Trading plan for 31/03/2017:
The end of March is the end of fiscal year in Japan. USD/JPY fights back above 112.00 and wide index of TOPIX erased all this year's gains. EUR/USD remains below 1.0007. The market is in low volatility mode, most G-10 currency does not change the value to the Dollar. Positive PMI data from China were without much influence on sentiment. Crude Oil is in the phase of correction of significant gains from previous days. The stronger Dollar and the stabilization of the US debt market have brought Gold prices to around $1,240 an ounce.
On 31st of March the event calendar is full of important events and the market participants will pay attention to the UK Final GDP and Current Account for 4th quarter data, Eurozone Consumer Price Index data, and Canadian Gross Domestic Product, Personal Spending, Personal Income, and Chicago Purchasing Manager Index data from the US.
GBP/USD analysis for 31/03/2017:
The UK Final Gross Domestic Product data was worse than anticipated. On the quarter-to-quarter basis the GCP was in line with expectations at the level of 0.7%, but on a year-to-year basis the number revealed was at the level of 1.9%, while market participants expected 2.0%. For the whole 2016 the GDP was at the level of 1.8%. In the same time, some interesting comments from the President of European Council Donald Tusk were released. He said that Brexit talks will be difficult and sometimes confrontational and EU will not pursue a punitive approach to Brexit. Moreover, he intends to visit Theresa May in London before April 29th EU summit.
Let's take a look at the GBP/USD technical picture at the H4 time frame to see any reaction for the news. The bulls tried to test the technical resistance at the level of 1.2538, but they failed and now the price is declining towards the next technical support at the level of 1.2377. The overall picture is neither bullish nor bearish, so the sideway price action is expected today for this market.
USD/CAD analysis for 31/03/2017:
The Gross Domestic Product data are scheduled for release at 12:30 pm GMT and the global investors expect a steady pace of progression on a month-to-month basis at the level of 0.3% and a decline from 2.0% to 1.8% on a year-to-year basis. If the data are better than expected, then the Canadian Dollar will appreciate in value, especially if the monthly GDP are released above 0.5%.
Let's take a look at the USD/CAD technical picture at the H4 time frame before the news is published. The market keeps trading sideways between the levels of 1.3263 - 1.3419, so it is clear the market participants are waiting for the fundamental trigger in order to break out above/below one of these levels. If the data are better than anticipated, then the technical support at the level of 1.3263 will be tested again. If the data are in line with expectations or worse, then the bulls might try to test the technical resistance at the level of 1.3419 and head towards the level of 1.3493.
EUR/USD analysis for 31/03/2017:
The Personal Income and Personal Spending data are scheduled for release at 12:30 pm GMT today. Personal Income is expected to have increased by 0.4% in February and Personal Spending by 0.2%. Personal Income and its growth rate is probably the key determinant for the economic outlook right now, because it is determined by Wage Growth (published with NFP Payrolls). The bigger wage growth, the better is personal income, and people tend to spend more, so the personal spending increases as well, which in turn means the economy is in good shape.
Let's now take a look at the EUR/USD technical picture at the H4 time frame before the news is published. The market trades in oversold conditions as the price hit the technical support at the level of 1.0678. If the news are better than expected, then there is a chance for the corrective rally towards the level of 1.0714, but if the news turns out to be worse than expected, then the next technical support is seen at the level of 1.0599.
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