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22 March 21
European Equities: COVID-19 News and FED Chair Powell in Focus
There are no material stats from the Eurozone to provide the majors with direction. The lack of stats will leave COVID-19 news updates and FED Chair Powell to influence.
It was a bearish end to the week for the European majors on Friday. The DAX30 and the CAC40 fell by 1.05% and by 1.07% respectively, with the EuroStoxx600 declining by 0.82%.
With no major stats from the Eurozone or the U.S to provide the majors with direction, news of new lockdown measures weighed.
France reintroduced lockdown measures in regions of the country heavily impacted by fresh spikes in new COVID-19 cases.
Vaccination shortages in France and across the EU remain a going concern, with the French economy facing yet another uphill battle.
According to Bloomberg’s vaccination tracker, the EU has vaccinated 8.6% of its population. More importantly, only 3.7% have been fully vaccinated.
Low vaccination rates will continue to leave the EU and Eurozone economies at the mercy of the coronavirus.
It’s a quiet day ahead. There are no material stats to provide the European majors with direction.
From the U.S, hosing sector data for February are due out. These are unlikely to influence the majors late in the European session, however.
On the monetary policy front, FED Chair Powell is scheduled to speak. Following last week’s FOMC press conference and projections, however, the FED Chair would need to move from the script to impact the majors.
In the futures markets, at the time of writing, the Dow Mini was down by 78 points, with the DAX down by 51 points.
EUR/USD Daily Forecast – U.S. Dollar Tries To Gain More Ground At The Start Of The Week
EUR/USD did not manage to settle above the resistance at 1.1900 and is trying to settle below the support at 1.1880.
EUR/USD faced resistance at 1.1900 and declined towards the nearest support level at 1.1880. Currently, EUR/USD is trying to settle below this level. In case this attempt is successful, EUR/USD will head towards the next support level at 1.1850.
A move below 1.1850 will open the way to the test of the support at 1.1830. In case EUR/USD settles below the support at 1.1830, it will head towards the next support level at 1.1800.
On the upside, the nearest resistance level for EUR/USD is located at 1.1900. This resistance level has been recently tested and proved its strength. In case EUR/USD manages to get above the resistance at 1.1900, it will head towards the next resistance level at 1.1925. A move above the resistance at 1.1925 will push EUR/USD towards the next resistance at the 20 EMA at 1.1955.
https://www.investing.com/currencies/eur-usd-chart
Gold Price Analysis: Break below $1728 to pave the way for further XAU/USD weakness
Gold witnessed some selling during the early part of the trading action on Monday. The yellow metal is not out of the woods yet, as an ascending trend-line holds the key for XAU/USD bulls, FXStreet’s Haresh Menghani briefs.
“The upside seems limited as investors seemed reluctant from placing bullish bets ahead of the Fed Chair Jerome Powell’s speech in a virtual panel discussion. Powell and Treasury Secretary Janet Yellen will also make their first joint appearance before the US House Financial Services Committee on Tuesday to testify on Fed and Treasury COVID-19 policies.”
“The lack of any strong follow-through buying beyond the $1740-42 supply zone warrants some caution before positioning for any further appreciating move. This, coupled with the fact that the post-FOMC positive move faltered ahead of the $1760-65 horizontal support-turned-resistance, favours bearish traders.”
“A sustained break below the trend-line support, currently near the $1728 region will reaffirm the negative bias and pave the way for further weakness. Gold might then turn vulnerable to break through the $1720 intermediate support and accelerate the slide towards the $1700 mark. The downward trajectory could further get extended and drag the metal back towards the multi-month low, around the $1677-76 region touched earlier this month.”
“Any meaningful upside might continue to confront stiff resistance near the $1760-65 region. A convincing breakthrough might trigger a short-covering move and push the metal further towards reclaiming the $1800 round-figure mark.”
https://www.investing.com/currencies/xau-usd-chart
USD/JPY to race higher as US Treasury yields continue to rise
The consolidation in the USD/JPY over the past two weeks has given a firm base at 108.50. Meanwhile, US 10-Year Treasury yield climbed above 1.7%, a 14-month high. If American Treasury rates continue to rise they will pull the USD/JPY higher, according to FXStreet’s Analyst Joseph Trevisani.
“With the US Federal Reserve apparently happy or at least tolerant of rising Treasury and commercial yields and the BOJ quietly pleased, the direction of the USD/JPY is higher. Nonetheless, even under this fundamental impetus, the longer the pair lingers without new highs, the greater the temptation for traders to book some of those gains.”
“The USD/JPY ranged above 110.00 for much of 2018 and 2019 so there is no fundamental reason that if US rates continue to rise, it could not return to those levels.”
“Technical analysis shows the USD/JPY has good support at 108.50 and at 107.90. Immediate resistance at 109.35 and 109.65 is weak. The early pandemic plunge and recovery from late February to late March last year will give little pause one way or another, the traded volumes on those panicky days were far too thin for positioning.”
https://www.investing.com/currencies/usd-jpy-chart
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