Sample Category Title

NZDUSD plunged by 1.5% and straight to a two-week low of 0.6792 early on Wednesday after an attempt to reach resistance around its previous peak of 0.6940. The October uptrend line drawn from the 32-month low of 0.6423 seems to be acting as support once again, though, the risk remains on the downside as the MACD is ready to drop under its red signal line. The RSI is also in bearish territory below 50 and is clearly pointing down but it is also approaching a familiar support area around 40.50 – the indicator reversed at this point twice this year – where another rebound may reduce chances for more price declines.

If the market corrects higher, the bullish action may pause initially near 0.6870 before attention shifts to 0.6940 which overlaps with the 50% Fibonacci of the long downleg from 0.7436 to 0.6423. A rally on top of the latter and more importantly above the December high of 0.6968 would probably stage fresh buying pressure, with the price moving next to the 0.7050-0.7100 restrictive area.

On the other hand, violating the uptrend line, could see losses extending towards the 200-day moving average (MA) currently at 0.6732, which is flattening. Even lower, the bears could stall around 0.6650 where the December sell-off stopped.

In the medium-term picture, NZDUSD would resume upside trend above 0.6968, while a dive below 0.6650 would bring the bearish outlook back into play. It is also worth noting that the 50-day MA keeps distancing itself above the 200-day MA, raising optimism for a bull market.

EURJPY is trading slightly lower in the 4-hour chart on Wednesday after finding resistance at the 125.00 psychological level, which is currently near the upper Bollinger Band. Moreover, the pair is trading below the 20- and 40-simple moving averages (SMAs), while the RSI and the MACD are marginally declining in the negative area, suggesting a bearish picture for the short term after the free-fall from the 126.15 barrier on March 22.

If the market continues the bearish movement in the near term, the pair could touch the 38.2% Fibonacci retracement level of the upleg from 118.57 to 127.50, around 124.10, and the lower Bollinger band ahead of the 123.85 support area. In case of a lower extension, the price could challenge the 123.40 hurdle and the 50.0% Fibonacci of 123.03.

In the alternative scenario, if the market pushes the pair higher, the price could rest near the immediate resistance of 125.00. More advances could also meet the 40-SMA, which overlaps with the 23.6% Fibonacci of 125.37. An aggressive run above this line could open the door for the 126.15 key level.

Note that in the longer timeframe, the price remains in a bearish structure following the pullback on 133.10, but in the short term, only an advance above the two-and-a-half-month high of 127.50 could bring the bullish outlook back into play.

• Dollar firmer despite weak US data as Treasury rally eases
• New Zealand dollar nosedives after RBNZ says rate cut more likely than a hike
• Pound choppy ahead of crucial indicative votes on Brexit in Parliament

Steadier Treasury yields help dollar regain some footing

The US dollar edged higher against a basket of currencies on Wednesday, extending Tuesday’s gains, as steadier Treasury yields alleviated the recent selling pressure, especially against the yen. The dollar index rose to a 2-week high of 96.98, but versus the yen, it was flat around 110.60 having rallied sharply yesterday.

However, market fears of a possible US recession remain heightened despite the easing of the rally in US Treasuries as the yield curve between 10-year and 3-month notes is still inverted. An inversion of the yield curve between 10-year and 3-month notes has accurately predicted a recession in the past. Data out of the US yesterday added to investors’ concerns that the American economy is slowing. Housing starts plunged by 8.7% month-on-month in February, while the consumer confidence index missed forecasts by a wide margin to fall to 124.1 in March.

Nevertheless, with the growth outlook even gloomier elsewhere in the world, the dollar remains well bid and there was additional support from a strong performance on Wall Street on Tuesday.

Pound moves sideways as indicative votes awaited; euro subdued

The British pound continued to hover around $1.32 in a choppy sideways range as traders hoped that the indicative votes due to take place in Parliament later today would provide some much-needed clarity on the next steps in the Brexit process. Lawmakers will vote at 1900 GMT on a number of possible Brexit scenarios, including a customs union, revoking Article 50 and May’s deal, in a bid to find a majority in Parliament for a way forward. However, a clear outcome is not likely today and voting is expected to continue over several days into next week until a preferred option is found.

But even as the chances of a softer Brexit rise, there appeared to be a change of tone from some key Eurosceptics in Theresa May’s party, signalling they may be ready to back May’s unpopular deal in order to prevent less favourable outcomes such as closer ties to Europe or even a cancellation of Brexit. The pound briefly spiked higher yesterday on speculation that May’s deal is not dead just yet.

