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12 March Forex daily review

Sergiy Zlyvko
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Correction was expected, but not so deep. The dollar index fell to 79.55, but it is not updated the minimum of 7 March. Volatile dynamics between EURUSD and GBPUSD pairs limited decline of the index. The single currency against the U.S. dollar returned to a maximum of 1.3915 from 7 March this year.

There was not important economic data scheduled for Wednesday. Market participants are tied euro and ECB decision from March 6 to leave monetary policy unchanged and G7 harsh statements against Russia. The ECB will hold temporarily incentive programs and capital inflows into Eurozone from emerging markets will a few days support the single currency.

GBPUSD strayed from minimum 1.6570 after closing of Asian session. Dollar over the market dropped to the close of trading in Europe. In the morning in Asia after strong employment data in Australia AUDUSD has been strengthened and recently after ten hours of consolidation followed by 40-point shot of EURUSD and GBPUSD. It’s not clear what led to the active dollar’s sales, but such behavior before the opening of the European session is annoying. According to DXY index, we expected an update of yesterday’s low, but it is assumed that the index will return once again to the 79.70 line. The minimum of the forecast is made. Now the index is trading at 79.40. If the pressure on the dollar in the European session will continue, then the fall to the bottom of the channel can be considered. The level of 79.25 is projection of the line drawn on 79.70 and 79.45 law. If Europe does not support Asia, then we consider the correction to the end of the day.

On Wednesday on the breakdown of resistance at 1.3880, EURUSD rebounded to a maximum of 7 March. After a 10-hour outset in a narrow range, EURUSD jumped to 1.3945 mark. We assumed that, after upgrading from 1.3920 high the rollback will be but we were wrong. Buyers are going to storm 1.4000. All cross rates with the euro at the moment are on the buyers side. Even after the fall of the euro against the Australian dollar after strong report on the labor market in Australia, the euro turned up.

With the sharp growth of EURUSD, British pound fell to 1.6570. For 4 days pound fell by 200 points and on Wednesday afternoon returned to 1.6620 level. The pair is currently trading at 1.6680. Thought, we could back to it only in the U.S. session, but just a few minutes the dollar fell by 40 points against the euro and pound. At this level strong resistance extends. Break of 1.6660 will push the pound higher to 1.6725. In order to avoid the swing, today it would be better to refrain from trading or use minimal volume.

Australian dollar managed in the second half of the day to win back losses against the dollar and closed with a growth. Today’s strong report according the labor market in Australia helped for AUDUSD to rise by 74 points. According to the latest information AUDUSD is trading at 0.9070 against the intraday high of 0.9080. After such a rise the pair would normally goes to the outset or strengthened with sharp setbacks.

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