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17 March Forex daily review

Sergiy Zlyvko
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On Monday, the U.S. dollar closed lower to its competitors after the announcement of sanctions against Russia from the EU and the U.S. Lack of economic sanctions has caused a wave of risky asset purchases, which in turn had a positive impact on the single currency, British pound and negative impact on gold and Japanese yen.

Currently, the dollar index is at support line. DXY index rebounded three times on the level and given that today begins a two-day meeting of FOMC, it is believed that the currency will trade in a range formed by Wednesday. For DXY index, the average price in the range is 79.45.

The euro exchange rate against the background of risk appetite increase strengthened to 1.3945 mark and it is now trading at 1.3910. What is interesting on the hourly chart? Indicators are in positive territory. If we draw the line through 1.3935 and 1.3945 tops, the resistance level of 1.3955 is projected. We see on the forecast scenario the touch of this line and further rebound to 1.3880. While reducing on the way we meet strong support, which is formed by the lower channel line at 1.3905. In Europe at 10.00 GMT ZEW in Germany and the Eurozone is going to be published. We expect mixed performance, so the euro could decrease even before the report publication. Among American statistics February report on consumer inflation and a report on the construction sector will be released today.

British pound is consolidating between the levels of 1.6585 and 1.6665, although the range of the channel is 140 points. Tomorrow, the U.S. Federal Reserve will announce the decision on interest rates and incentive program volume. It is expected that QE3 will be reduced by $10 billion. The deal of Vodafone and U.S. Federal Reserve meeting must keep the pound in the range within two days. Indicators are in the neutral zone, so strong movement within the range can be in any direction. We expect closing the day at around 1.6625 and a strong movement – on Wednesday.

Due to crosses, AUDUSD pair was able to regain all the losses from 0.9100 highest point. In Asia, the Australian dollar received short-term support from the publication of March meeting protocol of the Reserve Bank of Australia. Aussie quickly lost all the points and it is now trading at 0.9085. Yesterday’s forecast is not matched, but we consider today again falling of AUDUSD as today a two-day FOMC meeting under the leadership of Janet Yellen begins. It is expected that the Fed will cut the third time QE3 by $10 billion tomorrow. This has a negative impact on the gold and AUD.

On the hourly chart of USDCHF we have three supports. Bulls have a great chance before the meeting of the U.S. Federal Reserve to fight back and go up. The next touch of support by the price breakdown level can be considered. Purely because of the meeting, we consider the growth of USDCHF.

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