Dollar Fell after Weak Data
The dollar fell against the euro and sterling after a run of weaker than expected economic data, suggesting a slowdown in the economy and boosting expectations for a Fed rate cut in the third quarter.
ISM non-manufacturing index fell from 54.3 to 52.4 in March, below the forecast of 55. The factory orders rose 1.0% in February, compared with the estimate of a 1.8% increase. Following the disappointing numbers, the dollar dropped from around 1.3350 to 1.3380 against the euro, and was down 40 pips to 1.9772 versus the sterling.
The dollar pared par of its loss as the crude oil fell to 64 per barrel following Iranian President??™s statement. He said today that the 15 British sailors and Marines seized thirteen days ago will be freed.
The overall sentiment of the dollar is biased to the downside, however the market will keep cautious before the US Labor Department release March employment report this Friday.
The Bank of England will announce its interest rate decision tomorrow morning. It is expected to hold the rates steady at 5.25% this time and is more likely to raise rates in May.
EURUSD will face interim resistance at 1.3380, followed by 1.34 and 1.3420. Additional ceilings will emerge at 1.3450, backed by 1.3480. Support starts at 1.3350, backed by 1.3330, 1.33 and 1.3270. Subsequent floors are eyed at 1.3250.
GBPUSD encounters interim resistance at 1.9770, backed by 1.98, and 1.9830. Subsequent ceilings will emerge at 1.9850, followed by 1.9880 and 1.99. On the downside, support begins at 1.9720, followed by 1.97 and 1.9650. Additional floors are eyed at 1.9620, backed by 1.96 and 1.9580.
USDJPY encounters interim resistance at 119, backed by 119.30 and 119.50. Subsequent ceilings will emerge at 119.80, followed by 120 and 120.50. On the downside, support begins at 118.50 and 118.30, followed by 118. Additional floors are eyed at 117.80, backed by 117.50 and 117.30.