US Dollar continues to look slightly bearish

Among the four currency majors, Cable (GBP/USD) has been the biggest mover of the day, while the others have been trapped in range-bound action in the forex market. At the moment, the US dollar does not have a lot going for those who are bullish on its prospects. US manufacturing activity grew more slowly than expected in March, amid accelerating price pressures. Manufacturing index for March moved to 50.9 (52.0 expected), from 52.3 in February and 49.3 in January. Adding to...


the bearish sentiment is the IMF's (International Monetary Fund) data that foreign central banks reduced their USD composition to 64.7% of reserves in Q4 from 65.8% the previous quarter.


Beneficiaries of these reduced USD levels are the Euro (up to 25.8% in Q4 from 25.1% last), Pound (4.4% from 4.3%) and Yen (up to 3.2% to 3.1%).


From now till Friday, we'll most likely see a smaller degree of volatility in the majors, except for Cable as the Bank of England is scheduled to announce its rate decision this Thursday.

USD/CHF's nearest support is around 1.2070-80, then 1.2030-50. Nearest resistance is around 1.2190-2200, then 1.2240, then 1.2260-80.

EUR/USD's nearest ceiling still remains around 1.3400-10. Above here, 1.3460-70, then 1.3380-1.3400 are next possible topside obstacles. Support is around 1.3330, then 1.3280-1.3300.