The last trading week of the first quarter starts with financial markets in consolidation. This is a short week due to the Good Friday holiday next Friday, but it does not mean that ranges will still dominate.
Last week, the stock market indices ended up at the highs, mounting a strong rally in the last two trading days of the week. For example, the Dow Jones in the United States closed the week close to all-time highs, and the bullish tone was seen on all other stock market indices.
However, it does not mean that the dollar was weak – just the opposite. The dollar traded with a bid tone, gaining against the euro and other G10 currencies.
The Dax index in Germany is flat to start the trading week, just like other indices in Europe, as the E.U. Summit did not bring anything new to financial market participants.
On the commodities front, oil is down over1%, despite the fact that the Suez Canal is still blocked by a ship. Gold and silver are down as well, while copper holds above the $4,000 level.
This is the NFP week, and therefore, anything happening during the trading week in terms of price action should be taken with a grain of salt. Because of the Good Friday holiday, the NFP will be released when banks are closed, which means less volatility surrounding the release of the most important piece of economic data for financial market participants.
The day ahead brings no important economic events, and most likely market participants prepare for the end of the trading month and the NFP to be released at the end of the trading week.
Markets to Watch
S&P500, EURGBP, USDJPY – markets in focus today.
The most important stock market index in the world formed an ascending triangle and threatened to break higher. The pattern is known for the price action pushing against horizontal resistance, and the break higher should push the index above 4,200 according to the measured move.
Ever since Brexit, the EURGBP cross pair has declined. It recently formed a descending triangle that appears to have broken today. Ahead of the end of the month flows, the break lower is important because the bigger picture does not show any other support until 0.82 or even lower.
The USDJPY pair threatens to break the round 100 level, as it keeps finding buyers on every dip. However, a bearish divergence with the RSI tells traders that bulls should be cautious on any advance.
Winners and Losers
The GBP is the winner of the day so far, while the EUR remains weak.