Summary:
- FX currencies traded mixed with the euro and USD showing a V-shape pattern on the day which indicated the market was still digesting the U.S. NFP release last Friday.
- We should pay close attention to the U.S. February CPI and its core measure today.
The FX currencies traded mixed on Monday 12 March with the euro and USD showing a V-shape pattern on the day which indicated the market was still digesting the U.S. NFP release last Friday. The British pound broke above the key 1.39 handle on the news that Britain was very close to agreeing the details of an implementation period with the European Union while the Japanese yen rose in a choppy way amid a political scandal involving the sale of state-owned land. In addition, the Aussie dollar rose thanks to the country was exempted from Trump’s tariff plan. We should pay close attention to the U.S. February CPI and its core measure today.
Technical
The dollar index (DXY) fell back below its H4-period long term moving averages again after a rally within an overall pennant pattern. Look at a potential consolidation around its long term moving averages going forward. The US CPI data on Tuesday and retail sales on Wednesday may add some volatility into the dollar.
Turning to non-USD currencies now, the euro declined before it rose on Monday. Look for a potential transformation in the trend on the 1 hour chart. The British pound upside momentum seemed to wane although the sterling cleared the 1.39 handle. Look at a potential resumption of the uptrend after a short-term corrective decline. The Aussie dollar was going higher in a choppy way and came close to our expected major levels. Watch for a potential reacting off resistance.
Switching gears to the precious metals, the gold traded in a wide range. A failure to create a new low in London session suggested a potential change in the downtrend on the 1 hour chart. The continued rally which helped the price print a new intra-day high in New York session saw no follow-through early this morning and the price turned lower again. Therefore, the yellow metal evolved in a range and we should sit tight for dictations from the US inflation data.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.