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A combination of factors dragged EUR/USD lower for the second straight day on Friday. A positive risk tone capped the safe-haven USD and extended some support to the pair. The Russia-Ukraine crisis should continue as a headwind for the shared currency. The EUR/USD pair added to the previous day's heavy losses and edged lower for the second successive day on Friday amid fading hopes of diplomacy in Ukraine. Investors remain worried that the European economy, which relies heavily on Russia to meet its energy needs, will suffer the most from the spillover effect of the Ukraine crisis. This, in turn, acted as a headwind for the shared currency, which, along with modest US dollar strength, exerted some downward pressure on the major. Bulls seemed rather unimpressed by hotter-than-anticipated Eurozone consumer inflation figures. According to the flash estimate, the Harmonised Index of Consumer Prices (HICP) accelerated sharply to 7.5% YoY in March. This was well above consensus estimates, pointing to a rise to 6.6% from the previous month's upwardly revised reading of 5.9%. However, the Core HICP missed market expectations and rose 3% during the reported month from 2.7% in February. From the US, the monthly jobs data showed that the… Read More »EUR/USD Forecast: Seems vulnerable to challenge 23.6% Fibo. support, around 1.0970 area

Non-farm payrolls marginally below expectations Non-farm payrolls marginally fell below market expectations on Friday, as February’s number was upwardly revised. Figures from the Labor Department reported that 431,000 jobs were added to the U.S. economy in March, which is slightly below estimates of 490,000 . This comes as February’s final payroll number was also updated, and now shows an addition of 750,000, versus 698,000 as initially stated. Overall, the report was positive for the U.S. economy, and markets in general, which has been nervy, following the fall out of the Russia/Ukraine war.  As of writing, the S&P 500 was trading 0.26% lower. DAX 30 up, despite Eurozone inflation hitting highs Germany’s DAX 30 was marginally higher on Friday, despite news that inflation in the Euro area had risen to historical highs.  The data showed that the consumer price index in the eurozone rose to 7.5% from the same point last year. This came as it climbed by 2.5% last month, as a result of the Russia/Ukraine war, which sent energy prices to multi-year highs. News of this was followed by the IHS Markit PMI survey, which came in at 56.5, which is its lowest level in over a year. The… Read More »NFP marginally below expectations, DAX 30 up despite Eurozone inflation hitting highs [Video]

EUR/USD, “Euro vs US Dollar” EUR/USD is still forming the descending structure towards 1.1053. After that, the instrument may start another correction to reach 1.1092 and then resume trading downwards with the target at 1.1015. GBP/USD, “Great Britain Pound vs US Dollar” After completing the correctional wave at 1.3174, GBPUSD is forming a new descending structure towards 1.3080. Later, the market may correct to reach 1.3100 and then resume trading downwards with the target at 1.2993. USD/JPY, “US Dollar vs Japanese Yen” USD/JPY has finished the correctional structure at 122.60. Possibly, today the pair may start another decline with the short-term target at 120.80. USD/CHF, “US Dollar vs Swiss Franc” USD/CHF is consolidating around 0.9227. Today, the pair may form one more ascending wave towards 0.9262. Later, the market may start a new decline to reach 0.9180 and then resume growing with the target at 0.9277. AUD/USD, “Australian Dollar vs US Dollar” AUD/USD is still consolidating around 0.7495. Possibly, the pair may fall to break 0.7450 and then continue trading downwards with the target at 0.7400. Brent Having completed the ascending impulse at 114.44, Brent is correcting down to 105.00. After that, the instrument may start another growth to break… Read More »Forex technical analysis and forecast: Majors, equities and commodities

EUR/USD, H4 The peace talks between Russia and Ukraine in Istanbul appear to have been just a delay tactic in order for Russia to adjust its military position. As expected by many parties, the retreat from the area near the capital Kiev turned into an increase in troops in the Ukrainian naval sector. In addition to this, Russia continues to emphasize a desire for oil and gas buyers to pay in rubles and as a result, the ruble is now strengthening to pre-war levels again. The US stock market and closed for the second consecutive day over -1.55%. Such concerns caused the euro to weaken again yesterday against other major currencies, especially safe-haven currencies. EURJPY dropped to a low of 134.50 before bouncing back to 135.20 now. EURCHF made a fresh weekly low of 1.0206, now at 1.0230, while the EURUSD pair has fallen to 1.1050 from the three-week high zone at 1.1180. Meanwhile the US Dollar was back in demand as a safe-haven currency with a boost from yesterday’s US economic data. Key inflation figure, the PCE, climbed to a four-decade high of 6.4 percent annually, as did the Chicago PMI, which rose higher than expected at 62.9, compared… Read More »EUR/USD: Stuck between 1.1000 and 1.1100 before Nonfarm Payrolls

