The EUR/USD currency pair
- Prev Open: 1.0949
- Prev Close: 1.0885
- % chg. over the last day: -0.59 %
The dollar index gained 0.57% on Thursday's hawkish US PPI report, which made market participants somewhat weaken their expectations of a Fed rate cut in the next few months. The dollar index was also supported by a 10 bps surge in 10-year T-note yields on Thursday, which improved the dollar interest rate differential. Following the report, the probability of a rate cut from the US Fed fell from 73% to 67%.
- Support levels: 1.0867, 1.0840, 1.0822, 1.0796
- Resistance levels: 1.0902, 1.0930, 1.0953, 1.1000
The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price bounced sharply from the resistance level of 1.0953. Now, the quotes have approached the level of priority change at 1.0867. Here, it is important to estimate the reaction of buyers. If, after the test of 1.0867, the price will return with buy-side initiatives, we can consider buying with the target of 1.0902 or even 1.0930. If the buyers fail to react after the test of 1.0867, there will be a priority change, and the price may drop to 1.0841.
Alternative scenario: if the price breaks the support level of 1.0867 and consolidates below, the downtrend will likely resume.
- – US NY Empire State Manufacturing Index (m/m) at 14:30 (GMT+2);
- – US Industrial Production (m/m) at 15:15 (GMT+2);
- – US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2).
The GBP/USD currency pair
- Prev Open: 1.2799
- Prev Close: 1.2752
- % chg. over the last day: -0.37 %
The pound sterling fell against the US dollar after the release of solid US data, which led to renewed demand for the dollar. Comments from Bank of England Governor Andrew Bailey added to the pressure on sterling, as he said that central bank officials have addressed the question of how long they need to keep interest rates on hold, given that there are some signs that restrictive policies are working to reduce inflationary pressures.
- Support levels: 1.2722, 1.2686, 1.2634, 1.2611, 1.2560, 1.2538, 1.2499
- Resistance levels: 1.2773, 1.2805, 1.2829, 1.2861, 1.2885
From the technical analysis point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish but close to change. Yesterday, the price declined sharply without noticing a single support level. Recent volume spikes indicate strong selling pressure. Today, we are watching the price reaction to the priority level of 1.2722. If buyers take the initiative and the price consolidates above 1.2745, we can consider buying with a target of 1.2773. There are no optimal entry points for selling now.
Alternative scenario: if the price breaks through the support level of 1.2722 and consolidates below it, the downtrend will likely resume.
- Prev Open: 147.66
- Prev Close: 148.28
- % chg. over the last day: +0.42 %
- Support levels: 147.06, 145.87
- Resistance levels: 148.29, 148.79, 150.22, 150.73, 150.87, 151.90.
- Prev Open: 2175
- Prev Close: 2162
- % chg. over the last day: -0.60 %
- Support levels: 2154, 2131, 2110, 2080, 2057
- Resistance levels: 2200
- – US NY Empire State Manufacturing Index (m/m) at 14:30 (GMT+2);
- – US Industrial Production (m/m) at 15:15 (GMT+2);
- – US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2).
The USD/JPY currency pair
The fundamental picture of the USD/JPY currency pair is starting to shift in favor of strengthening the Japanese currency. Recently, there have been more rumors that the Bank of Japan (BoJ) will raise interest rates at its meeting next week. Swaps estimate the odds of a 10 bps rate hike at next week's BoJ meeting on March 19 at 55% and 68% at the April 26 meeting. The Japanese yen lost some positions yesterday due to the strengthening of the temporary dollar. Still, in the medium term, reducing the interest rate differential between the US Fed and the Bank of Japan will contribute to the fall of USD/JPY quotes.
From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The price was corrected to the nearest resistance levels in the background of the temporary strengthening of the dollar. The price tests liquidity above 148.29, but sellers' reactions are weak. Fixing the price below this level may provoke a wave of sell-offs, so it is appropriate to look for sales here. If the price corrects even higher, the resistance level 148.79 can also be considered for selling. There are no optimal entry points for buying right now.
Alternative scenario: if the price breaks and consolidates above the resistance level at 150.56, the upward trend will likely resume.
The XAU/USD currency pair (gold)
Gold prices declined after Thursday's stronger-than-expected US PPI report, which was hawkish for Fed policy and caused markets to somewhat dampen hopes for a Fed rate cut in the next few months. However, in the medium term, gold has all the prerequisites for a further rally as the Fed and ECB will start cutting interest rates in June.
From the point of view of technical analysis, the trend on the XAU/USD is bullish. There is renewed buying interest in gold. Now, the price forms a flat accumulation in a triangle. A breakout of the upper trend line will open the price to 2200. The support level 2154 has already kept the price from going down 3 times, and its retest will probably lead to a downside breakdown with a target to the support level 2131 or immediately to the priority change level 2123.
Alternative scenario: if the price breaks below the support at 2123, the downtrend will likely resume.
by , 2024.03.15
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