Currency Pairs Market Analysis

[Solid ECN]

US100​

• Markets remained nervous on the final trading day of the week with major European and US indices pulling back​
• Top blue chips indices from Europe dropped over 1% lower while major Wall Street indices, like S&P 500 and Nasdaq, are trading around 1.0-1.5% lower on the day​
• Flight to safety can be spotted on the markets with money flowing to precious metals and bonds​
• Gold is trading over 3% higher on the day as short- and long-term US yields plunge with psychological $2,000 level being just 1% away​
• Markets are pricing around 60% chance of Fed hiking rates by 25 basis points next week and around 40% of keeping them unchanged​
• USD is one of the worst performing G10 currencies today​
• In spite of yesterday's liquidity boost from major central banks, share price of First Republic Bank saw only short-lived relief and is plunging 25% today​
• Credit Suisse remains in the center of attention in Europe with bank calling its CFO teams to work over the week and look for 'scenarios for the bank'​
• Also, media reports saying that major banks are limiting trading with Credit Suisse are mounting. Deutsche Bank and Societe Generale are said to be the latest to restrict trading with CS​
• Energy commodities are pulling back amid an overall increase in risk aversion. Brent and WTI are trading 2% lower and is heading for the biggest weekly drop since April 2022 while US natural gas prices plunge 7%​
• Downward pressure on US natural gas prices is further magnified by new weather forecast for the United States that hint at near- or above-average temperatures in key heating regions over the next 2 weeks​
• University of Michigan consumer sentiment for March missed expectations significantly, dropping from 67.0 to 63.4 (exp. 67.0). Both current situation and expectations subindices missed estimates significantly​
• In spite of risk-off moods seen across most financial markets, cryptocurrencies are having a great day. Bitcoin jumps 6% and trades in the $26,500 area​

Nasdaq-100 (US100) failed to sustain bullish momentum and break above the 12,750 pts resistance zone. The index is pulling back today as concerns over the condition of the US and European continue to linger over markets. However, Nasdaq-100 drops the least among major Wall Street indices due to an almost non-existent share of the banking sector in the index.​

 

[Solid ECN]

EURUSD​

The EURUSD pair shows calm positive trades to gradually towards our waited target at 1.0745, getting good support by the EMA50, to keep the bullish trend suggested for the upcoming period.

It is important to monitor the price when reaching the targeted level, as breaching it will extend the bullish wave to reach 1.0920 areas as a next main station, while consolidating against the bullish wave will press on the price to rebound bearishly to test the minor support areas around 1.0635 initially. On the other hand, we should note that breaking 1.0635 will stop the expected rise for today and push the price to turn to decline to visit 1.0515 level as a first station.​

 

[Solid ECN]

GBPUSD​

The GBPUSD pair provided new positive trades to test 1.2200 barrier, waiting to get positive motive that assists to push the price to continue the price and achieve our positive targets that start at 1.2260 and extend to 1.2440 after surpassing the previous level.

The EMA50 continues to support the expected bullish wave, which depends on the price stability above 1.2060, as breaking it will put the price under negative pressure that targets testing 1.1940 before any new attempt to rise.​

 

[Solid ECN]

EURUSD​

Euro continues to recover against the dollar at the beginning of this week, after a sharp crash in the last week - that was motivated by the worries around Credit Suisse that put the European banking sector under pressure and heavily penalized the euro.

Daily Time Frame EUR/USD​

• On the daily chart, we can see that the price is once again testing the upper limit of the range, close to 1.0695.​
• This will be a decisive zone for the price to understand the next momentum in the currency pair.​

Dollar Index Daily Time Frame

On the dollar index chart, we can see that the bullish movement slowed down after the price tested the 50 period exponential moving average (EMA).
As long as the price remains below this zone, we should expect the bearish movement to continue over the next few sessions.

• USD index, Daily time frame chart.​
• JPY leads the gains this trading session.​

 

[Solid ECN]

AUDUSD​

Yesterday's trading on Wall Street and in Europe ended higher, making up for losses from earlier in the day initiated by the uncertainty surrounding the takeover of Credit Suisse by UBS. Better sentiment fueled Asian markets today. Stock exchanges in Japan are closed due to a national holiday.​

