In this article, we have covered the highlights of global market news about the EUR/USD, NZD/USD, USD/CHF and USD/JPY.
EUR/USD falls below 1.0900 ahead of data from the European Central Bank.
On Friday, the monthly highs at 1.0930 presented a solid barrier to the weekly increase in the EUR/USD.
Towards the week’s close, the EUR/USD lost some ground after making gains on four consecutive days due to dismal German economic data and increased demand for the dollar.
The bullish momentum in the pair is still being supported by expectations for more rate rises by the ECB as soon as at the May event, especially in contrast to growing rumors that the Federal Reserve would elect to leave interest rates on hold at its next meeting.
According to the domestic calendar, retail sales in Germany fell 7.1% from February last year to February of this year. The March jobs data revealed that the number of unemployed people climbed by 16K, and the unemployment rate increased slightly to 5.6%. Before the address by ECB Chairperson Christine Lagarde, flash inflation data for the euro area will be the focus of the session later on.
In the US, the release of the PCE-measured inflation, together with Personal Income/Spending and the final Michigan Consumer Sentiment report, will be the center of interest.
Every week, the pair rebound finds it challenging to overcome the March high region around 1.0930.
In the meantime, despite temporarily declining recession risks, price movement about the euro should continue to closely track dollar dynamics and the ECB’s likely future steps in an environment where high inflation is still the dominant factor.
NZD/USD fails to surpass the 0.6300 level, reducing intraday advances to a multi-week high.
While it encounters resistance at the 0.6300 level, the NZD/USD pair experiences bullish momentum for the second day in a row, reaching its highest level since February 16 on Friday. Early in the European day, spot prices fluctuate between 0.6270 and 0.6275, and they now seem to have found support above a crucial 200-day Simple Moving Average (SMA).
A significant element supporting the NZD/USD pair is the pervasive risk-on climate, as seen by the generally bullish tone surrounding the equities markets. Hopes for a robust economic rebound in China help the risk-averse Kiwi and improve investor confidence as worries about a full-blown financial crisis subside. According to the official Chinese PMI statistics, business activity in the services sector expanded in March at the quickest rate in 12 years. While at a slower rate than anticipated, manufacturing sector growth did reduce a little during the reporting month.
USD/CHF Price Analysis: Below 0.9190, a corrective rebound is still unlikely.
At 0.9135, the USD/CHF pares its first daily gain in three days as market jitters grow ahead of important US inflation data. This is happening during the opening hour of Friday’s European session. As a result, the Swiss Franc (CHF) pair reverses from the last support line from mid-March.
The pair price is affected by the inability to cross the support that turned into resistance and the negative MACD indications.
Consequently, sellers of the Swiss currency pair are prepared to test an upward-sloping support line from early February, which is now at 0.9110 at the time of publication.
It should be highlighted that for the USD/CHF bears to be persuaded to probe the 0.9000 psychological magnets, a clean breach of the aforementioned crucial support line would require a confirmation from the 0.9100 round number and the prior monthly low of about 0.9060.
A breakout to the upside of the aforementioned prior support line, located at 0.9150, is hardly a free pass for the USD/CHF bulls.
USD/JPY: Additional gains might lead to a retest of 134.20 – UOB
UOB Group’s Senior FX Strategist Peter Chia and Markets Strategist Quek Ser Leang predict that USD/JPY may rise slightly and cross the 134.00 thresholds soon.
“The fast and rapid advance has potential to grow, but profoundly overbought circumstances imply a sustained climb over 133.50 is improbable,” the 24-hour perspective said yesterday. After that, US Dollar traded comparatively quietly between 132.19 and 132.96. Early Asian trading saw the USD/JPY cross 135.00. A break of 133.50 today won’t be unexpected, but the significant resistance at 134.20 could be just out of reach. Help may be found at 132.80 and 132.40.
During the next three weeks: “Our analysis from yesterday (March 30, position at 132.60) remains valid. The current Dollar weakness is over, as was indicated. The current US Dollar recovery may continue to 134.20. A sustained increase over this level is improbable at this time. Overall, the positive pressure will continue as long as the USD remains above 131.70 (the previous day’s “strong support” level was around 131.20).
Please click here for the Forex News Updates from 30 March, 2023.