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Currency Pairs Market Analysis

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Economic calendar: Second-tier US data, central bankers' speeches​

  • European indices set for slightly higher opening​
  • Second-tier data from the United States​
  • UK PM Sunak meets EC President von der Leyen to discuss Northern Ireland protocol​
European index futures point to a slightly higher opening of the cash session on the Old Continent today. This comes after a rather downbeat Asian session during which most of the regional indices traded lower.

Economic calendar for the day ahead is light. Traders will be offered some second-tier data from the United States, like durable goods orders or pending home sales. UK Prime Minister Sunak is set for a meeting with EC President von der Leyen to discuss Northern Ireland protocol. UK Deputy PM Raab said that great progress has been made and that the deal is close so GBP may see some moves today if some kind of statement is released after the meeting.

While today's calendar is light, things get more interesting later into the week with the release of February CPI data from Europe, ECB minutes or US ISM indices for February.

1:30 pm GMT - US, durable goods orders for January.​
  • Headline. Expected: -3.9% MoM. Previous: 5.6% MoM​
  • Ex-transport. Expected: 0.1% MoM. Previous: -0.2% MoM​
3:00 pm GMT - US, pending home sales for January. Expected: 0.9% MoM. Previous: 2.5% MoM
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Central bankers' speeches​

  • 9:00 am GMT - BoE Broadbent​
  • 11:00 am GMT - BoE Saporta​
  • 3:30 pm GMT - Fed Jefferson​
  • 3:45 pm GMT - ECB De Cos​
  • 5:00 pm GMT - ECB Lane​

Key reports in the later part of the week
​

Tuesday​

  • China PMIs for February​
  • French CPI for February​
  • Canadian GDP report for Q4​
  • US Conference Board consumer confidence index for February​

Wednesday​

  • Final manufacturing PMIs for February from Europe and the United States​
  • German CPI for February​
  • US ISM manufacturing index for February​

Thursday​

  • Euro area CPI for February​
  • ECB minutes​

Friday​

  • Final services PMIs for February from Europe and the United States
  • US non-manufacturing ISM index for February
​
 

EURUSD - Real estate sales skyrocket in the US​

On Friday, Q4 2022 data on the gross domestic product (GDP) was released: the indicator slowed down by 0.4% compared to the previous period, which was worse than analysts expected –0.2%, while the annual value fell to 0.3% from 0.5% YoY, confirming the negative trend in the economy, which is likely to enter into a recession soon. Today at 12:00 (GMT+2) the data on indexes of business expectations and sentiments in the manufacturing sector will be published, and the indicator of consumer confidence may reach –19.0 points, as well as a month earlier.

For the first time since the beginning of December, the American currency exceeded 105.000 in the USD Index, having started trading this week around 105.200. One of the main factors of positive dynamics was Friday's data on new home sales, which reflected a correction in January by 670.0K after 625.0K earlier against the forecast of a decline to 620.0K.

eurusd_10.png


On the daily chart, the trading instrument continues its corrective movement, having returned to the recent ascending corridor with dynamic boundaries 1.0380–1.0810, and the technical indicators have given a sell signal.

Resistance levels: 1.06, 1.074 | Support levels: 1.048, 1.032​
 
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GBPUSD​

UK Prime Minister Rishi Sunak met at Windsor with European Commission President Ursula von der Leyen today to discuss Brexit. more precisely, to discuss the so-called Northern Ireland protocol. This is one of the final outstanding issues preventing the Brexit chapter from closing. Rishi Sunak is set to deliver a statement on discussions to the UK Chamber of Commons at 6:30 pm GMT. However, there is a lot of confusion around the outcome of talks.

