greenback at $1.10395. The single currency retreated sharply on Thursday after hitting a one-month high earlier in the session, as hopes for a ceasefire in Russia's invasion of Ukraine faded. Peace talks were ongoing on Friday. Another commodity-linked currency, the Australian dollar, rose 0.15% to $0.74965. The Russian rouble has recovered to levels last reached in the days before Russia launched its invasion in February.

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Euro-EUR

The single currency traded lower despite Eurozone inflation surged to 7.5% in March, hitting another record high with months still left before it is set to peak, raising pressure on the European Central Bank to rein in runaway prices even as growth slows sharply. Consumer price growth in the 19 countries sharing the euro accelerated from 5.9% in February. Overall, the EUR/USD traded with a low of 1.0979 and a high of 1.1036 before closing the day around 1.0981 in the New York session.

Japanese Yen-JPY

The Japanese Yen fell as The dollar rose on Friday, helped by robust U.S job growth numbers for March that firmed market expectations that the Federal Reserve will increase the pace of interest rate hikes in an effort to blunt rising inflation. The nonfarm payrolls report showed that 431,000 jobs were added last month. Overall, the USD/JPY traded with a low of 121.16 and a high of 122.41 before closing the day around 122.13 in the U.S session.

British Pound-GBP

The British Pound edged lower against the U.S dollar on Friday and was on track for a weekly loss of around 0.5%, as optimism surrounding peace talks in Ukraine faded, while UK manufacturing growth hit a 13-month low. The S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 55.2 in March. Overall, the GBP/USD traded with a low of 1.3157 and a high of 1.3223 before closing the day at 1.3183 in the New York session.

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Canadian Dollar-CAD

The Canadian Dollar edged lower against its U.S counterpart on Friday, extending a modest weekly decline, as oil prices fell and the gap between U.S. and Canadian bond yields moved in favor of the U.S bonds. For the week, the currency weakened 0.3%, after touching on Wednesday its strongest intraday level in nearly five months. Overall, USD/CAD traded with a low of 1.2462 and a high of 1.2550 before closing the day at 1.2473 in the New York session.

Australian Dollar-AUD

The Australian Dollar has been bumping up against resistance levels as the underlying fundamentals of the Australian economy remain strong. The backdrop of elevated commodity prices and a relatively healthy economic national balance sheet is underpinning the currency. By historical standards, the Aussie is below the long-term average since the float in 1983, while the terms of trade remain at multi-generational highs. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Forex VPS

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has lost 0.30%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has lost 0.19%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has lost 0.11%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has lost 0.12%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.02%.

Trading Signals and Trading Forecasts

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Live Market Update on Indices and Bitcoin in Focus

Join Simon Massey, a lead trader at Trade Room Plus, as he takes over the Trade Zone mantle for April. Register for this exclusive and free 30-minute webinar to help plan your next trade in real-time, as Simon looks ahead at the potential trading opportunities taking place as the weekend approaches. 

In this webinar, you'll learn:

• The potential trading opportunities currently in play in the indices, forex, crypto, and commodities markets 
• The key trade levels to set your trade entry and exit points 
• Gain an understanding of Simon's own trading approach and the every day trading strategies he uses
• Find out how the week's events may affect the markets before Friday's market close

Join the First Live Market Update of April, this Wednesday!

Watch the video below to get Simon’s latest insights