Weekly Technical Analysis For March 19th to 23rd, 2018
EUR/USD: At the beginning of last week, the dollar was under pressure owing to news that US President Donald Trump had fired Secretary of State Rex Tillerson, replacing him with CIA Director Mike Pompeo. Also, US inflation rose as expected on last Tuesday. The Labor Department said its consumer price index increased 0.2% in February and on a year-on-year basis, the CPI rose 2.2%. But core inflation is still below the Fed’s target rate of 2%.
In contrast with the negative news for the US dollar, the EUR/USD pair showed a bearish action and dropped below the main level of 1.2314.
It's decision time for the Fed in the upcoming week. This is the first Federal Reserve policy meeting with Jerome Powell as chair. The markets appear to have already priced in a 25 basis points interest rate. The target of 1.75 – 1.50%; which has been so expected. Also, the press conference will be important to follow in order to learn what the Fed plans for rest of 2018. Last month, Powell said a fourth rate hike could be on the cards in 2018. If the Federal Reserve projects a more aggressive interest rate hike outlook, the greenback would rise sharply.
Additionally, we will focus on the G20 summit in Buenos Aires on Monday. The world’s twenty largest economies are set to meet about a range of global economic issues including regulation of cryptocurrencies.
The EUR/USD pair closed last week below the daily level of 1.2314. As long as the price remains below 1.2314, the bearish action may gain more momentum, and we will see support levels at 1.2232 and 1.2171. On the other hand, if the pair goes beyond 1.2314, the resistance level will hold at 1.2384.
Support: 1.2232 - 1.2171 - 1.2052
Resistance: 1.2314 - 1.2384 - 1.2465
GBP/USD: The BoE will publish its rate decision on Thursday and Governor Mark Carney will speak at the press conference after the announcement. No change is expected, However, a surprising revision would lead to a volatility in GBP/USD.
Also, watch out for the UK Consumer Price Inflation for February. Analysts expect annual CPI to ease to 2.8% from January's nearly six-year high of 3.0%. The inflation report will be significant for the possibility of a rate hike in the BoE's May meeting.
The rise was limited to the 1.3999 key resistance level last week and then the GBP/USD pair pulled back. If the downward movement continues, we will see the daily support level of 1.3880. However, as long as the price stays above 1.3880, on a daily basis, the fall may be limited. On the other hand, if the price rises we will see 1.3999 and 1.4130 as resistance levels
Support: 1.3880 - 1.3745 - 1.3651
Resistance: 1.3999 - 1.4130 - 1.4130
USD/JPY: We will follow the Japan National CPI inflation in the upcoming week. The consensus estimate for core inflation in February is a rise to 1.0%, from 0.9% y/y while any pickup in headline inflation will support the yen.
The USD/JPY currency moved down below the major level of 106.46. As long as the price stays below 106.46, on a daily basis, the selling pressure will most likely dominate and we will follow 105.04 and 103.76 as support levels. On the other hand, if the price rises above 106.46, the next resistance level is given at 107.65.
Support: 105.04 - 103.76 - 102.62
Resistance : 106.46 - 107.65 - 108.78
GOLD: The Gold price found sellers from the 1330 key resistance level and showed a downward movement last week. In the event that the fall continues, we will face 1307 as a daily support level. Although, as long as the price stays above 1307, on a daily basis, the bearish action may be limited. On the other hand, if the price shows an upward movement, the resistance level can be found again at 1319 and 1330.
Support: 1307 - 1291 - 1283
Resistance: 1319 - 1330 - 1352
CRUDE OIL: The price of crude rose significantly last Friday closing the week above the 61.89 key level. If the rise continues, we will watch 62.72 and 63.54 as resistance levels. On the other hand, if the price drops below 61.89, the next daily support level will be at 61.22.
Support: 61.89 - 61.22 - 60.55
Resistance: 62.72 - 63.54 - 64.38