The U.S. dollar managed to post some modest gains on the day amid most of the economic data focusing on the manufacturing PMI’s. Data showed that the Eurozone final manufacturing PMI was steady at 56.6, matching estimates and unchanged from the previous month.
In the UK, manufacturing PMI rose to 55.1 which was slightly higher than the estimates and up from the previous month’s print of 55.0.
FOMC member, Brainard spoke late yesterday where she warned on the risks of an acceleration in inflation. She said that the government’s fiscal stimulus which comes at a time when the U.S. was heading to full employment could push consumer prices higher. The USD was broadly unchanged on her comments.
Looking ahead, the economic calendar today will see the release of the monthly private payrolls data from ADP/Moody’s analytics. Economists forecast that private sector jobs rose 208k during the month of March, slightly lower than the 235k jobs created the month before.
In the Eurozone, the flash inflation estimates for March is expected to show that consumer prices surged 1.4% on the year up from 1.1% previously. Core CPI is expected to rise 1.1%, slightly up from 1.0% previously.
The weekly crude oil inventories report will be coming out today with estimates showing another week of inventory buildup of 1.4 million barrels per day.
EURUSD Intra-Day Analysis
EUR/USD 4 Hour Chart
EURUSD (1.2282):The common currency was seen extending the declines yesterday marking a five day decline as prices fell to intraday lows of 1.2253. Initial resistance in the short term is seen at 1.2300 which could be tested. A reversal off this level could keep the EURUSD biased to the downside. However, in the event that the common currency manages to close above 1.2300, further gains could push the EURUSD towards the 1.2385 handle which marks a retest of a major resistance level. To the downside, the lower end of the range near 1.2243 is likely to hold the declines in the near term.
GBPUSD Intra-Day Analysis
GBP/USD 4 Hour Chart
GBPUSD (1.4091):The British pound managed to post strong gains as price action briefly consolidated around the 1.4044 level before pushing higher. As noted in yesterday’s commentary, we expect the upside to see GBPUSD rising toward 1.4115 where resistance is most likely to be established. With the UK’s construction PMI on the tap, a positive beat on the estimates could see the GBPUSD extend the gains as much as 1.4162 where the major resistance level could be tested.
XAUUSD Intra-Day Analysis
XAU/USD 4 Hour Chart
XAUUSD (1334.64):Gold prices gave up the gains rather quickly after rising to the 1345 handle. Price action fell past the 1336 support before reversing the losses just a few points above the 1328 level of support. The sideways range could continue within the 1336 handle and the 1328 level. A breakout from this range could signal further declines. We expect gold prices to push lower following a reversal at the 1336 region. This could send gold prices lower to 1328 with a breakdown below this level likely to see gold prices falling back to the 1307 level of support.