Steve Baker, British Minister of State for Northern Ireland and a Brexit hardliner, asked by reporters as he left Downing Street 10 said that Prime Minister Sunak was at a cusp of securing a fantastic deal. Later, the media reported that Democratic Unionist Party (DUP) of Northern Ireland liked the deal and is ready to accept it soon. However, this optimism was put under question later on when DUP leader Donaldson told reporters that he is neither positive, nor negative on the outcome of talks and that his party will need to take time to analyze the proposal and how it answers DUP's concerns.

gbpusd_5.png


Having said that, there is a lot of uncertainty and the statement from Sunak at 8:30 pm GMT today may be simply an update rather than an announcement. Nevertheless, GBP has traded higher throughout the day and is the best performing G10 currency at press time. Taking a look at GBPUSD chart at D1 interval, we can see that the pair bounced off the support zone marked with 38.2% retracement of the downward move launched in mid-2021. However, it should be said that a bulk of this move was driven by USD weakening following disappointing durable orders data for January at 1:30 pm GMT.​
 
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EURUSD​

EUR appreciated strongly against USD during the European session, however bullish momentum lost its steam in the evening as markets digested fresh comments from ECB's Vujcic.​
  • Markets are right to price in 50 bps for the March meeting.​
  • Rates are about to enter restrictive territory.​
  • Labor markets are likely to remain strong.​
  • We must persevere as long as core inflation remains high.​
  • We must consider both headline and core inflation​
  • Headline inflation is set to fall.​
  • The role of the ECB is not to determine where the terminal rate should be.​
The market is pricing in a 44% chance of 75 bps at the ECB March meeting.

eurusd-1_2.png


EURUSD retreated sharply from session high at 1.0620, erasing a large chunk of today's gains. Nevertheless as long as the pair sits above local support at 1.0580 another upward move may be launched.​
 
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USDCHF Rebounds from the Resistance​

USDCHF pair bounced downwards clearly after testing the bullish channel’s resistance that appears on the chart, to approach the key support 0.9316, noticing that stochastic got rid of its negative momentum to show oversold signals now, while the EMA50 provides positive support to the price.

usdchf_8.png


Therefore, we believe that the chances valid to resume the correctional bullish trend, which targets 0.9475 as a next station, reminding you that the continuation of the bullish wave requires holding above 0.9316.​
 
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EURUSD​

Flash CPI reports for February from France and Spain were released today at 7:45 am GMT and 8:00 am GMT, respectively. Expectations were for a slight acceleration in French headline price growth and a slight slowdown in Spanish price growth. French data turned out to be higher-than-expected and provided some support for EUR while pushing European indices, like DE30, slightly lower. Spanish reading further magnified those moves as it showed price growth accelerating in spite of an expected slowdown.

France​
  • Annual: 6.2% YoY vs 6.1% YoY expected (6.0% YoY previously)​
  • Monthly: +0.9% MoM vs +0.7% MoM expected (+0.4% MoM previously)​

Spain​
  • Annual: 6.1% YoY vs 5.7% YoY expected (5.9% YoY previously)​
  • Monthly: +1.0% MoM vs +0.9% MoM expected (-0.4% MoM previously)​

Those releases offer an important insight but, as far as market reaction is concerned, the best is yet to come. German CPI reading for February, the most closely watched one in Europe, will be released tomorrow at 1:00 pm GMT and is expected to show a slowdown from 8.7 to 8.5% YoY. Release of ECB minutes scheduled for Thursday, 12:30 pm GMT also has a scope to move EUR.

EURUSD

de30_1.png


EURUSD caught a bid following French and Spanish CPI data and retested the 1.06 mark. However, no decisive break higher was made yet.

DE30

eurusd-n_1.png


Equities, including German DE30, took after today's CPI data. DE30 is making a test of the lower limit of the ongoing short-term trading range in the 15,300 pts area.​
 
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AUDCAD​

The AUDCAD pair ended the correctional bearish rebound by testing the key support 0.9105, to form solid obstacle against the negative trades, noticing the activation of the bullish track by reaching 0.9200.

audcad_1.png


Note that the frequent consolidation above the EMA50 and stochastic attempt to provide the positive momentum allow us to keep the bullish overview, to expect targeting 0.9240 followed by attempting to press on the initial barrier at 0.9310 in order to find a way to resume the bullish trades.​
 