The euro, meanwhile, resumed its slide versus the greenback, hitting a two-week low $1.1245, but managed to steady after ECB chief, Mario Draghi, sounded a little more upbeat about the Eurozone economy than in earlier remarks. Speaking in Frankfurt on Wednesday, Draghi said the domestic economy has remained “relatively resilient” even though downside risks to the outlook have increased.

Kiwi slumps after RBNZ surprises dovish shift

The Reserve Bank of New Zealand kept interest rates unchanged at 1.75% at the end of its policy meeting on Wednesday but said “the more likely direction of our next OCR move is down”. The increase in the dovish bias led investors to price in a 25-basis point rate cut before the year end, pulling the local dollar to 2-week lows. The kiwi dipped below the $0.68 level before recovering slightly above it but was still down by 1.4% on the day.

The Australian dollar also came under pressure as the RBNZ’s change in tone increased expectations that the RBA will follow suit with a more dovish stance. The aussie was last trading down 0.4% at $0.7104.

Looking at equities, major indices were mixed in Europe and Asia, while in commodities, both gold and oil eased from recent highs. Oil prices came close to hitting fresh 2019 highs on Tuesday amid tightening supply. Gold fell back below the $1320 level as the dollar and Treasury yields recovered slightly.

Trade talks to come back into focus

With the US economic calendar looking relatively light over the next couple of days, the markets’ attention will turn back onto trade talks between the US and China. The US trade delegation will travel to Beijing tomorrow for a new round of negotiations as hopes remain high that the two sides are moving closer to reaching a trade agreement. With fears of a global recession running high, any setback in the trade talks could have major repercussions on risk sentiment.

Fed speakers will also be watched in the coming days. Kansas Fed President Esther George is due to give a speech at 21:30 GMT.

British Prime Minister Theresa May aims for a last-minute support on her Brexit deal in Parliament on Wednesday night. Various reports indicate some new optimism on the matter as it seems some Eurosceptic lawmakers could back Mays plan eventually. However, the Northern Irish powerbrokers were unwilling to change their mind. The UK is already in a very difficult position and the threat of a long delay, a no Brexit deal or a new referendum raise threats and further uncertainty, so May's plan could be the best way to leave the EU. Also, on Wednesday the Parliament will hold vote on various Brexit scenarios. (Indicative votes). The votes could point out there is no majority in parliament for a substitute course of action, or else a majority for numerous. May has warned that these votes could be of no use as the EU is not willing to renegotiate modifications on the deal. Caution is advised as the GBP could come under strong volatility throughout the day. The GBP moved in sideways movement on Tuesday between the 1.3265 (R1) resistance line and the 1.3175 (S1) support line. Especially during the European afternoon, we expect the GBP to come strong volatility as noted above. In a bullish run we could see the pair moving above the 1.3265 (R1) resistance line and aim for the (R2) 1.3350 resistance barrier. In the opposite direction we could see cable dropping below the 1.3175 support level and aiming for the 1.3070 support barrier.

USD regains strength after bond yields correct

US indexes and equities along with the greenback gained support on Tuesday as the market observed the US Treasury yields stabilizing above 15-month lows. Meanwhile, Apple Inc. stocks dropped by 1% after a U.S. trade judge found some iPhone's had breached intellectual property rights of another US company called Qualcomm. However the ruling was then rejected as the ITC found the matter should be further investigated. The two US firms have been in a legal dispute in which Apple has accused Qualcomm of unjust intellectual property rights. Qualcomm from its side has accused Apple of violating these rights. Furthermore, the USD could come under pressure today as the economic indicator could have influence on the currency as well as any news on the US Sino front. Energy stocks were seen advancing as Oil prices displayed an upward momentum due to Russia's confirmation sticking to production cuts and expectations of weekly production deficit reading by the EIA. Oil prices surged yesterday reaching a high of 60 USD per barrel forming a strong resistance at that level. If the commodity comes under buying interest we could see Crude Oil heading for the (R2) 61.55 resistance line while even higher is the (R3) 63.12 resistance barrier. On the short side, if the commodity is to drop it could aim for the (S1) 58.49 support level and aiming even lower for the (S2) 56.52 support level.

Other economic highlights, today and early tomorrow

In today's early US session, we get the US Trade Balance for January while at the same time we get Canadas Trade Balance for January. Also in the American session we get the EIA weekly crude oil inventories figure. As for speakers, please note that ECB's President Mario Draghi, Ewald Nowotny, Peter Praet, Luis De Guindos , Yves Mersch (08:00,GMT), , Sabine Lautenschlaeger will be speaking throughout the day as indicated below in the calendar.

