The PMI manufacturing index of UK could give a support to the British pound across the broad. The index came at 39.1 in March and it was expected to be 35. The cable could creep above 1.44 again and it is now trading at 1.45. The cable has found support at 1.41 in the beginning of this week after falling from 1.4777 and the next resistance should be at 1.4635 then this former high at 1.4777 and the way down should be met with a support at 1.425 then 1.411 then the main support level at 1.3843.
The single currency is still depressed by the waited ECB interest rate decision today which is expected to be a cut by another .5% to just 1% and the press conference of the ECB president Jean Claude Trichet which is expected to have a dovish tone downgrading the inflation upside risk and elevating the growth down side risks amid the current credit crisis negative impacts on the euro zone economy which is sake of further easing to encourage the banks to lend again as the flash release of the EU HICP of March has come at just .6% y/y and the market was waiting for .9% and this shows the current tame inflation pressure while we are still having increased of the unemployment rates which reached 8.1% last month in Germany with a decline of the germane retail sales of the same month 5.3% y/y and .2% monthly reflecting the very week consuming sentiment which declined to -34 in the Euro zone last month while EU PMI of this same month is still sinking in the contracting territory below 50 at 33.9. The single currency could find a support versus the greenback this week above 1.31 below 1.32 but it is still unable to break above 1.335 as the single currency was under technical pressure after the breaking of 1.341 by the end of last week.
The equity market could close again in the green territory yesterday in US with potential worries about the future of the Car making in US and what can come from the G20 meeting in London. Dow closed at 7762 up by 2.01% in spite of this week weak release of US which have shown a declining of the US consuming confidence in March to just 26 from 25 in Feb and the weak Chicago PMI figure which came deeply in the contraction territory at 31.4 and the market was waiting for 35 in March and also yesterday release of US March ADP employment which was -742k which refers to a continuation of the massive pace of contraction in US and further declining of the consuming spending to come.
Best wishes
FX Consultant Walid Salah El Din E-Mail: snipped-for-privacy@fx-recommends.com