Daily Marker Report

30/03/2023
10:42

The US Dollar traded slightly higher on Wednesday due to the lack of economic releases, while US stocks rallied as banking concerns continue to ease.

All major indexes closed higher yesterday, the S&P500 rose by 1.4%, the Dow was up 1% and the Nasdaq gained 1.8%.

As of today, traders will be looking for the US quarterly GDP which is expected to come unchanged at 2.7%. If the figures match expectations, this will confirm that the US economy’s pace of growth has stabilized. In the meantime, Initial jobless claims will be released, and forecasts are pointing to a higher reading.

Finally, Treasury Secretary Yellen is due to speak and an increase in volatility is highly anticipated.

Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro retreated after reaching the hourly resistance of 1.0870 mentioned in our previous report. Meanwhile, the trend remains on the upside in the near term.

Looking at the recent price action, we can see that the pair managed to bounce from the 50% Fibonacci retracement which keeps the bullish momentum intact. Traders should focus on the key support of 1.0720 in the coming days as only a breakdown below it should weaken the positive outlook.

As of now, the Euro is likely to stabilize as sellers might stop any recovery attempt, therefore, a successful break above 1.0870 resistance is needed to confirm another extension higher that can target the 1.0930 high.

To conclude, the trend remains bullish, but the momentum is losing steam, consequently, the Euro is expected to trade sideways as we approach the end of the month.

GBPUSD

The British pound traded lower on Wednesday as buyers failed to overtake the 1.2350 hourly resistance.

For the time being, we can see that the bullish momentum is weakening, which can lead to a downside retracement toward the 1.2280 support followed by the 1.2240 level in extension. From a wider angle, the trend remains positive, and buyers will try to keep the pair above the 1.2180 low in the coming days.

Moreover, the pair is following a series of higher highs and higher lows which reinforces the positive outlook. On the opposite, a clear breakdown below the 1.2180 support level can put the current uptrend under pressure.

USDJPY

This pair managed to recover strongly after breaking above the 131.80 resistance level.

From a technical standpoint, buyers are expected to challenge the psychological resistance of 133.00 which coincides with the 50% Fibonacci retracement of the latest decline that started from the 135.10 high. This level is considered key for future price developments.
A successful break above it should clear the path for more gains the next resistance at 133.80.

On the opposite, a failure from the 133.00 resistance is likely to push this pair back down in the direction of the 132.20 level followed by the 131.80 support in extension.

In the short term, we can see that the bullish momentum is increasing, moreover, the pair managed to break above the falling trendline as shown in the chart below, which reinforces the probability of a continuation higher.

USDCAD

The pair traded in line with our expectations as we have seen another decline on Wednesday following the recent breakdown of 1.3650 support.

Prices have reached the 1.3550 level mentioned in our previous report; therefore, we might see a recovery attempt on the back of profit-taking in the coming hours.
As of now, the trend has turned bearish in this pair, and any potential bounce is likely to be limited below 1.3615-1.3630 levels which represents the short-term resistance in this pair.

To conclude, the key supports are located at the 1.3555 level followed by 1.3535 and 1.3515 in extension, on the other side, important resistance is seen at 1.3605 followed by the 1.3615 level.

GOLD

Gold remains under pressure in the near term after we have seen a failure from the 1975 resistance level.

The yellow metal is expected to trade sideways to lower, while prices continue to trade below yesterday’s high. In addition, we can see that prices are trading inside a consolidation triangle; therefore, volatility is likely to stay elevated until we see a clear breakout outside of this pattern.

In the coming hours, buyers will be focusing on the hourly support zone of $1943 to $1935, this zone is expected to provide strong demand for gold if tested again, and as far as prices continue to hold above it, the upside trend is likely to remain unchanged as the recent decline is seen as temporary.

The positive outlook will stay valid unless we see a daily close below the 1935 level which is considered the main support level in the near term. Meanwhile, the 1975 level will continue to act as an important barrier in the coming hours.

Economic Analyst
Amine Hiani