The US recession is continuing to deepen as the Non Farm Payrolls came out Friday showing an unexpected decline of 80,000 jobs. Investors now fear that the US economy may take longer than expected to revive. As more heat is added on the US, the greenback depreciates against major currencies losing more grounds while traders flee the US dollar currency. Today the greenback reversed to try and gain some of its losses that were witnessed after fundamentals disappointed many traders. Technical movements today are dominating the markets.
The euro gained against the greenback as they released their fundamental data showing that Germany released its industrial production for the month of February coming in at 0.4% better than the expected reading of -0.4% yet less than the revised previous reading of 1.4% from 1.8%. Also the industrial production annual reading came in at 6.1% higher than the projected reading of 5.3% but also slightly lower than the revised prior reading to the downside to 6.5% from 6.9%. As this data gave support to the single currency it helped restore some losses that we witnessed at the start of this morning's session. The EUR/USD pair is currently trading at 1.5719 while recording a high of 1.5732 and a low of 1.5626.
As for sterling, it is depreciating against the greenback on anticipations that the BoE will slash their lending rates by 25 basis points later on this week in order to help restore the UK economy. Also the economy is continuing to suffer the exists turbulence in the financial markets. We see a minor resistance at 1.9920s and a minor support at 1.9840s as the GBP/USD pair is traded at 1.9870 after recording a high of 1.9932 and a low of 1.9834.
Carry trades are seen in the markets today, in which traders buy high yielding assets and sell low yielding assets. A victim to carry trades is the yen as it losses grounds against major currencies. Also in news, the BoJ on April 9 is expected to keep their interest rates steady which helped strengthen traders' confidence. As confidence was restored, Japanese stocks soared to show the largest gain in a month. The technical indicators show the major support is at 102s in which the pair since the mornign breached to trade above it now currently trading at 102.63 while recording a high of 102.84 and a low of 101.62.
