24 Mar 2015
What's next? Turnaround Tuesday; EURUSD tested 1.1000 before losing 100 pips
FXStreet (Tokyo) - The US Dollar recovered on Tuesday some of the losses performed in the previous days. In a classic turnaround day, the EUR/USD rallied to price above 1.1000 before falling 100 pips to 1.0990. First negative day in the last three sessions.
The Dollar index is closing 0.17% positive on the day at 97.12; The GBP/USD posted declines on Tuesday as the pair fell to 1.4845; however it remains inside its previous day's range. The USD/JPY closed negative for the third day; but losses was minimal after the pair bounce off 119.20 before closing at 119.68.
Economic data supporting growth hopes
The US dollar traded lower in the European session as economic data fueled risk on trading. European flash PMI data posted better than expected readings in March. The data fueled Euro and expectations that the growth in the Eurozone will be better than previously anticipated. However, experts consider this rally to be short-lived as the EUR/USD will keep its bearish trend as "stronger data does not change the course for asset purchases.
Major headlines in the day:
- German private sector activity rises to eight month high
- Eurozone Composite PMI rises to near four-year highs
- UK February CPI unchanged at annualized rate of 0.0%
- US CPI announced 0.0% year-on-year in February, Core inflation ticks up
- US February New Home sales rose 7.8%
What's next on Wednesday:
Talking about market sentiment Gonçalo Moreira from FXStreet explained current situation very well in his Trader's eye: "The recent USD correction has been a realization from investors that the FOMC were never in a hurry to raise interest rates. The next shock may come when they realize the Fed will likely continue its accommodative monetary policies through most of 2015, and quite possibly into 2016."
Said that, the next big announcement will be the US GDP on Friday so you can expect low volatility on Wednesday and Thursday. However, market proved that they wanted the volatility in the EUR/USD, no matter they don't know the direction the pair will take.
As for the short-term, pay attention to New Zealand's trade balance and Australia's Financial Stability Review. In Europe, watch IFO report and the Durable goods orders in the United States.
The Dollar index is closing 0.17% positive on the day at 97.12; The GBP/USD posted declines on Tuesday as the pair fell to 1.4845; however it remains inside its previous day's range. The USD/JPY closed negative for the third day; but losses was minimal after the pair bounce off 119.20 before closing at 119.68.
Economic data supporting growth hopes
The US dollar traded lower in the European session as economic data fueled risk on trading. European flash PMI data posted better than expected readings in March. The data fueled Euro and expectations that the growth in the Eurozone will be better than previously anticipated. However, experts consider this rally to be short-lived as the EUR/USD will keep its bearish trend as "stronger data does not change the course for asset purchases.
Major headlines in the day:
- German private sector activity rises to eight month high
- Eurozone Composite PMI rises to near four-year highs
- UK February CPI unchanged at annualized rate of 0.0%
- US CPI announced 0.0% year-on-year in February, Core inflation ticks up
- US February New Home sales rose 7.8%
What's next on Wednesday:
Talking about market sentiment Gonçalo Moreira from FXStreet explained current situation very well in his Trader's eye: "The recent USD correction has been a realization from investors that the FOMC were never in a hurry to raise interest rates. The next shock may come when they realize the Fed will likely continue its accommodative monetary policies through most of 2015, and quite possibly into 2016."
Said that, the next big announcement will be the US GDP on Friday so you can expect low volatility on Wednesday and Thursday. However, market proved that they wanted the volatility in the EUR/USD, no matter they don't know the direction the pair will take.
As for the short-term, pay attention to New Zealand's trade balance and Australia's Financial Stability Review. In Europe, watch IFO report and the Durable goods orders in the United States.