Crude Oil H4

Support: 58.49 (S1), 56.52 (S2), 54.82 (S3)
Resistance: 60.30 (R1), 61.55 (R2), 63.12 (R3)

GBP/USD H4

Support: 1.3175 (S1), 1.3070 (S2), 1.2970 (S3)
Resistance: 1.3265 (R1), 1.3350 (R2), 1.3450 (R3)

The US dollar strengthened against a basket of major currencies despite weak economic statistics. Thus, the number of building permits decreased to 1,296M in February, while experts forecasted 1,320M. CB consumer confidence index fell to 124.1 in March instead of the expected value of 132.0. The dollar index (#DX) updated weekly highs and closed the trading session in the positive zone (+0.25%).

Today, during the Asian session, the New Zealand dollar has been collapsed after the RBNZ meeting. The regulator decided on the key interest rate and left it unchanged at 1.75%. The Central Bank announced that in the near future it was ready to consider the issue of lowering interest rates.

Financial market participants are still interested in Brexit. It should be recalled that on Monday, parliamentarians voted to take control of the Brexit process instead of Theresa May. Today, a meeting of the Parliament should be held, at which officials will vote for various options for the country's exit from the block. Parliament will consider an option of "softer" Brexit, its delay or even its cancellation. However, it is still unclear which option the majority will vote for. It became known that Parliament considered the draft of Theresa May's deal as the best alternative to the "hard" scenario or the rejection of Brexit.

The "black gold" prices are maintaining current levels. At the moment, futures for the WTI crude oil are testing the mark of $59.85 per barrel. At 16:30 (GMT+2:00), a report on crude oil inventories will be published in the US.

Market Indicators

• Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.75%), #DIA (+0.54%), #QQQ (+0.47%).
• The 10-year US government bonds yield is declining. Currently, the indicator is at the level of 2.39-2.40%.

The news feed on 27.03.2019:

• Today, the publication of important economic data is not expected. We recommend paying attention to the statistics on the US trade balance at 14:30 (GMT+2:00).

EUR/USD

Current level - 1.1255

The pair reached a local low at 1.1250 and my outlook is already counter-trend, for a rise through 1.1330, en route to 1.1450.

USD/JPY

Current level - 110.52

Although there is an intraday risk of a brief spike to 111.00 area, he latter should cap the upside, for a new leg downwards, to 108.90.

GBP/USD

Current level - 1.3178

The struggle above 1.3150 continues and while the mentioned support remains intact, the outlook will be positive, for a rise towards 1.3300, en route to 1.3450.

During Tuesday's trading session, the European Single Currency depreciated against the US Dollar to pass through the small pattern line to the 1.1240 level as it was predicted! On Wednesday morning, the rate was located above the monthly S1 at the 1.1267 mark.

In regards to the near-term future, most likely, the currency exchange rate will trade sideways towards the monthly S1 at the 1.1240 mark. Moreover, the rate might pass through the support levels of the S1's towards the 61.80% Fibonacci retracement level at the 1.1203 mark.

On the other hand, the monthly S1 at the 1.1240 mark could retrace the rate to push it towards the upper boundary of the freshly drawn pattern line at 1.1260.

During Tuesday's trading session, the British Pound depreciated against the US Dollar to pass through 200-hour simple moving average. During Wednesday's midnight hours, the rate kept depreciating to trade at the 1.3188 mark.

In regards to the near-term future, most likely, the British Pound will appreciate against the US Dollar to break the resistance levels of the 55-hour and the 200-hour simple moving averages. It is expected that the rate might end the day at the 1.3250 level.

On the other hand, the resistance level of the 200-hour simple moving average could retrace the rate to push it to pass the weekly PP at 1.3276.

During Tuesday's trading session, the currency exchange rate was supported by the weekly pivot point to end the trading session at 110.50. On Wednesday morning, the rate was located above the monthly pivot point at the 110.64 mark.

In regards to the near-term future, most likely, the trade will be trading sideways to stay between the 61.80% Fibo at the 110.77 mark and the monthly pivot point at the 110.53 mark.

However, the resistance levels of the 61.80% Fibo and the 200-hour simple moving average could retrace the US Dollar to depreciate against the Japanese Yen to the 110.40 level.

During Tuesday's trading session, the yellow metal traded between the 55-hour and the 100-hour simple moving averages to break the medium pattern line at 1,316.00. On Wednesday morning, gold was located above the medium pattern line at the 1,316.86 mark.

In regards to the near-term future, most likely, the 100-hour simple moving average will support the rate to help the rate to surge towards the monthly pivot point at the 1,321.03 mark.

Besides, It is expected that the yellow metal will end the trading day at the 1,318.00 level.