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AUDCAD​

The AUDCAD pair ended the correctional bearish rebound by testing the key support 0.9105, to form solid obstacle against the negative trades, noticing the activation of the bullish track by reaching 0.9200.

audcad_1.png


Note that the frequent consolidation above the EMA50 and stochastic attempt to provide the positive momentum allow us to keep the bullish overview, to expect targeting 0.9240 followed by attempting to press on the initial barrier at 0.9310 in order to find a way to resume the bullish trades.​
 
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NZDUSD​

The NZDUSD pair rallied upwards to breach the bearish channel’s resistance and head towards testing the most important resistance at 0.6290, and we prefer to stay aside until the price confirms its situation according to this level, as continuing the rise and breaching it will push the price to achieve additional gains that start by visiting 0.6385 areas, while consolidating below it will press on the price to resume the correctional bearish wave that its targets begin by testing 0.6140.

nzdusd_6.png


The expected trading range for today is between 0.6180 support and 0.6280 resistance.​
 
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EURGBP​

Euro kicked off March on a strong note as fresh preliminary inflation data from France and Spain showed price pressures accelerated last month. Also inflation in North-Rhine Westphalia, the most densely populated part of Germany, also increased. Markets price in ECB to lift rates by another 50bps in March, while the peak rate for the deposit facility is projected to reach 4% in February of 2024, above the 3.9% seen in late February.

On the other hand, the British pound is one of the worst performing G10 currencies today as fresh comments from BoE Governor Bailey overshadowed optimism over Britain's agreement with the EU on post-Brexit trade regarding Northern Ireland. Bailey said further rate hikes may be appropriate but nothing is decided as inflation has been slightly weaker, and activity and wages slightly stronger. It seems that his indecisiveness was perceived well by the markets.

eurgbp-1.png


EUR and NZD are the best performing major currencies while GBP and USD lag the most.

eurgbp-2.png


EURGBP rose sharply at the beginning of today's session, however buyers struggle to reach major resistance at 0.8875, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in December 2022. As long as price sits below, pullback towards local support at 0.8815. cannot be ruled out.​
 
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EURCHF​

The EURCHF pair took advantage of the stability of the additional support at 0.9860 to push it above the EMA50, achieving clear gains by reaching 1.0032, these factors confirm surrendering to the domination of the bullish bias, noting that stochastic positive momentum signals will assist to resume the bullish rally, to expect targeting 1.0080 followed by pressing on the additional barrier at 1.0145 as a next target for the bullish bias.

eurchf_1.png


The expected trading range for today is between 0.9975 and 1.0080.​
 
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EURUSD​

The EURUSD pair show more bearish bias to settle below 1.0650 again, reinforcing the expectations of continuing the bearish trend for the rest of the day, waiting to break 1.0625 to reinforce the expectations of continuing the bearish bias, motivated by the negative overlapping signal provided by stochastic now, reminding you that our main waited target is located at 1.0515, while achieving it requires holding below 1.0650.

eurusd_11.png


The expected trading range for today is between 1.0560 support and 1.0720 resistance.​
 

USDJPY​

The USDJPY pair leaned on the bullish channel’s support line and bounced bullishly from there, as the EMA50 meets this support to add more strength to it, to resume the correctional bullish track, and the way is open to achieve our next target at 137.70. Stochastic loses its positive momentum clearly now, which might cause additional sideways trades before resuming the expected bullish bias.

usdjpy_7.png


Holding above 135.65 is important to continue the expected rise, as breaking it will put the price under intraday negative pressure to head towards visiting 133.30 before any new attempt to rise.​
 
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GBPCHF​

The GBPCHF pair ended the correctional bullish rebound by providing new negative close below 1.1415 resistance, to notice crawling below the moving average 55 and consolidate near 1.1255, also, stochastic begins to provide the negative momentum to increase the efficiency of the bearish track, to keep waiting to touch the negative stations near 1.1180 followed by reaching the additional support at 1.1100.

gbpchf_1.png


The expected trading range for today is between 1.1310 and 1.1180.​
 
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