Daily FX Technical Trend Bias/Key Levels (Thurs 21 Mar)

Fed doves reinforce further USD weakness except against GBP.

FX – Further USD weakness except against GBP

  • EUR/USD – Trend bias: Further push up within range. The pair has managed to stage the expected push up towards the 1.1395/1.1400 key short-term resistance/target. Thereafter, it has surpassed above 1.1400 (01 Mar 2019 minor swing high area + medium-term descending trendline from 24 Sep 2018 high) reinforced by a dovish Fed where it has signalled in its latest “dot-plot” on the projected future interest rate movement trajectory that there will be zero interest rate hike in 2019 from an earlier 2 interest rate hikes. Thus, our earlier expectation for a slide back towards the bottom portion of a medium-term sideways range configuration in place since 12 Nov 2018 low has been pushed back for now. Maintain bullish bias with a key short-term support at 1.1380 (the pull-back of the former medium-term descending trendline from 24 Sep 2018 high + 23.6% Fibonacci retracement of the on-going rebound from 08 Mar 2019 high to 20 Mar U.S session high of 1.1448) for a further push up to target the next intermediate resistance at 1.1515 (30 Jan 2019 swing high + Fibonacci expansion cluster). On the other hand, failure to hold at 1.1380 negates the bullish tone to revive the “slide within range” scenario towards the 1.1335/1320 minor support in first step (19/20 Mar 2019 swing lows).
  • GBP/USD – Trend bias: Push down within range. The earlier “popped up” right after the dovish FOMC announcement that brought the pair up to an intraday high of 1.3250 evaporated. Thereafter it traded back down to a low of 1.3180 in the last hour of yesterday, 20 Mar U.S session due to the on-going squabbles on deadline extension date for Brexit. Flip to a bearish bias below key short-term resistance at 1.3295 (the minor descending trendline from 14 Mar 2019 + 19 Mar 2019 minor swing high) for a further potential push down to retest yesterday low at 1.3145 before targeting the next support at 1.3050/3000 (11 Mar 2019 swing low + ascending support from 03 Jan 2019). On the other hand, a break above 1.3295 sees another push up to retest the 1.3350 key medium-term range resistance in place since 09 Jul 2018).
  • USD/JPY – Trend bias: Down. The pair has staged the expected slide to hit the 110.75 near-term support/target. It breached below 110.75 to print a low of 110.50 in yesterday, 20 Mar U.S. session post FOMC. No clear signs of bearish exhaustion yet, maintain bearish bias with tightened key short-term resistance now at 110.95 (38.2% Fibonacci retracement of yesterday slide from 20 Mar Asian session high to U.S. session low + former minor swing low area of 08 Mar 2019) for a further potential push down to test the crucial support at 110.25/110.05 (the ascending channel support in place since the 03 Jan 2019 flash crash low area of 03 Jan 2019). On the other hand, a clearance above 110.95 negates the bearish tone for a push up to towards the next intermediate resistance at 111.20 (former minor swing low area of 19 Mar 2019 + pull-back resistance of former minor range support from 08 Mar 2019 low).
  • AUD/USD – Trend bias: Push up within range. The break above 0.7090 short-term resistance has invalidated the bearish scenario towards 0.7020/7000. Turn bullish with key short-term support at 0.7100 (former minor swing high area of 14 Mar 2019 + 61.8% Fibonacci retracement of yesterday push up from 20 Mar 2019 Asian session low to today, 21 Mar current intraday Asian session high at 0.7168) for a further potential push up to target 0.7200 next (the medium-term descending trendline in place since 03 Dec 2018 + 21/27 Feb 2019 swing high areas). On the other hand, failure to hold at 0.7100 revives back to push down scenario towards 0.7020/7000.
  • NZD/USD - Trend bias: Push up within range. The break above 0.6870 short-term resistance has invalidated the bearish scenario towards 0.6750/6730 and the pair has also broken above the 0.6900/6920 upper boundary of a “Symmetrical Triangle” range configuration in motion since 04 Dec 2018 high. Turn bullish with a key short-term support now at 0.6870 (former minor swing high of 13/18 Mar 2019 + minor ascending trendline from 08 Mar 2019 low) for a further potential push up to target 0.6970 (04 Dec 2018 swing high) and 0.7025 (major descending trendline resistance from 27 Jul 2017 high + 07 Jun 2018 swing high). On the other hand, failure to hold at 0.6870 negates the bullish tone for a slide back to retest 0.6750 swing low of 07 Mar 2019.                              

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.