Vlad Demochko
Today, on April 8th, the US Dollar is down against the common European currency and the British Pound by 0,13% and 0,19% respectively. At the same time, NZDUSD and AUDUSD are down by 0,55% while the Canadian Dollar and the Swiss Franc have gained 0,18% and 0,15% against the American currency respectively.
It appears that the US Dollar is seeing an overall decline against other majors. The currency market is probably waiting for new guidelines after the Fed's meeting minutes published earlier this month.
Moreover, March's Nonfarm Payrolls figures published last week almost matched the market expectation (192 000 against expected 200 000). Even though the figures turned out to be slightly lower than expected, they still confirm the fact that the US economy keeps growing. Alas, these figures disappointed some traders and investors, which ultimately resulted in higher pressure on the US Dollar. This projected to the current overall weakness of the American currency, especially as commodity currencies are gaining some value backed by firm economic growth. So, at this point, the market is looking forward to seeing the Fed's further guidelines and goals.
This week, traders and investors will witness several key US economic reports. One of them is the report on February's vacancies, which is scheduled for April 8th. Despite lagging behind the key employment report, this one gives more details on the matter.
Even Janet Yellen mentioned this report as an indicator tracking the state of affairs in the US labor market. Therefore, this indicator is vital for those who try to anticipate the Fed's policies. Tomorrow, on April 9th, the Fed's meeting minutes will be released. April 10th will give us last week's initial jobless claims data. These data are rather volatile and are expected to decline this time. The USA's financial authorities are also going to publish the US government's income-and-spending figures. Some experts expect the deficit to shrink by 50% down to $50bn.
Meanwhile, Masterforex-V Academy tried to estimate the near-term prospects of the American currency by analyzing the H4 chart of the USD index and combining technical and fundamental data to see the overall picture.
The chart shows that the US Dollar is currently trading within the scope of a long-term downtrend against a basket of 6 other majors. The bearish tendency started from the 81,53 high set on January 21st 2014.
The bearish wave count is represented by the red arrow. After the US Dollar found the bottom at 79,27 on March 13th, a mid-term recovery started. Therefore, the American currency managed to regain some of its ground. The decline resumed after Friday's Nonfarm Payrolls figures.
As of today, April 8th, the US Dollar keeps losing its value and has already broken below the bottom of the MF sloping channel (the green line on the chart).
This signal indicates that the crowd has turned negative towards the US Dollar, Masterforex-V Academy reports. After the price reached the previous targets at 80,57 and 80,69, the Dollar continued the tendency within the scope of a bigger-scale downtrend. The targets are marked with green dashed lines.
If the downward tendency continues, we may well witness a dive right down to the 79,90 support. If the price pins through this level and manages to consolidate below it, we are likely to see the price retracing further down to the second MF pivot. Once the price overcomes this stronghold, the long-term downtrend will resume.
Alternatively, if the US Dollar goes on rallying against other majors amid further economic growth, the price may encounter resistance around the top of the MF sloping channel. Once it is overcome, the next targets will be located at 80,77 and 80,92.
Vlad Demochko
