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The Euro stands at the back foot on Wednesday and hit session low at 1.2383, just above key support – top of thick daily cloud.

Weaker than expected EU data on Tuesday and fresh strength of the greenback on easing fears about trade war, weighed on the single currency, which ended Tuesday’s trading in red.

Fresh weakness off Tuesday’s new high at 1.2472 was so far held by 1.2386 support (Fibo 38.2% of 1.2241/1.2476 upleg) which guards strong cloud top support.

The pair needs to hold above daily cloud to keep overall bulls intact. Fresh bullish momentum is building on daily chart and supporting scenario.

Conversely, penetration of daily cloud would delay bulls for deeper pullback which could extend towards a cluster of daily MA’s at at 1.2340/30 zone, which mark next key supports.

Today’s calendar shows no significant releases from the Eurozone and focus will turn towards US GDP and housing data, due later today.

The US economy is expected to grow in Q4 according to the forecast at 2.7% vs 2.5% in Q3, while pending home sales are expected to rise by 2.1% in Feb after falling by 4.7% previous months.

Upbeat numbers from US releases today could be supportive for the greenback.

Res: 1.2421, 1.2446, 1.2461, 1.2476
Sup: 1.2370, 1.2358, 1.2330, 1.2305

The US Dollar has been constrained by a junior ascending channel against the Swiss Franc. The pair bounced off the lower boundary of its channel on February 16 and has since maintained the ascending pattern.

The exchange rate has been trading within the range of a resistance cluster set by the 55-hour simple moving average and the weekly pivot point and a support which is the weekly S1.

If the USD/CHF currency pair moves past the resistance cluster at 0.9497, the nearest target could be the upper boundary of a medium-term triangle where the monthly R1 is located.

The common European currency has been trading in an ascending channel against the Canadian Dollar after it hit the lower boundary of a three-month junior channel.

The currency pair has breached a resistance cluster set by the combination of the weekly, the monthly PPs and the 100-hour simple moving average near 1.5961.

The overall market sentiment is bullish and it is likely to continue for the following trading sessions until it breaches the upper boundary of a dominant channel. In addition, Technical indicators suggest that the bears could continue to grow stronger through the following week.

The Greenback weakened against the Euro, following the US CB consumer confidence report released on Tuesday. The EUR/USD currency pair gained five pips, or 0.04%, in the first five minutes after the release, to continue fluctuating in the 1.2407 area.

The Conference Board revealed weaker consumer confidence, but that was not enough to cause a significant move in the observed currency pair. The United States CB reported a positive result of 127.7 points, still below expectations, following a downwardly revised data in the previous period. March's figure reflected the fewer amount of responses showing expectations for higher incomes, better business conditions and more available positions in the following six months.

Monday's climb of EUR/USD was reversed yesterday, as the market responded negatively to ECB officials who stressed the importance of patience when removing the stimulus. As a result, the Euro reversed from its six-week high of 1.2468 and plunged 79 pips within a couple of hours.

This fall was stopped by the 55-hour SMA which remained the guiding force for the pair in the Asian session, as well. Some bullish pressure was likewise added by missed confidence estimates in the US.

The 1.2385 mark has previously managed to form strong resistance/support, thus it is unlikely that 1.2380, reinforced by the 100-hour SMA, is breached during the first part of the day.

The upside potential is up to the weekly R2 at 1.2480. Volatility is likely to be introduced by the US Final GDP to be released at 1230GMT.

Contrary to the slight period of consolidation which began mid-Monday, the GBP/USD exchange rate was shaken by a strong sell-off during the following session. The pair plunged 1.04% in six hours just to be followed by another surge towards the 1.42 area.

Given that the Pound is once again located above the 55– and 100-hour SMAs, it seems that this currency could once again be set for a surge towards the 1.4313 mark—its highest position since the Brexit vote. Thus, the pair is likely to edge higher during the following hours. The monthly and weekly R1s near 1.4260, however, might hinder or even halt the pair in the same manner as on Monday.

