Forex Market Analysis

Daily F.X. Analysis, March 20– Top Trade Setups In Forex – Stronger Dollar In Play! 

The U.S. dollar strengthened further as other major central banks eased their monetary policies. The ICE Dollar Index jumped 1.8% on the day to 102.94, posting a three-day rally to the strongest level since Jan. 2017.

Later today, the European Central Bank will post January’s current account balance. The German Federal Statistical Office will report February PPI (+0.2% on-year expected).

The U.K. Office for National Statistics will release February public sector net borrowing, excluding banking groups (0.8 billion pounds expected).

Economic Events to Watch Today    



EUR/USD – Daily Analysis

EUR/USD plunged 2.6% to 1.0662, the lowest level since April 2017. The German IFO Business Climate Index dropped to 87.7 in March (88.0 expected) from 96.0 in February.

Moving on, the greenback may come under pressure and may allow EUR/USD to extend the recovery seen in the Asian session if the risk market further recovers in the European trading hour ahead. After the announcement of stimulus, the ECB President Christine Lagarde showed a willingness to use all essential tools to stop the negative impacts of the deadly virus. 

European stocks returned to positive territory, with the Stoxx Europe 600 Index gaining 2.9%. Germany’s DAX rebounded 2.0%, France’s CAC rose 2.7%, and the U.K.’s FTSE 100 was up 1.4%. A slight improvement in the stocks is also driving the bullish movement in the EUro. 

At the press time, the EUR/USD currency pair turned lower from 1.0980 to below 1.08 due to the strong haven bid around the dollar rose, producing significant gains for the greenback against the bucket of currencies. At the data front, all trader’s eyes on Germany’s Producer Price Index for February and the Eurozone Current Account data for January. Apart from this, the U.S. will release Existing Home Sales for February at 14:00 GMT. 

Daily Support and Resistance

  • S1 1.0434
  • S2 1.0677
  • S3 1.0795

Pivot Point 1.092

  • R1 1.1038
  • R2 1.1163
  • R3 1.1406

EUR/USD– Trading Tips

Lately, the currency pair EUR/USD traded bearishly as it as violated and closed below horizontal support becomes a resistance level of 1.0990. The EUR/USD is currently trading around 1.0750, and it’s forming a lower-lows pattern on the 4-hour chart, which mostly drives a continuation of a selling trend. 

At the moment, the EUR/USD is trading at 1.0750, essentially taking a bullish retracement. The EUR/USD is expected to find a hurdle around 1.0820, and above this, the pair has the potential to target the next resistance level of 1.0930. While the EUR/USD has robust odds of lingering bearish below 1.0920 to target 1.0805. On the daily chart, a violation of 1.0605 can extend the selling trend until 1.0550.

GBP/USD– Daily Analysis

The GBP/USD dipped 0.9% to 1.1499, down for an eighth straight session. The Bank of England lowered its benchmark rate by 15 basis points to 0.10% and announced that it would increase its holdings of U.K. government bonds and sterling non-financial investment-grade corporate bonds by GBP200 billion, to counter the economic shock caused by the coronavirus.

The GBP/USD pair slipped due to a stronger dollar after the U.S. official data showed that housing starts posted at an annualized rate of 1.599 million units in February (1.500 million units expected).

The Coronavirus cases rose from 643 to 3,269 during the last 24 hours in the U.K., but the separation of U.K.e Brexit Chief David Frost got major attention. The reason being his counterpart in the European Union (E.U.), Michel Barnier, also E.U.cing the flu-like deadly disease. As in result, it puts a question mark on the further Brexit talks.

As in result, the Asian stocks follow the foot-steps of Wall Street’s recovery, whereas the U.S. ten-year treasury yieldU.S.also rise to 1.158% by the press time. Due to the lack of major data, investors will keep their eyes on the coronavirus headlines.

Daily Support and Resistance

  • S1 1.0821
  • S2 1.1191
  • S3 1.1328

Pivot Point 1.1561

  • R1 1.1698
  • R2 1.1931
  • R3 1.2301

GBP/USD– Trading Tip

The GBP/USD is finally recovering a bit in the wake of bullish correction and trades around 1.1850. The pair continues to drop for a second consecutive week but seems to close a candle a bit higher this time. On the weekly timeframe, the GBP/USD pair has violated the descending triangle pattern, which supports it around the 1.2030 level. Below the 1.2030 level, the GBP/USD has expected to drop further until the next support level of 1.1245. Since the market was oversold, traders have entered buying to take profit before the weekends. As forecasted, we see bullish correction above 1.1245 level until 1.1885 or 1.2045 level, but then again, chances of selling will remain strong. 

USD/JPY – Daily Analysis

Today in the early Asian session, the USD/JPY currency pair flashing red and turned from the one-month high set earlier. However, the currency pair failed to maintain its early Asian session’s gains and dropped to 109.300 from the high of 111.35, mainly due to the long U.S. Dollar bearish sentiment. As of writing, the USD/JPY currency pairs currently trading at 109.67 and consolidates in the range between the 109.33 – 111.36.

A strong effort by central banks across the world to quiet investor’s moods and decrease fears about the global recession sent the USD lower on the last trading day of the week and was seen as one of the key factors behind the pair’s ongoing corrective drop.

Meanwhile, the losses seemed unaffected by a strong recovery in the global risk sentiment, which seems to weaken the Japanese yen’s safe-haven demand. Investors’ looking for perceived riskier assets due to a positive mood in the equity.

Daily Support and Resistance    

  • S1 105.08
  • S2 107.59
  • S3 109.24

Pivot Point 110.1

  • R1 111.75
  • R2 112.61
  • R3 115.13

USD/JPY – Trading Tips

On Friday, the safe-haven currency pair is trading above 108.400, the previously violated the double top resistance level of 107.950, and closing of candles above this level may drive further buying in the pair. On the 4 hour timeframe, the USD/JPY is trading within an upward channel, which is likely to drive further buying in the pair. 

On Friday, we may see USD/JPY finding support at 108.100 level, and above this, the chances of buying remain stable until the next resistance level of 110. Let’s stay bullish above 108.850 today. 

All the best for today!  

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