Markets Trade Mixed On The First Trading Day Of The Month

The markets traded somewhat mixed into the close of the first quarter. There was a bit of volatility with the month end and quarter end flows. Gold managed to recover from the losses while the euro traded subdued. Brexit continues to dominate the news as PM May lost a third bid for a Brexit deal. The countdown continues as the UK's new deadline to leave the EU has been extended to April 12th.

 

USD Holds Gains on Better Than Expected Economic Data

The U.S. dollar managed to hold on to the gains on the last trading day of the month. On the economic front, the personal consumption expenditure data showed a 0.2% increase on the month in February. This was a modest increase from 0.1% in January. New home sales rose 4.9% in February.

 

Will the Euro Move Higher?

The EURUSD currency pair has been trading subdued as it approached the support area of 1.1217. The Stochastics have turned flat near the oversold levels and this could indicate a modest bounce to the upside. The near term support at 1.1294 remains a key level of interest to the upside. If the euro fails to recover off the current support, we expect a test of 1.1174 to the downside.

 

Yen Trades Mixed on Tankan Survey

The Bank of Japan's quarterly Tankan surveys showed a mixed result. Manufacturing sector eased to 12, falling from 19 in the previous quarter and missing estimates. The nonmanufacturing sector was also lower at 21, easing from 24 in the previous quarter. Both the surveys missed the median estimates and came out lower than expected.

 

Can the USDJPY Maintain the Gains?

The USDJPY currency pair gapped higher on today's open and price action is likely to test the upside near 111.40. Establishing resistance here could potentially confirm the medium term sideways range between 111.40 and 109.84 levels. The bias shifts only if the USD/JPY will be able to break out past 111.40.

 

Gold's Decline Takes A Pause

Gold prices stalled on Friday after posting strong declines the day before. Price action attempted to retrace the losses from the day before but settled modestly lower on the day. The precious metal remains mixed as investors look to the new trading month and easing concerns about the yield curve.

 

Will Gold Bounce Off the Support?

XAUUSD prices settled at the support area of 1290 on Friday and are seen posting a rebound off the level earlier today. The Stochastics on the 4-hour time frame indicates a move from the oversold level. There is scope for a rebound which could see a correction toward 1306 at the very least. However, price needs to break above the near term highs of 1299 – 1300.