Although retails sales figure came slightly better than market estimates; the fact is retailing activities have slowed in March, while a big drop in manufacturing activities was seen in the empire state which could be an indication for other regions within the country. Even with the mixed data from the United States that might be dollar negative over the uncertainty for the economic outlook; however, due to market volatility and the uncertainly over Spain and global growth we may see the dollar regaining grounds on risk aversion earlier than expected.
The EUR/USD pair has rebounded from the key juncture we mentioned numerously around 1.3000, currently trading above 1.3050. Stochastic has completed a bullish crossover within oversold areas, thus we may see an extension of the current correction, however we prefer avoiding any rallies and looking to short any potential pullback towards 1.3100-1.3125 level. In general, 1.3000 is very critical in terms of determining the next direction for the pair, a sustained break below it shall resume the overall bearish trend towards 1.2650.
The GBP/USD is trading below the 50-days SMA and above the key ascending channel for a potential rising wedge bearish reversal pattern. If we witness a break below 1.5800 with few hours of trading that could open the door towards further selloff eying 1.5600 areas one more time. Settling back above the 50-days SMA at 1.5850-1.5855 could push the pair higher again towards 1.5900.
The USD/JPY is testing the 80.50 for the second time, meanwhile a possible bullish divergence is seen on Stochastic indicator, thus a push below 80.50 could lead to 80.00 major level, where we expect the pair to rebound towards 81.80 again.