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At the beginning of the week, the most traded currency pair performed pretty well, mostly due to the result of the Federal Reserve's comment regarding fewer-than-expected interest rate hikes in 2016. Nevertheless, starting on Monday, the euro begun to show marginal decline, since the US dollar bounced back. Moreover, on Tuesday, a number of explosions in Brussels mainly at the airport and on the metro system, pushed the single European currency sharply down. The next day, the Euro remained in negative territory was unable to find enough support to emerge above. In addition, the greenback strengthened against its major peers after a batch of rate-hike-supporting speeches over the course of the week, undermining a dovish Federal Reserve (Fed) chair after the Federal Open Market Committee meeting last week. At the end of the week, amid the Easter weekends the shared European currency remained in a bear market, trimming half of last week's gains. The pair is now trading in a very narrow range, bounded by strong resistance at 1.12 and recent low and daily S1 at 1.11. Community members believe the pair will be able to slip to 1.10 by this Friday, just slightly below the S2. The number of bulls and bears is almost equal, hence, the outlook is unclear, but still, the bearish votes weights. Technical indicators, in turn, do not give a clear ‘buy' or ‘sell' signal as well.
German is to release preliminary data on consumer inflation which has a potential to surprise markets to the upside. The next day, on Thursday, German is to announce data on retail sales and unemployment change, while Spain is going to report on inflation. The US is to round up the week with the closely watched nonfarm payrolls report and data from the Institute of Supply Management on manufacturing activity.
© Dukascopy Bank SA