Daily Analysis by VTFX

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Sterling hit day's highs against the dollar before quickly retreating in choppy trade on Wednesday, with Britain's formal triggering of its departure from the European Union providing the currency with no clear direction.

The euro fell to its lowest in eight days against the dollar on Wednesday after a Reuters report that European Central Bank policymakers are wary of making any new change to their policy message in April.

Small tweaks at the ECB's meeting earlier this month appear to have upset investors and raised the spectre of a surge in borrowing costs for the bloc's indebted periphery

Dollar Index could have made a low which may see a rally. I am staying aside until further evidence, as we know pick tops and bottoms is very hard.

 

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The dollar was flat on Thursday after weak reports on euro zone inflation took the edge off news that U.S. President Donald Trump's administration was studying ways to "penalize currency manipulators" to fulfill a campaign pledge.

News reports suggest the Trump administration is "assessing the scope of its power to penalize countries whose currencies it believes are undervalued," which could drive the dollar lower. The report provided no details about how the administration would do this.

While campaigning, Trump promised to label China a currency manipulator on his first day as president, but so far has taken no action.

Sterling hit a day's high against the dollar on Thursday as the dollar fell broadly.

It is already up on the day as investors bought back into the currency after Britain lodged its formal request to leave the European Union, benefited from the greenback's weakness.

We see the value of Sterling as overvalued so the recent spike has given us great opportunity to build shorts.

 

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The euro hit a two-week low after data showed inflation in the currency bloc slowed by far more than expected in March, giving the European Central Bank room to scale back monetary stimulus only gradually.

The single currency has fallen over 1 percent against the dollar - its worst showing in seven weeks as investors have revised their expectations for when the ECB will begin to normalise monetary policy.

Sterling fell against a broadly stronger dollar after revised UK economic output figures struck a downbeat tone, with background uncertainty after Britain triggered the formal process to leave the EU keeping up the pressure on UK assets.

 

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The euro hit a three-week low against the dollar as mixed economic data coming out of Europe added to existing worries about political risk in the continent, driving investors to sell the single currency.

Sterling slipped after data showed British manufacturing lost momentum last month, the latest sign the economy may be running out of steam after its surprising resilience in the wake of last year's Brexit vote.

There is a lot of news out this week so there could be some moves

 

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Forecasts have been accurate thus far.

Apart from a few pairs, there is not much movement. Be patient and wait for volatility to return.

 

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The dollar edged up against the yen in European trading on Wednesday but fell short of broader gains after North Korea test-fired a ballistic missile ahead of a key meeting between U.S. and Chinese leaders.

Volume remains thin so not much change. It is important to stay patient and not go looking for trades when they are not there. Let the market come to you, don't go chasing it!

 

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Patience is required in here at the moment. Markets have been choppy and many correcting. As a write this there is potential for them to start breaking down but I want to see some nice clean breaks with impulsive price action if I am to consider positioning myself.