• AUDUSD pair breaks back below the 0.6700 level. The case for a pause in the rate hike cycle by the RBA at its 4 April meeting has strengthened. According to the RBA minutes released today, the Board agreed to reconsider the case for pausing rate hikes and to closely examine incoming data from the economy.​
• The ECB's Holzmann is softening his previous calls for three consecutive 50 basis point rate hikes.​
• From the US, there was some news affecting the stock market. The US Treasury is looking at unlimited deposit guarantees (via the FDIC) if the banking crisis worsens.​
• On the political front, investors are looking at the Putin-Xi meeting in Moscow, which may bring new threads in the realm of the Ukraine conflict and other geopolitical-economic relations.​
• PIMCO lost $340 million on the redemption of Credit Suisse Bank's AT1 bond. Lawyers from Switzerland, the United States and the United Kingdom are talking to Credit Suisse's AT1 bondholders about possible legal action after up to $17 billion in losses related to the redemption.​
• Goldman Sachs commented on the current state of the equity market this way - "valuations don't look particularly attractive".​
• Bill Ackman, founder and hedge fund manager of Pershing Square Capital commented that the FOMC should consider holding off on rate hikes for tomorrow's Committee decision. Today marks the start of the Fed's two-day meeting in Washington.​
• Citi predicts a 25bp rate hike on Wednesday, and notes that the tone of the press conference will now be particularly important.​
• Citadel and Trafigura traders believe that the turmoil in the banking market is temporary and unlikely to cause far-reaching perturbations in the global economy. Demand for oil should strengthen.​

​

Quotations:​

Futures in Europe point to a bullish opening to the session on the Old Continent. US contracts are also gaining, however the scale of the increases is minimal. On the FX market, the USD is currently performing best. NZD and AUD are the worst performers. Energy commodities are down, extending the wave of uncertainty in the economy. Gold and silver are correcting recent gains and recording slight declines. Bitcoin is currently losing 0.4 per cent and slipping towards $27,800.

The AUDUSD pair is currently trading in a structure bounded by important support and resistance levels. The upcoming FOMC decision and ongoing banking uncertainty could create additional volatility on the pair.​

 

[Solid ECN]

ZEW Sentiment Index Below Expectations​

• 10:00 am GMT - Germany, ZEW sentiment index for March. Actual: 13.0. Forecast: 15.0. Previously: 28,1​
• Current conditions: Actual: -46.5. Forecast: -44.3. Previously: -45.1​
• ZEW says the international financial markets are under strong pressure. Assessment of the earnings development of banks and insurance sector have deteriorated considerably.​

DE30 did not react to the below expectation reading of the ZEW index.​

 

[Solid ECN]

USDCAD​

12:30 am GMT - Canada, CPI inflation report for February. ​

• Headline. Actual: 5.2% YoY. Forecast: 5.4% YoY. Previously: 5.9% YoY​
• MoM. Actual: 0.4%. Forecast: 0.6%. Previously: 0,5%​
• Core. Actual: 4.7% YoY. Forecast: 4.8% YoY. Previously: 5.0% YoY​
• Core MoM. Actual: 0,5%. Previously: 0,3%​

The USDCAD pair gained slightly shortly after Canada's CPI inflation reading.​

 

[Solid ECN]

EURUSD​

US home sales data for February was released at 2:00 pm GMT today and it turned out to be a massive beat. Data came in at 4.58 million, up from 4.00 million in January and significantly above 4.20 million expected by the market. The release trigger an uptick on equity markets with S&P 500 (US500) reaching a fresh daily high near 4,030 pts. USD, on the other hand, was muted with EURUSD barely moving in the first minutes following the release.

US home sales data for February was released at 2:00 pm GMT today and it turned out to be a massive beat. Data came in at 4.58 million, up from 4.00 million in January and significantly above 4.20 million expected by the market. The release trigger an uptick on equity markets with S&P 500 (US500) reaching a fresh daily high near 4,030 pts. USD, on the other hand, was muted with EURUSD barely moving in the first minutes following the release.​

 

[Solid ECN]

GBPUSD​

Inflation Rate in the United Kingdom increased to 10.40% YoYin February from 10.10% in January, above market estimates of 9.9% YoY.

The largest upward contributions came from restaurants and cafes, food, and clothing, partially offset by downward contributions from recreational and cultural goods and services (particularly recording media), and motor fuels. Core CPI rose 6.20% in February over the same month in the previous year, well above analysts' estimates of 5.7%. Fresh data may suggest that the BoE may not necessarily be approaching the end of the tightening cycle. Tomorrow a 25 bp rate hike is expected.

GBPUSD is trading higher today and fresh CPI data provided more fuel for bulls. The currency pair is moving further away from support zone in the 1.2215 area.​