On the forex front, the U.S. Dollar Index eased 0.2% on the day to 99.72. On the economic data front, the Conference Board U.S. Leading Index dropped 6.7% on month in March (-7.2% expected). Today, the focus will be on the Eurozone’s economic events, which include the Trade balance, PPI, and current account, and these are due during the European session.
Economic Events to Watch Today
EUR/USD – Daily Analysis
The EUR/USD gained 0.4% to 1.0878 and GBP/USD rebounded 0.3% to 1.2501. The markets are now concerned about extended lockdowns indicating a deeper economic recession than previously forecasted. Moving on, the market sentiment is expected to stay pro-risk during the day ahead.
European stocks rebounded further, with the Stoxx Europe 600 Index gaining 2.6%. Germany’s DAX climbed 3.2%, the U.K.’s FTSE 100 increased by 2.8%, and France’s CAC jumped 3.4%.
The coronavirus outbreak has brought the deep divides among the member states on fiscal spending. Italy and Spain have blamed northern nations led by Germany and the Netherlands – of not doing enough.
Whereas Italy, Spain, France, and some other countries need debt mutualization through corona bonds, Germany and the Netherlands are still not buying the idea of community debt needed to control the economic fallout from the virus outbreak.
Looking forward, as the data calendar is light with no first-tier releases scheduled for release in the Eurozone and the U.S. The traders keep their eyes on the coronavirus related updates for meaningful direction.
Daily Support and Resistance
- S1 1.0698
- S2 1.0779
- S3 1.0826
Pivot Point 1.0859
- R1 1.0907
- R2 1.094
- R3 1.1021
EUR/USD– Trading Tips
On Monday, the EUR/USD is trading sideways at 1.0835, exhibiting a bearish crossover below 50 EMA, which is now extending resistance around 1.0903 level. Continuation of a selling trend below 1.0903 level can extend selling until the next support area of 1.0772, but on the way, the pair may find support around 1.0815 level. The EUR/USD is likely to find support around 1.0772, but below this, the next support prevails around 1.0652 level.
At this moment, the EUR/USD is holding at 1.0835, having an immediate resistance level of around 1.09230, where the bullish breakout of this level can extend buying until the next resistance level of 1.1036. Conversely, we should look for selling trades below 1.0870.
GBP/USD– Daily Analysis
The GBP/USD rebounded 0.3% to 1.2501 and consolidated in the range between the 1.2604 – 1.2450. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively more significant in the U.S.
Moreover, the United Kingdom and European Union Brexit drama keep moving while the latest news recommending to keep a check of Britain’s £39 billion has also been underlined by the cost of dealing with coronavirus especially the economic £250 billion rescue package announced by Chancellor Rishi Sunak to protect jobs and businesses.
On the other hand, U.S. President Donald Trump showed some willingness for another relief plan while also supporting an economic re-open plan.
Looking forward, all traders will keep their eyes on the coronavirus headlines due to a light economic calendar. However, any surprise announcement of stimulus might grab the spotlight.
Daily Support and Resistance
- S1 1.2254
- S2 1.2365
- S3 1.2433
Pivot Point 1.2475
- R1 1.2544
- R2 1.2586
- R3 1.2697
GBP/USD– Trading Tip
The GBP/USD is trading with a neutral bias over 1.2420 support areas to trade around 1.2446. The GBP/USD pair is likely to find support around 1.2420, which is extended by the triple bottom level that we can see on the 4-hour timeframe. A bearish breakout of 1.2425 support area is expected to trigger a sell-off until 1.2210. The 50 periods EMA is also keeping the GBP/USD pair supported around 1.2430. Thus, the bounce off above this level can lead the GBP/USD pair towards the next resistance level of 1.2657. While bearish breakout of 1.2460 can open up further room for selling until the next support area of 1.2220.
USD/JPY – Daily Analysis
The USD/JPY is flashing green and registered fresh gains near the 107.94, mainly due to the broad-based U.S. dollar strength in the wake of intensifying coronavirus fears, keeps the market tone heavy on the day. The slump in the Japanese exports for March keeps Japanese yen down, which also supports the currency pair to stay at the upside. The USD/JPY is trading at 107.84 and consolidates in the range between the 107.50 – 107.94.
At the USD front, the U.S. dollar continues to take bids mainly due to its safe-haven demand in the wake of intensified coronavirus fears. As per the latest report that the United States death toll rose above 40,000, whereas SkyNews mentions the U.K. has a bit over 16,000 people who died from the virus.
On the other hand, the reason behind the fresh risk-off market sentiment is the rise in the coronavirus (COVID-19) related death figures from the U.S. and the U.K. Whereas, the lack of clarity on the easing lockdown keeps the investors confused, as the new infections continue to rise globally.
Daily Support and Resistance
- S1 105.92
- S2 106.84
- S3 107.44
Pivot Point 107.76
- R1 108.36
- R2 108.69
- R3 109.61
USD/JPY – Trading Tips
The technical side of the USD/JPY has not changed much as it’s price continues to hold above the triple bottom area of 107.039. The MACD and 50 periods of EMA are suggesting bearish bias. Therefore, a downward breakout of this level can extend selling until 105.300, while the resistance holds around 108.640. We should look for selling trades below 107 to target 106.630, and buying can be seen above the same 107.360 level today.
All the best for today!