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24 February 21
Economic Data Puts the EUR in Focus Ahead of Day 2 of FED Chair Powell Testimony
A quiet day on the economic calendar leaves the EUR and the Dollar in focus. German GDP numbers are due out ahead of a 2nd day of Powell testimony.
The Day Ahead:
For the EUR
It’s a relatively quiet day ahead on the economic calendar. 2nd estimate GDP numbers for German are due out later this morning. Following revisions to the Eurozone numbers, expect any revision to 4th quarter to numbers to influence.
At the time of writing, the EUR was up by 0.07% to $1.2158.
For the Pound
It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.
The lack of stats will leave the Pound in the hands of market risk sentiment on the day.
We would expect any downside to be limited, however, with plans to ease COVID-19 restrictions positive for the Pound.
At the time of writing, the Pound was up by 0.53% to $1.4188.
For the USD
It’s a relatively quiet day ahead on the economic calendar. New home sales figures for January are due out later today.
We don’t expect the numbers to provide the Dollar or the broader markets with direction, however.
Chatter from Capitol Hill will likely be the key driver on the day.
AUD/USD Forex Technical Analysis – Close Under .7912 Forms Potentially Bearish Closing Price Reversal Top
The direction of the AUD/USD on Wednesday will likely be determined by trader reaction to .7912.
The Australian Dollar is trading flat on Wednesday after giving up earlier gains. The move suggests that investors may be concerned about valuations after the Aussie crossed to the strong side of its March 14, 2018 top at .7916 but fell short of the February 16, 2018 top at .7988.
The Aussie was boosted early in the session after the U.S. Dollar weakened as the promise of extended monetary conditions globally boosted investor appetite for riskier currencies.
Daily Swing Chart Technical Analysis
The direction of the AUD/USD on Wednesday will likely be determined by trader reaction to .7912.
Bullish Scenario
A sustained move over .7912 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the intraday high at .7945. This is a potential trigger point for an acceleration to the upside with the next major target .7988.
Bearish Scenario
A sustained move under .7912 will signal the presence of sellers. This could trigger the start of a short-term correction into .7834.
Closing Price Reversal Top
A close under .7912 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with .7834 the next downside target price.
https://www.investing.com/charts/forex-charts
E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3900.00, Weakens Under 3881.75
The direction of the March E-mini S&P 500 Index early Wednesday is likely to be determined by trader reaction to 3881.75.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has shifted to the downside. The main trend will change to down on a trade through 3656.50. A move through 3959.25 will signal a resumption of the uptrend.
The minor trend is down. This is controlling the momentum. A trade through 3936.00 will change the minor trend to up. A move through 3804.75 will indicate the selling pressure is getting stronger.
The minor range is 3959.25 to 3804.75. The index is straddling its pivot at 3881.75 late in the session on Tuesday.
The short-term range is 3656.50 to 3959.25. Its 50% level at 3807.75 was tested earlier in the day when the index fell to 3804.75.
The next potential support is a 50% level at 3777.50. This is followed by a major value zone at 3728.25 to 3673.75.
Short-Term Outlook
Based on the price action late in the session, the direction of the March E-mini S&P 500 Index early Wednesday is likely to be determined by trader reaction to 3881.75.
Bullish Scenario
A sustained move over 3881.75 will indicate the presence of buyers. The first target is the Fibonacci level at 3900.00.
Sellers could come in on the first test of 3881.75 to 3900.00. They are going to try to form a potentially bearish secondary lower top.
If the buying is strong enough to take out 3900.00 then look for another potential surge into the minor top at 3936.00. Momentum will shift to the upside on a trade through this level. This could lead to an eventual test of the record high at 3959.25.
Bearish Scenario
A sustained move under 3881.75 will indicate the presence of sellers. This could trigger a quick break into 3850.25. If this fails then look for a possible acceleration to the downside with the support cluster at 3807.75 to 3804.75 the next potential target.
https://www.investing.com/charts/indices-charts
GBP/USD now focuses on 1.4300 and beyond – UOB
The recent strong performance in the British pound could lift Cable to the 1.4300 level and above, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘overbought advance in GBP could test 1.4100 first before a pullback can be expected’. We added, GBP ‘is not expected to challenge the next resistance at 1.4150’. GBP subsequently rose to 1.4117 before closing at 1.4112. GBP soared during early Asian hours and has just breached 1.4150. While further advance is not ruled out, the rapid rise appears to be overdone and the next major resistance at 1.4300 is unlikely to come into the picture. Support is at 1.4120 followed by 1.4070.”
Next 1-3 weeks: “We have held a positive view in GBP for more than 2 weeks now. In our latest update from Monday (22 Feb, spot at 1.4030), we indicated that ‘upward momentum remains strong and GBP could advance further to 1.4100’. We added, ‘a clear break of 1.4100 would shift the focus to 1.4150’. We did not anticipate the sudden surge in GBP as it just breached 1.4150 during Asian hours and the focus has shifted to 1.4300 followed by the 2018 high of 1.4377. On the downside, a break of 1.4020 (‘strong support’ level was at 1.3940 yesterday) would indicate that the positive phase in GBP has run its course.”
https://www.fxstreet.com/news/gbp-usd-now-focuses-on-14300-and-beyond-uob-202102240647
https://www.investing.com/charts/forex-charts
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