Daily F.X. Analysis, March 09 – Top Trade Setups In Forex – Risk Sentiment Keeps the Market in Action! 

The U.S. Dollar Index plunged 0.9% on the day to 95.95 on Friday, as treasury yields slumped amid sinking investors’ risk appetite. The Eurozone Sentix Investor Confidence Index for March will be released (-11.4 expected). The German Federal Statistical Office will announce January industrial production (+1.6% on month expected) and trade balance (15.3 billion euros surplus expected).

The Bank of France will post February Industry Sentiment Indicator (95 expected).

Economic Events to Watch Today  

 

 

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EUR/USD – Daily Analysis

The EUR/USD climbed 0.4% to 1.1286. Official data showed that German factory orders grew 5.5% on month in January (+1.3% expected). The coronavirus breaks in China and South Korea seem to be lagging, as countries outside in the world embrace drastic steps to try and stamp out the virus. 

In Italy, where 16 million people in Lombardy and different sections of the north are presently below quarantine, there were 133 life losses announced on Sunday, drawing the sum to 366. More than 7,000 people in the country have been verified to have the disease. 

In Iran, there were 49 new deaths. Some 194 people have now expired from COVID-19 there. Although the latest numbers from China and South Korea suggest, the virus seems to be diminishing in northeast Asia.

At the data front, the German Industrial Production and the Current Account data are scheduled to release at 07:00 GMT, followed by the Eurozone Sentix Investor Confidence at 09:30 GMT. The German Federal Statistical Office will report January industrial production (+1.6% on month expected) and trade balance (15.3 billion euros surplus expected).

Daily Support and Resistance

• S1 1.1016
• S2 1.1152
• S3 1.1221

Pivot Point 1.1288

• R1 1.1356
• R2 1.1424
• R3 1.1559

EUR/USD– Trading Tips

The EUR/USD is trading with a bullish bias around 1.1445. The EUR/USD seems to extend the bullish trend in the wake of completing the 161.8% and 261.8% Fibonacci extension level, out of which 161.8% has already been achieved until 1.1258. At the moment, the EUR/USD is trading at 1.1458, and bullish breakout of this level can extend buying until 1.1610 level. On the lower side, the EUR/USD may find support around 1.1400 and 1.1296. The RSI and MACD are in the buying zone as the MACD’s histograms are over zero, the bullish zone. Consider taking buy trades above 1.1380.

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GBP/USD– Daily Analysis

The GBP/USD climbed 0.6% at 1.2951 to hit its highest mark in a week to the greenback. This came after the forecasts waned for an urgent Bank of England rate cut to follow this week’s emergency movement from the U.S. Federal Reserve to accommodate coronavirus damage. 

The U.S. official data showed that the economy added 273,000 non-farm payrolls in February (+175,000 expected), and the jobless rate dropped to 3.5% (3.6% expected). Average hourly earnings were up 0.3% on the month (as expected). 

January trade deficit was posted at US$45.3 billion (US$46.2 billion expected), and wholesale inventories (final reading) fell 0.4% on the month (-0.2% expected). Despite mixed economic events, the U.S. dollar is getting weaker and driving the GBP/USD pair higher. 

On Monday, the Sterling languished to a five-month low against the Euro, amidst a fresh market panic about the coronavirus outbreak that has prompted significant falls in stocks and oil.

Daily Support and Resistance    

• S1 1.281
• S2 1.2913
• S3 1.2981

Pivot Point 1.3017

• R1 1.3084
• R2 1.312
• R3 1.3224

GBP/USD– Trading Tip

On Monday, the GBP/USD is showing some severe bullish moves in the wake of a weaker dollar and strong Sterling. The GBP/USD soars to trade around 1.3180 and continuation of a bullish trend can extend buying until 1.3200 and even higher. 

During the start of the day, the GBP/USD opened with a dramatic gap, but it soon recovered to fill the gap around 1.3032. Right now, the GBP/USD has formed a solid green candle on the 240 minutes timeframe, which may help drive further buying in the Sterling. The MACD is consistently forming bullish histograms over zero points, supporting the buying trend in the GBP/USD pair. Let’s consider buying over 1.3145. 

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USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped to multi-year lows mainly due to the early-Asian risk-off market sentiment in the wake of coronavirus fears and fall in oil prices. However, the pair is struggled to gain its recovery of over 100 pips from the 3-year lows after downbeat GDP data and trading above mid-102.00s. The USD/JPY currency pair is currently trading at 102.64 and consolidates in the range between the 101.59 – 104.58 on the day.

Moreover, the U.S. yields have recovered slightly from the lows seen after the U.S. Fed’s rate cut. The 2-year yield is currently trading at 0.68%, representing a seven basis point gain on the overnight low of 0.61%, and the 10-year yield has recovered to 0.98% from $0.91%. The currency pair continued to its recent heavy losses and still trading under some heavy selling pressure for the 2nd-consecutive session on Friday.  

On the fundamental side, the headlines growth figure confirms the -1.7% market consensus versus -1.6% initial forecast. The GDP data confirms further challenges to the Asian economy due to coronavirus (COVID-19) fears that have been pushing to the quote downwards.

Daily Support and Resistance

• R3: 109.46
• R2: 107.99
• R1: 107.08

Pivot Point 106.52

• S1: 105.61
• S2: 105.06
• S3: 103.59

USD/JPY – Trading Tips

The USD/JPY is trading at 102.200, breaking below the bearish channel, which supports the Japanese yen at 104.400. The increased demand for safe-haven assets is driving strong bearish trends in the USD/JPY currency pairs. Recently, the USD/JPY has closed two consecutive selling candles, which are followed by the bearish breakout setup and suggesting odds of further bearish bias until 101.650. 

Selling trend continuation can lead the USD/JPY prices towards 101.670 whereas, further selling can lead the USD/JPY to 100.450 area

All the best for today!