In this article, we have covered the highlights of global market news about the USD/JPY, EUR/USD, AUD/USD and USD/CAD.
USD/JPY Price Analysis: Yen retests one-month low near 134.00 as bears approach 50-DMA
For the third day in a row, USD/JPY bears are in control going into Monday’s European session. As sellers attempt to break the 134.00 barrier, the Yen pair oscillates around its lowest monthly levels, recorded earlier in the day.
A prolonged negative breach of a five-week-old bullish channel combines an apparent U-turn from the 200-DMA and a downside break of the 100-DMA to favor USD/JPY sellers. The most vital bearish MACD signals since early December 2022 may be on the same line.
With this, the Yen pair seems ready to decline toward the 132.50 50-DMA support level. However, the early-February swing highs at 132.90 have recently prompted the USD/JPY sellers.
The 130.00 round figure and the last monthly low around 128.00 will be in focus if the USD/JPY market stays negative over the 50-DMA.
On the other hand, a confluence of the 100-DMA and the channel’s bottom line above, close to 135.85, will determine if the USD/JPY pair recovers.
Even so, the 200-DMA might test the upward momentum close to 137.50 before leading prices to the top line of the channel above, at the latest around 139.50.
EUR/USD is now consolidating in the short term – UOB
Senior FX Strategist Peter Chia and Markets Strategist Quek Ser Leang now predict that the EUR/USD will trade in the 1.0560–1.0800 area for the foreseeable future.
24-hour view: “On Friday, we anticipated that the euro would ‘continue to push higher,’ but we also said it is unlikely to breach significant support around 1.0630. Nonetheless, the EUR grew more than anticipated, reaching a high of 1.0700. The upward trend has picked up a little, but not much. Today, EUR may increase to 1.0740. It is not anticipated that the primary resistance at 1.0800 will be challenged. A break of 1.0620 (minor support is at 1.0660) would signal a decrease in the upward pressure on the downside.
For the next three weeks: “Our most recent forecast was from last Wednesday (08 Mar, spot at 1.0550), when we predicted that the EUR would likely gravitate lower to 1.0485 due to the minor improvement in downward momentum. The euro surged past our 1.0630 “strong barrier” on Friday. The strong resistance has been broken, indicating that the downward pressure has subsided. We see the recent price movements as part of a consolidation range and anticipate that, for the time being, the EUR will trade between 1.0560 and 1.0800.
The AUD/USD is the highest in nine weeks, thanks to the SVB and Fed-led risk-on sentiment.
The 0.6665-70 resistance level was the focus of the most important daily advances for the AUD/USD bulls since early February on Monday morning in Europe. The Australian pair’s most recent inactivity may be explained by its inability to break through the five-week-old declining resistance line despite the general risk-on atmosphere and the weakening US Dollar.
S&P 500 Futures, which reflect the mood, recovered from a 2.5-month low, up roughly 1.60% at 3,960 at press time. It’s important to note that the Asia-Pacific equity markets are mixed because they have yet to recover from Friday’s bond and stock market collapse and are still struggling to deal with concerns about China.
As he said earlier on Monday, they must forcefully fight the meddling of foreign forces, including the “split” of Taiwan. This new word for China’s President Xi Jinping maintains the Sino-American conflict on the table. It’s important to note that Wall Street had losses on Friday, and US bond rates also saw their biggest monthly decline due to worries related to the Silicon Valley Bank (SVB) debacle.
Nonetheless, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the US Treasury Department worked together to reduce the risks over the weekend. US President Joseph Biden responded to the actions of the US authorities by saying, “Americans and American companies can have faith that their bank savings will be there when they need them.”
USD/CAD fell the most in a month as SVB and Fed fear weighed on the US dollar and boosted oil prices.
With an intraday loss of about 0.80% to 1.3720 as we go into Monday’s European session, USD/CAD is in peril. By doing this, the Loonie pair sellers applaud the general decline in the US Dollar and the recent increase in crude oil, Canada’s main export good.
As risk-on sentiment combines fading hawkish Fed forecasts to sink the greenback’s measure against the six major currencies, the US Dollar Index (DXY) falls to its lowest levels in a month, down 0.80% around 103.80. WTI crude oil, on the other hand, is up for the second day in a row, moving as high as $77.00 intraday.
Following the collapse of the stock and bond markets on Friday, the market’s mood improved as a result of coordinated actions taken by the US Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) to reduce the risks associated with Silicon Valley Bank (SVB) and Signature Bank over the weekend. After the incident, the authorities issued a statement promising “complete protection” for all Silicon Valley Bank and Signature Bank depositors. US President Joseph Biden responded to the actions of the US authorities by saying, “Americans and American companies can have faith that their bank savings will be there when they need them.”
Yet, it should be emphasized that the most recent SVB and Signature Bank scandal exposed the US bank’s precarious state and delayed expectations of further rate increases from the US Federal Reserve (Fed). In light of this, Goldman Sachs anticipates a rate rise in March, and the Fed Funds Futures have lowered their earlier optimistic chances in favor of a 0.50% increase in the Fed rate in March.
Please click here for the Market News Updates from 10 March, 2023.