Meanwhile, the US is to release its final GDP figures at 1230GMT. In case of bearish pressure, 1.41 is unlikely to be breached.

The US Dollar's movement against the Yen was bounded between the 100– and 200-hour SMAs on Tuesday. Some additional volatility was introduced during the second half of the day; however, the pair lacked enough force to dash through any of these two barriers.

The pair is trading near a medium-term channel located at 105.80. It is expected that this pattern is eventually breached to the upside, thus paving the way for a surge during the following weeks.

In the short term, it is likely that the pair continues trading within the same range until the US GDP data release at 1230GMT provides the necessary momentum for a breakout.

Technical indicators favour bearish correction in this session. Apart from the 105.40 area, no additional support levels are restricting the pair until its 2017/2018 low of 104.67.

XAU/USD did not introduce any surprises during Tuesday's trading session. The pair bounced off the upper boundary of a three-month channel and the monthly R1 near 1,355.00 prior to breaching the short-term channel and the 55-hour SMA.

Gold managed to recover some of the losses during the Asian session, but nevertheless remained supported by the 100-hour SMA.

Some downside potential still exists in the market. Thus, the yellow metal might still target the 23.60% Fibo retracement at 1,335.00. However, it is likely that the current bearish momentum does not prevail long in the market, thus allowing bulls to take control soon.

In terms of upside potential, the aforementioned channel line should be strong enough to prevent further advances.

Stock markets are likely to remain explosively volatile and wildly unpredictable amid the ongoing trade drama between the US and China.

The fact that global equities roared back to life on Monday only to surrender gains yesterday, continues to highlight how extremely skittish the market is currently. While easing fears of a trade war initially supported risk sentiment, reports that the Trump administration may crackdown on Chinese investments into US companies rekindled jitters. With the US-China trade developments being a key theme driving markets, investors should expect the unexpected.

Asian stock markets were under pressure during early trading, following a steep tech-driven selloff on Wall Street overnight. The negative domino effect from Asia could weigh on European shares this morning. If investors adopt a guarded approach today and caution prevails, Wall Street is at risk of extended losses this afternoon.

Dollar flat ahead of final Q4 GDP estimate

The Dollar struggled for direction against a basket of major currencies on Wednesday morning, as global trade tensions continued to weigh on sentiment.

This has certainly been a painful trading month for the Greenback, as the awful combination of US political uncertainty and trade war fears punished the currency. The “dot plot” disappointment from March’s FOMC meeting which poured cold water on four rate hikes this year, simply compounded the Dollar’s woes. Bulls are pleading for a lifeline and this could come in the form of the final US Q4 GDP estimates released this afternoon. Markets are expecting to see a revised GDP estimate of 2.7% for the final quarter of 2017. A figure that meets or exceeds market expectations has the ability to support the Dollar.

Taking a look at the technical picture, the Dollar Index is under pressure on the daily charts. Prices are trading below the 20 SMA, while the lagging MACD has crossed to the downside. A breakdown and daily close below 89.00 could invite a decline lower towards 88.60 and 88.30.

Commodity spotlight – Gold

Gold was exposed to heavy losses on Tuesday amid a stabilizing US Dollar.

Easing concerns about US-China trade tensions complimented the downside with prices dipping towards $1340. While an appreciating Dollar could result in further pain for Gold in the short term, the yellow metal remains supported by increasing geopolitical tensions, stock market volatility and lingering trade war concerns.

Focusing on the technical picture, the yellow metal remains somewhat supported above the $1340 level. Previous resistance around $1340 could transform into a dynamic support that encourages an incline back towards $1355 and $1360, respectively. Alternatively, a failure for bulls to defend $1340 could result in a decline back to $1330 and $1326, respectively.

XAUUSD (1345.08): Gold prices fell sharply on the day and erased the gains from Monday with the daily candlestick closing with a bearish engulfing pattern. This could potentially suggest some near term declines in price. The failure to clear the 1345 handle could push gold prices lower to test the 1336 level of support initially followed by a decline toward the 1328 region.