Daily F.X. Analysis, March 23 – Top Trade Setups In Forex – Fundamentals Side Remains Light! 

During Asian trading hours Monday, the ICE U.S. Dollar Index regained strength at 102.81, while U.S. stock futures hit daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary.

Later in the day, the European Commission will release the eurozone’s March Consumer Confidence Index (-14.0 expected). In the U.S., the Federal Reserve Bank of Chicago will post February National Activity Index (-0.29 expected).

Economic Events to Watch Today    

 

 

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EUR/USD – Daily Analysis

This morning, EUR/USD fell 0.2% to 1.0673, following a 0.4% gain on Friday. Later today, the eurozone’s March Consumer Confidence Index (-14.0 expected) will be released. 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. 

Moving on, the EUR/USD pair may cross the strong resistance level if the risk-off market sentiment gets more worsens ahead. Eventually, it will likely fuel deeper losses in the greenback and may increase demand for the common currency.

The economic calendar is light today with the German Bundesbank’s monthly report is scheduled to release during the European trading session. Therefore, the traders may also take cues from the Eurozone Consumer Confidence for March and the Chicago Fed National Activity Index for February for new directions.

Daily Support and Resistance

• S1 1.0335
• S2 1.0529
• S3 1.0615

Pivot Point 1.0723

• R1 1.0809
• R2 1.0917
• R3 1.1111

EUR/USD– Trading Tips

On Monday, the major 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 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. 

Right now, the EUR/USD is trading at 1.0720, consolidating in a narrow trading range of 1.0817 – 1.0660. The EUR/USD is facing hurdles around 1.0817, and above this, the pair has the potential to target the next resistance level of 1.0930. 

While the EUR/USD has odds of staying 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.

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GBP/USD– Daily Analysis

The GBP/USD retreated 0.7% to 1.1557, after a 1.4% rally in the prior session. During the previous week, the Bank of England lowered its benchmark rate by 15 basis points to 0.10%. It 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).

On the other hand, the U.S. Senate’s failure to pass the much-awaited COVID-19 Bill sent the Treasury yields and Asian stocks down. Apart from this, the conference by the G20 Finance Ministers may also offer some intermediate clues, and it will be key to watch. In contrast, the US Chicago Fed National Activity may also give some meaningful inspiration.

The PM’s Chief adviser Dominic Cummings faced criticism about supporting herd immunity. Therefore any progress in the story could also entertain the GBP/USD traders. 

Daily Support and Resistance

• S1 1.0953
• S2 1.1333
• S3 1.1492

Pivot Point 1.1713

• R1 1.1872
• R2 1.2094
• R3 1.2474

GBP/USD– Trading Tip

On Monday, the GBP/USD prices are consolidating in a broad trading range of 1.1400 – 1.1885. Yet, the trend of the market isn’t clear as investors are waiting for a solid fundamental to drive further movement in the market. On the higher side, the bullish breakout of the 1.1885 level can open the buying trend until the next resistance level of 1.2185 (38.2% Fibo level) and 1.2300 level, which markets 50% retracement while the pair has solid chances of bouncing off over 1.1450 level. A bearish breakout of 1.1425 level can lead the Cable towards the next support area of 1.1050. The MACD is tossing above and below zero as investors are unable to determine the trend of the market. 

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USD/JPY – Daily Analysis

During the early Asian session, the USD/JPY currency pair flashing red and dropped below the 110 marks, representing 0.73% losses on the day mainly due to the U.S. Senate’s failure to pass the much-awaited COVID-19 Bill triggered the strong risk-off market sentiment. 

The Japanese yen is now finding bids as a safe-haven demand has sent the USD/JPY pair lower. The USD/JPY is trading at 110.08 right now, and it continues to consolidate in the range between the 109.67 – 111.260. However, the USD/JPY was initially trading near 111.25 on Friday, due to broad-based USD strength.

Despite positive signals from U.S. President Donald Trump, the Senate declined to pass the much-awaited incentive to control the deadly virus impact. This news initially sent the U.S. equity futures to the limit down.

The President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, followed the role of St. Louis Federal Reserve President James Bullard, who expected the 2nd-quarter (Q2) GDP to decrease by 50% and the increase in Unemployment Rate to 30%. Meanwhile, the Minneapolis head mentioning that the Fed has unlimited cash to support the financial system. As a result, they are trying to support the U.S. dollar.

On the other hand, the coronavirus (COVID-19) fears continue to increase because numbers of the death toll from the U.S. and Italy rising day by day. The 36 cases reported in New Zealand, which is currently taking the market’s attention. Lastly, Japanese media signaled that the Asian countries might soon ban entries of U.S. travelers.

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 Monday, the USD/JPY pair has shown a slight bearish movement, falling from 110.65 level to 109.580. On the 4 hour chart, the USD/JPY has formed a bullish channel that is still intact, and it’s pretty much likely to support the USD/JPY prices around 109.650. 

A bearish breakout of 109.600 level can lead the USD/JPY prices towards the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off again. Conversely, the pair faces resistance around 111 and 112.190 today. Let’s stay bullish above 109.650 and bearish below the same level today. 

All the best for today!