Most European and US markets are closed on Good Friday. The Easter weekend includes Monday, so the liquidity in global exchanges will return on April 3 only. Therefore, investors will get a breather after all this fuss about trade wars and prepare for the earnings season. Yesterday, Trump said that he may hold back on a recently negotiated South Korea trade deal until North Korea is denuclearized. Some other signals and statements on the matter may follow in the coming days. So on Tuesday, investors will likely have food for thought and, of course, will continue to follow developments around the tariffs story.
The currency markets, the greenback is mostly on the defensive amid thin liquidity and lack of drivers. The month- and quarter-end market positioning gave the USD a lift earlier this week, but now the bullishness has faded away. EURUSD has found a comfort zone above 1.23, consolidating its modest daily gains. The pair managed to bounce off weekly lows below the 1.23 mark, but the recovery stalled on the back of low-liquidity environment. In order to show a more pronounced bullish bias, the single currency needs a sustainable break above the 20-DMA at 1.2340 which will open the way to 1.24. Next week, euro zone releases preliminary March CPI data, and dismal numbers may undermine the recovery attempts.
GBPUSD is also modestly higher after a three-day slide on the back of dollar strength. The pair found support just above the 1.40 level where the 20-DMA also lies. Following three weeks of gains, the pound turned negative this week. This is mostly amid the local greenback demand, while the overall trend remains bullish. The intraday high is at 1.4060 in a range-bound trading session. The pair struggles to gain its bullish traction as there are no any fundamental or other significant drivers in the market for the time being. Further tone will be determined by important macro releases next week, including PMIs from major countries and the key US NFP employment data.
USDJPY continues its downside correction for the second day in a row, though keeps above the 106.00 mark. Earlier this week, the pair faced a psychological resistance at 107.00 and retreated as the lingering yen demand is still limiting the USD’s upside potential. It is possible that next week will bring fresh fears to the global financial markets, and the Japanese currency may yet attract buyers in this background, enjoying its safe haven status. The key to the downside is the 105.00 level as a break below may send the pair to fresh long-term lows.
Commodity and precious metal markets are also closed today and Monday for the Easter break. On Thursday, Brent crude managed to hold above the $68 threshold and staged a mild recovery above $69. The psychologically important $70 is still in the game, and the price may regain this level next week, should the fundamentals support the move. According to Baker Hughes data, the US drillers cut six oil rigs in the week to March 29, bringing the total count down to 798. This is a positive sign for the market and may support the upside tone in commodities once the market reopens.
Gold prices traded flat on Thursday following fresh bearish attempts. The metal managed to reverse earlier intraday losses as the dollar month-end demand has faded gradually. Earlier this week, gold was under an aggressive selling pressure amid a strengthening greenback. The recent sell-off in precious metal highlights its vulnerability to USD demand. So, in the short term, prices may resume the decline, should the American currency regain the positive impulse. However, the medium-term outlook for gold remains bullish.