Daily F.X. Analysis, March 27 – Top Trade Setups In Forex – Weaker Dollar In Play! 

The greenback fell against its major peers, with the Dollar Index dipping 0.7% on the day to 100.94, down for a 4th consecutive session. France’s INSEE will release March Consumer Confidence Index (91 expected).

The U.S. Commerce Department will report February personal spending (+0.2% on month expected) and personal income (+0.4% on month expected). The University of Michigan (UOM) will report its final rea1dings of the March Consumer Sentiment Index (90.0 expected).

 Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD rallied 1.5% to 1.1047, posting a four-day winning streak. The risk-on market sentiment is also pushing the U.S. Dollar lower and sending the pair higher. The recovery in the risk-sentiment came after the U.S. Senate approved of the original $2 trillion fiscal stimulus package.

A series of economic fundamentals drove the pair, and even today market is likely to move on news. In particular, the U.S. initial jobless claims are expected to have risen to 1,000K from the preceding week’s 281K figure in the week ended March 20. 

If jobless claims fall in the 2 to 3 million range, which seems fairly possible, we will likely see a notable sell-off in the greenback. In that case, the EUR/USD currency pair could find a bid over the 50-day moving average at 1.10. 

On the other hand, the EUR/USD currency pair will also take cues from the Kansas Fed Manufacturing Activity index for March. The European Union’s upcoming emergency meeting to discuss further steps to combat the virus will be essential to watch. 

Markets are assuming that the Eurozone is going for a deep slowdown, and they need aggressive stimulus to stop the fallout from the virus outbreak. Later today, eyes will be on France’s INSEE, which is due to release March Consumer Confidence Index (91 expected).

Daily Support and Resistance

• S1 1.0673
• S2 1.0835
• S3 1.0935

Pivot Point 1.0997

• R1 1.1097
• R2 1.1159
• R3 1.1321

EUR/USD– Trading Tips

The EUR/USD is trading bullish at 1.1025, having an immediate support level of around 1.0947. The bullish channel has already been violated on the higher side, and it’s supporting is the bullish bias in the EUR/USD pair. On the higher side, the EUR/USD pair is facing resistance at 1.1070 area. 

Bullish crossover of 1.1070 area can open further room for buying until 1.1194 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to hold below 1.1070 level today. On the lower side, the target is likely to stay at 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD surged 2.6% to 1.2192. The Bank of England said, after announcing a rate cut and additional bonds purchase last Thursday, it can expand asset purchases further if necessary. On the other hand, official data showed that U.K. retail sales declined 0.3% on month in February (+0.2% expected).

The policymakers could be called with the 24-hour prior notice to vote on the coronavirus support package on Friday. On the U.S. front, the coronavirus fears in the U.S. also increased with the death losses crossed 1,000 figures and an increase of 12,000 cases recorded in the single day on Wednesday.

The Bank of England (BOE) failed to offer any fireworks due to a lack of resources while disappointing U.K. Retail Sales, to 0.0% from 0.8% YoY forecast, also couldn’t recall the bears.

Later today, the U.S. Commerce Department will report February personal spending (+0.2% on month expected) and personal income (+0.4% expectation). The University of Michigan will report Consumer Sentiment Index (90.0 expected).

Daily Support and Resistance

• S1 1.1339
• S2 1.1535
• S3 1.1662

Pivot Point 1.1731

• R1 1.1858
• R2 1.1927
• R3 1.2122

GBP/USD– Trading Tip

The GBP/USD has violated the double top resistance level of 1.1945, and the pair now trades around 1.2180, the level which is marked as horizontal resistance. Today, the bullish breakout of the 1.2300 level can open the buying trend until the next resistance level of 1.2338 (50% Fibo level) and 1.2510 level, which accounts for a 61% retracement. On the lower side, the Cable can find support around 1.2035 and 1.1930. Let’s look for buying trades over the 1.1945 support level and selling below 1.2350 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and hit the session low near the 108.50, mainly due to broad-based U.S. Dollar weakness. While the greenback continues to lose its ground in the wake of the U.S. relief package. At the time of writing, the USD/JPY is trading at 108.78 and consolidates in the range between the 108.25 – 109.72. 

However, the currency pair faced rejection at 109.72 in early Asia and dropped below the 100-day average support at 109.00 a few minutes before press time to hit a session low of 108.55.

Whereas, the major Asian equity indices like Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi are flashing green.

It is worth to mention that the traders did not give much more attention to the Japanese Yen demand. So, the reason behind the pairs declines is the broad-based greenback weakness. The dollar index, which tracks the value of the greenback against majors, is currently trading at weekly lows near 99.30, having declined by nearly 200 pips on Thursday.

The U.S. dollar continues to lose its ground due to the unprecedented fiscal and monetary stimulus by the U.S. government and the Federal Reserve in the last five days.


Daily Support and Resistance

1. S1 106.51
2. S2 108.16
3. S3 108.75
4. Pivot Point 109.8
5. R1 110.4
6. R2 111.45
7. R3 113.09

USD/JPY – Trading Tips

On Friday, the demand for safe-haven assets such as gold and Japanese yen has surged in the wake of an increased number of coronavirus cases around the globe. Consequently, the USD/JPY pair has dropped to trade at 108.350, down from the 109 level. On the 4 hour chart, the USD/JPY has violated the bullish channel, which is now suggesting bearish bias in the USD/JPY. 

The USD/JPY prices are holding around the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off until 109.850. But in case, the USD/JPY exhibits a bearish breakout below 108.350 level; the pair may drop further until 106.450. 

All the best for today!