Thu, Mar 23, 2023 @ 01:50 GMT
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Daily Technical Analysis


Wednesday’s expectations for low volatility ahead of the Fed’s decision were realised. The Euro moved steadily higher around the opening of the European session, reaching its key level of 1.0170, but quickly corrected the hard-earned pips. This attack by the bears managed to bring the euro back to around 1.0110. Everyone was waiting for the Federal Reserve’s decision and when traders saw confirmation of the U.S. interest rate hike to 2.50%, followed four hours of high volatility with the same highs and lows within those hours. The 1.0170 resistance was breached and the pair managed to reach 1.0217 by the end of the day. At 12:30 GMT today, the U.S. GDP data is also expected to move the market. If the dollar continues to weaken, then the next resistance at 1.0270 can be reached, but not before the one at 1.0217 is breached. The first support is the level at 1.0168.


Today the USD/JPY extended its recovery from the 135.56 low, reached on Friday. The NInja slowly moved higher, managing to reach 137.46 – a key level that proved to be quite strong throughout the whole month. A correction started again even before the data came out, but the pair found a bottom around the level at 136.30. There, the bulls started to open new positions and brought the Ninja back to 137.46, but the bears prevailed once more and for the second time pushed the pair to the same bottom, where the day ended. The pair will also be influenced by the dollar strength around the U.S. GDP data at 12:30 GMT. The corrective move is expected to continue as the USD/JPY may return to 135.56 where it was at the end of last week, but if the data is positive for the dollar, the bulls will most likely gain momentum.


At the start of the London session, we saw a slight rise in GBP/USD, but the key level of 1.2085 managed to restrain the bulls before the Fed decision. The 75 bps hike led to four extremely volatile hours due to the fact that the market found Powel’s comments to have a more dovish tone. As a result, the dollar started to shed from its value and the aforementioned resistance was breached. There will be no specific data for the pound today, but at 12:30 GMT the U.S. Bureau of Economic Analysis will publish GDP data. If the decline of the dollar continues, we may see a new weekly high, but if the data stimulates traders to buy the dollar, then we may see a corrective move towards 1.2056.


On Wednesday, the German index continued to move in its narrow range. All eyes appeared to be on the U.S. stock market and the Fed decision as liquidity was lower than usual. As the European session opened, we saw a slow decline to the 13095 support, which once again played its part and helped the index start a rally back to the upper end of its range. Today, the preliminary data on inflation in Germany is expected to be published. If the numbers appeal to traders, we could see a break of 13258 and a new weekly high, but if gas issues in Europe prove to be a problem for the German economy, we could see a negative reaction and the lower end of the range breached in search of a new bottom.


No one seemed to want to rush their positions before they were certain of the Federal Reserve decision on Wednesday. Throughout the day trading remained uneventful, but when we saw confirmation that the key interest rate will be hiked to 2.50% and heard Powel’s dovish comments, we saw a break of the front resistance at 32050. This allowed the bulls to push the price even higher and to reach a new monthly high of 32341. However, the US30 failed to continue rising or hold the levels and the index ended the day at around the current levels. Today, U.S. GDP data will be released at 12:30 GMT , and the moves we may see could lift the US30 even higher, if the data is positive. But if traders are disappointed, we may see the bottom of its weekly range – 31800, reached again.

DeltaStock Inc.
DeltaStock Inc.
These analyses are for information purposes only. They DO NOT post a BUY or SELL recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Delta Stock’s Analyst Dept. also takes into consideration a number of fundamental and macroeconomic factors, which we believe impact the price moves of the observed instruments. Delta Stock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Delta Stock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to change without notice.

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