April 5th Morning Brief – Eyes On The FOMC Meeting Minutes
Arslan Butt • 3 min read
Yesterday, things remained in our favor and helped us gain quite a good number of pips. It was not only the trading signals which performed well, but the 4th of April Morning Brief successfully predicated the trend for both the EUR/USD and AUD/USD pairs.
Previously, the U.S dollar traded slightly bullish compared to most major currencies. One of the main reasons was the upbeat economic figures from the United States, specifically, the trade deficit diminished to $43.6bn for the month of February from $48.2bn in January. This means the U.S economy has exported more than they imported and have produced more, that's why the export figures increased. This leads to better GDP, retail sales and manufacturing figures. Ultimately, investor confidences show on the 4-hour chart on the U.S economy.
Today, we don't have a good number of economic figures, but the ones we do have are really important and have the potential to give us a good number of trading opportunities.
Top Economic Events To Watch Today
- Spanish Services PMI (9:15)
- Italian Services PMI (9:45)
- French Final Services PMI (9:50)
- German Final Services PMI (9:55)
- Final Services PMI (10:00)
- Services PMI (10:30)
- MPC Member Vlieghe Speaks (14:30)
- ADP Non-Farm Employment Change (14:15)
- Final Services PMI (15:45)
- ISM Non-Manufacturing PMI (16:00)
- Crude Oil Inventories (16:30)
- FOMC Meeting Minutes (20:00)
EUR/USD – The Pair With A Major Trade Setup
Yesterday we talked about a trading range of the EUR/USD. The pair is still consolidating in the brief range of $1.0650 – $1.0699. Even, the strong fundamentals of the U.S dollar failed to give a direction to the major currency pair.
Nevertheless, at the beginning of the New York session, we are likely to see some major fluctuations in the market as we have an ADP payroll report at 14:15 GMT. This is just a warmup report that gives us clues about the well awaited economic data NFP employment change which is due to be released on Friday. I will share more insights about it later, now let's have a look at the technical side of the pair.
EURUSD – 4 Hours Chart
Technical Outlook – Intraday
The EUR/USD is still not breaking out of a narrow trading range of $1.0650 – $1.0699. Technically, in the 4-hour chart, the 50 periods EMA is bearish, along with the RSI below 50. Although, both of these are signaling a selling bias, we can't enter a sell position until the market comes out this sideways trend.
We will enjoy choppy trading such as selling at the upper level of $1.0699 and buying above the lower level of $1.0650. However, we need to place tight stops to avoid sudden breakouts.
GBP/USD – No More Bullish Channel
The Sterling had another bad day yesterday as it fell more than 70 pips to trade at $1.2425. Though, the selling trend initiated due to the optimistic economic figures from the United States. The lighter growth in the housing activity growth added more weight in the U.K construction sector.
Moreover, the Article 50 is still on the table and investors are constantly looking for more updates to decide future trends about the pound. Aside from the fundamentals. I am seeing something interesting on the technical side. Let's jump towards the technical side.
GBPUSD – 4 Hour Chart
Technical Outlook- Intraday
Fellows, while examining the 4-hour chart, I realized that the GBP/USD has broken lower from a bullish channel in the previous week and has now formed a bearish flag pattern, which demonstrates an extension of the bearish trend. In addition to this, the 50 periods EMA is extending a strong resistance at $1.2486. We can see the pair resting above $1.2380 today.
Trading Signal: Traders, let's stay on trend and wait for a sell enter at $1.2460 with a take profit at $1.2425 and a stop loss above $1.2480.
We may encounter thin volatility in the Asian and European sessions, but the New York session may come with some volatility. It's highly recommended to follow the ADP Non-farm and FOMC meeting minutes later today as they may offer us some good trades.