Despite the Trump-Kim meeting taking the spotlight, it seems to have little effect on the USD until now. On the contrary the greenback showed signs of weakness after Fed Chairman Jerome Powell repeated the bank’s intention to remain to patient on its monetary policy. It should be noted though that a correction started to take place in the Asian session today. Jerome Powell stated in his testimony before the US Senate that rising risks and recent soft data are not expected to threaten a solid growth for the US economy, but the Fed prefers to remain patient. Despite the Fed Chair not offering anything new, the reiteration alone of the Fed’s intention to remain patient once again, seems to weigh on the USD. We could see the second part of Powell’s testimony today, before the House of Representatives, also to weigh on the USD, albeit at a lesser extent, unless some fresh insights are presented. EUR/USD rose yesterday, testing the 1.1385 (R1) resistance line, though failed to clearly break it. We could see the pair maintaining a sideways movement, yet should the USD start weakening once again, we could see it breaking the 1.1385 (R1) resistance line and aim for the 1.1420 (R2) resistance level as the bulls would be taking over again. Should on the other hand the bears dictate the pair’s direction we could see it aiming if not breaking the 1.1345 (S1) support line.
GBP rallies on no deal Brexit avoidance
The sterling rallied against the EUR and the USD yesterday, reaching new highs as no deal Brexit seems to be avoided. UK’s PM Theresa May, offered lawmakers the chance to vote on delaying Brexit, hence strengthening the pound. Media reported that Theresa May, stated to lawmakers that they could vote on the 14th of March for a “short, limited extension”, should her Brexit deal be rejected on the 12th . Today the UK Parliament is to vote once again on Brexit, on a motion set by the government, yet the interest relies on the amendments which could be tabled. We expect volatility for the pound to be maintained until the voting by the UK Parliament and its outcome could drive the pound to either direction. Cable rallied yesterday reaching a new high, since September last year by testing the 1.3270 (R1) resistance line. We could see the pair remaining in a bearish market as technically the upward trendline, incepted since Friday remains intact. Should the pair find fresh buying orders along its path, we could see it breaking the 1.3270 (R1) resistance line and aim for the 1.3360 (R2) resistance hurdle. On the other hand, should cable come under the selling interest of the market, we could see it breaking the 1.3175 (S1) support line and aim for lower grounds.
Today’s other economic highlights
During the European session today, we get the final reading of Eurozone’s Consumer Confidence indicator for February. In the American session, we get from the US the goods trade balance for December, the factory orders growth rate also for December and the EIA crude oil inventories figure. The star of the day though should be Canada’s inflation rates, which under certain circumstances could weaken the Loonie. Please note that ECB’s Benoit Coeure and BuBa president Jens Weidman will be speaking today and do not forget that Fed’s Chair Jerome Powell is to testify before the US House of Representatives today.
GBP/USD
Support: 1.3175 (S1), 1.3070 (S2), 1.2960 (S3)
Resistance: 1.3270 (R1), 1.3360 (R2), 1.3445 (R3)
EUR/USD H4
Support: 1.1345 (S1), 1.1300 (S2), 1.1260 (S3)
Resistance: 1.1385 (R1), 1.1420 (R2), 1.1460 (R3)
