Daily Market Report

31/03/2023
10:46

The US Dollar weakened on Thursday hit by the recent decline in the GDP figures while US stocks extended the rally as investors’ worries are fading away.

All major indexes were up on Thursday, with the Nasdaq entering a bull market after advancing more than 20% from December’s low.

Later today, traders will be looking for the latest monthly change in Eurozone inflation. The Consumer Price Index is expected to remain unchanged at 0.8%. In the meantime, the eurozone unemployment rate is seen at 6.7%.

In the US, both Chicago PMI and personal spending are set to decline from 43.6 to 43.4 and from 1.8% to 0.3% respectively.

Finally, analysts are seeing an increase in Canada’s GDP, the Canadian economy is expected to have grown by 0.3% compared to -0.1% previously.

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

EURUSD

The Euro traded higher on Thursday as buyers managed to push prices above the 1.0870 hourly resistance.

Currently, the Euro trend is on the upside and traders are likely to target the 1.0930 resistance which represents the highest level reached this month. On the other side, the downside risks remain limited above the 1.0815 low. In the near term, the formerly broken resistance of 1.0870 should become new support, therefore the single currency is expected to stay well supported above this level.

Meanwhile, the Euro is likely to stabilize in the coming hours as we approach a key resistance zone from where we might see some profit-taking.

To conclude, the bullish momentum is still unchanged, consequently, the Euro is expected to remain steady ahead of the monthly close.

GBPUSD

The British pound extended its advance as we have seen a successful breakout above the 1.2340 resistance level.

For the time being, we can see that the bullish momentum is increasing, which can lead to a continuation higher in the direction of the psychological barrier of 1.2400 followed by the 1.2440 level in extension.

Looking at the higher time frames, the trend remains on the upside, and the pair is expected to trade higher while above the 1.2280 level in the coming hours.

Technically, the pair is following a series of higher highs and higher lows which reinforces the bullish momentum. On the opposite, only a daily close below the 1.2280 support level should weaken the positive outlook.

USDJPY

The pair continue to advance in the near term after the recent break above the 133.00 key resistance.

However, the current recovery should be considered as corrective only, as the main trend remains bearish. Traders should wait for the current move to fade before looking for a continuation to the downside. If the retracement extends above the 133.00 level, then we will be looking for the 133.80 level as the next resistance in this pair.

On the opposite, a move down and a close below the 133.00 handle should warn about a potential bearish reversal, therefore, traders should look for a move back lower toward the hourly support of 132.20.

To conclude, the pair is about to end this month in the negative territory and while staying below the 135.15 peak in the coming days, bears are likely to remain in control.

USDCAD

This pair remains under pressure since breaking below the lower band of the short-term range that was located between the 1.3810 and 1.3650 levels.

From a technical standpoint, sellers are expected to challenge the psychological support of 1.3500 which stands near the 61.8% Fibonacci retracement of the latest advance that started from the 1.3260 low. This level is considered key for future price developments.
Moreover, a successful breakdown below it should clear the path for more losses in the direction of the next support at 1.3440.

On the opposite, a bounce from the mentioned above support can send prices back up in the direction of the hourly resistance zone located between the 1.3560 and 1.3580 levels.

GOLD

Gold started to show some signs of strength as the bullish momentum is gaining more force.

Yesterday, the yellow metal managed to break above the hourly resistance of 1975 which reinforces the bullish outlook. From a wider angle, the trend is on the upside and prices are trading inside a corrective triangle in the near term.

In the coming hours, buyers will be focusing on the next resistance at $1990 per ounce followed by the higher band of the triangle pattern shown in the chart below.
In the meantime, as long prices continue to trade above the 1955 level which represents the key support in the near term, any decline is likely to be short-lived.

Finally, the bullish momentum remains strong in gold, and traders should focus on the upside only.

Economic Analyst
Amine Hiani