On Tuesday the 2nd of April, the pound was the centre of attention among traders against the backdrop of Brexit news. While trading on our main pair closed slightly down, the euro recovered to 1.1229 in this morning’s Asian session.
Once again, the rise of the majors against the greenback was driven by British Prime Minister Theresa May’s statement that she is ready to seek an alternative approach to Brexit with the leader of the Labour Party, Jeremy Corbyn. She is looking to find a compromise on this issue that all parties can agree on.
Day’s news (GMT+3):
10:15 Spain: Markit services PMI (Mar).
10:45 Italy: Markit services PMI (Mar).
10:50 France: Markit services PMI (Mar).
10:55 Germany: Markit services PMI (Mar).
11:00 Eurozone: Markit services PMI (Mar).
11:30 UK: Markit services PMI (Mar).
12:00 Eurozone: retail sales (Feb).
15:15 US: ADP employment change (Mar).
16:45 US: Markit services PMI (Mar).
17:00 US: ISM non-manufacturing PMI (Mar).
17:30 US: EIA crude oil stocks change (29 Mar).
In today’s Asian session, the US dollar is trading down against all the majors except for the yen. The bulls broke through the trend lines on our main pair this morning. On the chart, I’ve got one that runs through the 1.1326 high from the 26th of March. The main trend line, drawn from 1.1448 (20th of March), runs through 1.1207. The trend line breakout signifies the end of the downwards movement. We can start talking about a full reversal when the pair breaks 1.1250.
At the time of making the chart, the pair was trading at 1.1216. The pair has returned to the balance line. The bulls now need to defend 1.1210. If this level is broken, there’s a risk of dropping to 1.1184. If the pair exits the channel (dashed line) upwards, then we can turn our attention towards the 1.1263 mark.
Be warned that Brexit is going to dominate the headlines until Friday. On Friday, US labour market data will be released.