The Canadian dollar has posted small gains, trading just below the symbolic 1.25 line in the European session. We could see stronger movement from the currency when US nonfarm payrolls are released later today. The month of March has brought plenty of turbulence to the financial markets, highlighted by the Ukraine-Russia war, which shows no signs of ending anytime soon. The war has caused a massive humanitarian crisis and ruptured relations between Moscow and the West, and clearly, such a grim landscape has taken its toll on investor risk appetite. The Canadian dollar is sensitive to risk, but gained ground in March, as USD/CAD fell by 1.28%. The currency has managed to remain in demand despite heightened risk apprehension, thanks to the Canadian economy, which is a major exporter of oil and other commodities. The ongoing surge in commodity prices has boosted the Canadian economy as well as the Canadian dollar, which earlier this week hit its highest level since November 2021. Canada’s economy rose by a modest 0.2% in January. GDP has now expanded for the eighth month in a row, but the recovery has been hampered by the Covid pandemic. Some parts of the country are experiencing a… Read More »CAD in holding pattern ahead of NFP

Yields on Eurozone government bonds continued to rise this week. This continued a sell-off that began at the beginning of March, triggered by the war in Ukraine. Immediately after the outbreak of war, safe government bonds were still in demand. This turned around relatively quickly, however, as the market shifted its focus to the additional inflationary pressures as a result of the war. Rising commodity prices are the most obvious economic impact of the war, but this could be compounded by additional price pressures from supply shortages, such as the COVID-19 pandemic triggering a shortage of semiconductors, which in turn led to rising vehicle prices. The war will thus both directly increase inflation rates and increase future risks. At the same time, these factors also pose significant risks to the economy. The sharp rise in energy prices is putting a strain on household purchasing power. The economic viability of companies with high energy consumption has been called into question. Supply shortages could lead to production cutbacks or stops. The demand for certain goods and services that have a high share of raw materials could suffer. So, the risks of economic damage are also considerable. We see two reasons why the… Read More »What triggered sell-off on bond market?

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As traders reacted to today's US labor market data, the greenback traded broadly higher on Friday. At the time of writing, the EURUSD pair was seen at around 1.1050. According to a recent report, the US economy added 431,000 jobs in March, below the 490,000 expected. However, the February number was revised upward to 750,000 from 678,000. At the same time, the unemployment rate improved to 3.6%, down from 3.8% previously. Finally, the yearly wage growth improved to 5.6% (against 5.5% expected), while the monthly change met estimates at 0.4%. After the data, the CME Group FedWatch Tool showed a 72.5% probability of a 50 bps hike in May, compared to 71% earlier in the day. The support is seen at the 1.10 level, and if not held, the pair might decline toward 1.0950. Alternatively, the resistance remains at the key 1.12 level. If the euro jumps above it, the medium-term outlook could change to bullish.

Summary Although slower than in recent months, the 431K increase in employment in March gives a clearer picture of what remains a solid trend in hiring. The strong pace of hiring is being supported by rising labor force participation but is still plenty strong enough to keep the labor market tightening. The unemployment rate fell to a fresh cycle low of 3.6%, while average hourly earnings growth picked up to 0.4%. While the jobs market is not the Fed'snumber one priority at present, today's solid report supports the prospect of a 50 bp increase in the fed funds rate at the FOMC's May meeting. And the beat goes on The slowdown in hiring in March leaves nothing to be concerned about on the labor front. Instead, the431K increase in payrolls offers a cleaner read on the trend in hiring after the past few months' reports have been affected by unusual seasonal dynamics and the Omicron COVID wave. Hiring continues along at a robust pace that is still more than twice the average of the past expansion. If the March pace were to be sustained, payrolls would be back to their pre-COVID levels in July of this year. Further improvement on the… Read More »Employment marches on

Equity markets are nudging higher at the end of the week after suffering losses a day earlier, as the consolidation phase continues. This continues to be a very headline-driven market and they're coming thick and fast. Talks between Ukraine and Russia are progressing well, it seems, but things can change rapidly, for better or worse. Until we see a deal, the situation will continue to feel precariously balanced and investors will remain on edge as a result. Claims of a Ukrainian attack on a fuel depot in Belgorod, where further explosions have recently been reported, may ignite further tensions if proven to be accurate. Not that Russia itself has lowered the intensity of its attacks in Ukraine since the negotiations began, of course. Naturally, the Kremlin won't let hypocrisy stand in the way if it wants to escalate the crisis once more. Interestingly, Ukraine is yet to confirm responsibility for the attacks. Eurozone inflation piles further pressure on ECB Inflation in the eurozone hit another all-time high in March, jumping to 7.5% from 5.9% in February. Energy prices are strongly behind the move which isn't going to change any time soon, although price pressures are becoming a little more widespread.… Read More »Cautiously higher after strong jobs report