Daily F.X. Analysis, March 30 – Top Trade Setups In Forex – German Inflation Figures Ahead! 

The U.S. Dollar Index slid 0.9% on the day to 98.36 on Friday, wiping out most of its gains made in the prior week. During the day ahead, eyes will be on the European Commission will report the Eurozone’s March Economic Confidence Index (93.1 expected) and final readings of the Consumer Confidence Index (-11.6 previously).

The German Federal Statistical Office will post March CPI (+1.4% on-year expected). The Bank of England will release the number of mortgage approvals in February (68,200 expected) and the M4 money supply.

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

The EUR/USD jumped 1.0% to 1.1142, posted a five-day rally. Later today, the eurozone’s March Economic Confidence Index (93.1 expected) and German CPI (+1.4% on-year estimated) will be reported.

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. The European Union’s upcoming emergency meeting to discuss further steps to combat the virus will be essential to watch. 

Global equities recovered last week, as in result, the greenback weakened its bid tone and helped EUR/USD rise from 1.0636 to 1.1148. That was mainly due to the US Federal Reserve declaring an open-ended asset purchase program, and the US Senate passed a special $2 trillion fiscal relief package. 

At the coronavirus front, Italy marked as the second-highest country of confirmed cases in the world after the United States (105,470). Total cases are 92,472 confirmed, marking up the highest death rate in the world. 

Looking forward, the traders will keep their eyes on the Eurozone consumer and business sentiment indices, which are scheduled to release along with the preliminary German Consumer Price index for March. Apart from this, the eyes will be on the Pending Home Sales and the Dallas Fed Manufacturing Index for taking near-term directions.

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

On Monday, the direct currency pair EUR/USD is trading slightly bearish at 1.1025, having an immediate support level of around 1.0947. The major currency pair has formed a bullish channel which is supporting the EUR/USD pair around 1.1060, and below this, the next support is likely to be found around 1.1000. 

On the higher side, the EUR/USD pair is facing resistance at 1.1150 area. Bullish crossover of 1.1150 area can open further room for buying until 1.1195 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to break below 1.1060 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 2.1% to a two-week high of 1.2457. 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.

Guardian indicates the risk for the European Union citizens who have made their houses in the UK illegally. Whereas, Dr. Jenny Harries, deputy chief medical officer for England, said during his daily press conference on Sunday that the current limitations and lockdowns in the UK could continue for six months.

On the other hand, the United States President Donald Trump expects the virus figures to grow sharply in the next 2-weeks if they do not take lockdown seriously. As in result, the market’s risk-tone continues to flash red, with the US 10-year treasury yields declining below 0.70% and most Asian stocks marking losses by the press time.

Looking forward, the U.S. Dallas Fed Manufacturing and Pending Home Sales will be a key watch. Besides, the traders will also keep eyes on the virus headlines.

Daily Support and Resistance

• S1 1.1678
• S2 1.2019
• S3 1.2234

Pivot Point 1.236

• R1 1.2576
• R2 1.2701
• R3 1.3042

GBP/USD– Trading Tip

Technically, the GBP/USD is trading sideways around within a narrow trading range of 1.2275 – 1.2425. Since the Sterling has already crossed over 1.2275 resistance area, this is now going to work as a support. The MACD is still heading into the bullish zone, suggesting strong chances of buying the GBP/USD pair.

On the 4 hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2520, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair just started to flashing green and rose above 108.00 level at the press time, mainly due to the broad-based greenback recovery. However, China’s rate cut by 20 basis points on early Monday and infusion of $7 billion liquidity into the banking system started to giving some support to the equity market and turns the market risk-off tone into risk-on. 

The USD/JPY pair is currently trading at 108.08 and consolidates in the range between the 107.14 – 108.20. The USD/JPY pair was recently trading near 107.25 and was representing a 0.60% loss on the day, having hit a session low of 107.12 a few minutes before press time, but now the pair got boost after slight recovery came in the equity market.

The People’s Bank of China cut the seven-day reverse repo rate to 2.2% from 2.4% and injected $7 billion or 50 billion Japanese yuan into the banking system, which recently gave some support to the equity market.

Before some time, the action by China had failed to put a bid under the risky assets. The futures on the S&P 500 were keeping losses and was reporting a 1% decline on the day. Stocks in Asia were also feeling the pull of gravity with Japan’s Nikkei index was dropping 3.4%. As a result, the safe-haven Japanese yen was getting bid as safe-haven demand.

Looking forward, the currency pair may drop to their lowest level in the future, mainly due to the fears about the Japanese government may declare a state of emergency due to intensifying coronavirus fears. 

Daily Support and Resistance

• S1 106.51
• S2 108.16
• S3 108.75

Pivot Point 109.8

• R1 110.4
• R2 111.45
• R3 113.09

USD/JPY – Trading Tips

The USD/JPY is trading at 107.570, heading towards testing double bottom support around 107.615. For now, the pair is stuck in a narrow range, where the upper limit is 108.500, and the lower limit stays at 107.050. The USD/JPY is facing a bearish pressure in the wake of an increased number of coronavirus cases around the globe which are driving safe-haven appeal in the market.  

Consequently, the bearish breakout of 108.150 support level can lead the USD/JPY prices lower towards 105.950 level. Until then, we should look for doing choppy trading by selling below 108.400 and buying over 108.250. All the best for today!