Forex Technical & Market Analysis: April 04 2013

2013-04-04 05:30 GMT

IMF will lend 1 billion euros to Cyprus

The IMF announced on Wednesday that its contribution to the Cyprus bailout would amount to 1 billion euros. It has also presented the harsh conditions of the aid. These include increases in taxes: the corporate tax is to be raised from 10% to 12.5%, while the income tax from 15% to 30%. Additionally, Cyprus is required to introduce more austerity measures in order to reach a 4% GDP surplus target in 2018. "There will be protection for the most vulnerable groups. The social welfare system will be reviewed to streamline administration costs, minimize the overlap of existing programs, and improve their targeting to ensure that public resources reach those in need," IMF chief Christine Lagarde said on Wednesday. She also added that the funds should be approved by the IMF board at the beginning of next month.

The euro traded slightly higher against the U.S. dollar ahead of the European Central Bank's monetary policy announcement. The ECB is widely expected to leave interest rates unchanged but given the recent weakness in German economic data and problems in Cyprus, there's speculation that the ECB could lay the foundation for a rate cut. If that were the case, it would be signaled in Mario Draghi's post monetary policy meeting press conference. There are plenty of reasons for why the ECB may be warming to the idea of more stimulus but German stocks have recently climbed to 5 year highs and the EUR has fallen – two factors that help to support the region's economy. That may not be enough to wash away the ECB's concerns but it's a factor in this week's central bank meeting. Either way, we don't expect any optimism from the ECB and pessimism alone could sink the EUR if Draghi even hints that a rate cut is possible. The cracks are beginning to show in Germany and Cyprus could be the first of many weaker southern European nations such as Slovenia to seek emergency funding from the ECB. To preempt some of these difficulties, Draghi may want to ease. When the ECB plans to change monetary policy, they usually like to prepare the market for the move by dropping hints early. However if we are wrong and Draghi sounds calm and unconcerned about the recent deterioration in economic data and the problems in Cyprus and Italy, it would be just what the EUR/USD needs to stage a stronger recovery towards 1.30. -FXstreet.com

FOREX ECONOMIC CALENDAR

N/A

Japan. BoJ Monetary Policy Statement and press conference

2013-04-04 11:00 GMT

UK. BoE Interest Rate Decision

2013-04-04 11:45 GMT

EMU. ECB Interest Rate Decision

2013-04-04 14:30 GMT

USA. Fed's Bernanke Speech

FOREX NEWS

2013-04-04 04:50 GMT

USD/JPY jumps above 93.5 as BoJ delivers

2013-04-04 04:33 GMT

EUR awaits ECB frozen near 1.2850

2013-04-04 02:50 GMT

Gold could fall sharply another $200 – RBS

2013-04-04 00:43 GMT

AUD/USD higher on better data than expected

Forex Technical Analysis  EURUSD

MARKET ANALYSIS – Intraday Analysis

Upwards scenario: Market remains sideways oriented. Next hurdle on the upside might be found at 1.2853 (R1). Break here would open road towards to our interim aim at 1.2869 (R2) and enable final intraday resistive measure at 1.2883 (R3). Downwards scenario: On the other hand, break below the support at 1.2824 (S1) would open a route for a recovery phase. Further market decline would then be targeting next supportive measures at 1.2807 (S2) and 1.2790 (S3).

Resistance Levels: 1.2826, 1.2844, 1.2860

Support Levels: 1.2794, 1.2777, 1.2761

 

Forex Technical Analysis  GBPUSD

 

Upwards scenario: Upside risk aversion is seen above the next resistance level at 1.5141 (R1). Appreciation above it would suggest us about the positive intraday bias formation towards to our next targets at 1.5158 (R2) and 1.5175 (R3). Downwards scenario: Instrument has comfortably declined during the Asian session and further downside extension is protected now by support level at 1.5098 (S1). Loss here is required to enable our initial targets at 1.5082 (S2) and 1.5065 (S3)

Resistance Levels: 1.5141, 1.5158, 1.5175

Support Levels: 1.5098, 1.5082, 1.5065

Forex Technical Analysis  USDJPY

Upwards scenario: Current price setup might suggest volatility increase in near term perspective. If the price get acceleration on the upside and manages to surpass our next resistive mean at 94.37 (R1) next visible targets could be exposed at 94.55 (R2) and 94.72 (R3) later on today. Downwards scenario: The short oriented traders expected to be in play below the next support level at 93.87 (S1) to confirm downside evolvement. Clearance of this level I required to open way towards to our next targets at 93.68 (S2) and 93.49 (S3).

Resistance Levels: 94.37, 94.55, 94.72

Support Levels: 93.87, 93.68, 93.49