The European central bank held benchmark rate steady at 1.00%, hinting any talk of exit strategy is premature as the economic outlook remains exposed to downside risks and shall be affected by the severe austerity measures taken across the continent, while inflation outlook continues to be broadly balanced. Thus the bank continues to adopt the wait and see approach.
Prior to that; the ADP non-farm employment change showed the U.S. economy added 209,000 new jobs, slightly lower than the revised up 230,000 reading of February, however above market expectations of 206,000. On the other hand, service sector activities declined more than expected in March to 56.00 from 57.3 in February and below market expectations of 56.9.
The USDIX extended its earlier gains printing a high at 79.90 just below recent swing high and resistance level at 79.95. The index had broken a reversal falling wedge pattern and the 50-days SMA recently, which is a very positive sign in the near term, however price has gone extensively overbought while near 79.95 thus we may see a pullback before resuming the rally, and taking 79.95 could open the door towards the recent high at 80.73, while 79.35 should limit any extension to the downside.
The EUR/USD pair took a harsh hit; after opening the session at 1.3231 the pair fell to print a low at 1.3105 before rebounding slightly; at the moment price retreated to trade above the key horizontal support at 1.31200 which is also around the main ascending trend line of the whole short term bullish trend that started from 1.2625 lows. Now we anticipate some fluctuations and maybe an upside correction however the bearish bias should remain intact, and taking 1.3120 with few hours of trading could extend the bearish leg towards the bottom of the range around 1.3000.
The GBP/USD has broken the ascending wedge, currently found support around 1.5840; while stochastic has dipped within oversold territory. In general, the overall ranging market among the key 1.5600 support and 1.6000 resistance remains intact; thus only a sustained breach above or below this range shall hint the next directional move within the upcoming period.
The USD/JPY has been trading narrowly within the recent hours; price has been fluctuating among the range between 83.20-81.75 for a while; thus if we see a breach above 83.20 we will anticipate a retest of 84.00 mark, on the other hand below 81.75, 80.60 is the obvious target and support level.