Forex Trading Library

Forex Afternoon Wrap for 23rd March

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Key Notes:

  • UK CBI industrial order expectations 0 vs. 9

Later

  • ECB’s Mario Draghi Speech
  • US existing home sales
  • Eurozone consumer confidence
  • FOMC member, Fischer Speech

Currency markets opened on a quiet note but carried through from Friday’s theme of a weaker US Dollar. The risk off market sentiment saw the commodity risk currencies edge against the Greenback in early Asian trading. While the Aussie dollar remained choppy initially, the AUDUSD managed to reverse its gains after hitting session lows to 0.776 levels, to currently trade near 0.782. A break above this high could see further gains in store for the Aussie. The Kiwi Dollar also managed to remain in the green, trading near 0.76 levels, keeping up the bullish momentum since last Wednesday’s FOMC meeting, after the pair managed to break above the previous resistance near 0.75 levels. USDJPY was weak earlier today as the pair failed to retrace any of its declines from Friday. At the time of writing USDJPY was trading below 120, at 119.8 levels and looks set to dip lower to 118.4 levels later during the week.

There were no fundamental news released in the Asian session and the European session was also relatively quiet. Negotiations continue from the Greece’s side to resolve the debt crisis, but so far there doesn’t seem to be any clear headway made, as such the risks of a Grexit continue to build up as Greece treads closer towards another default. Lack of fundamentals left the Euro to trade higher against the Greenback but ECB President, Mario Draghi is due to speak later today which could pose some risks to the Euro.

Later in the day, the Eurozone consumer confidence data is also due to be released along with US existing home sales data.

A number of Federal Reserve members are scheduled to speak this week starting with FOMC vice-chairman, Fischer. Earlier the markets ignored hawkish comments from St. Louis Fed, Bullard, who noted that June rate hike remains an option for the FOMC.

Across the board, the Greenback’s weakness was felt as even the commodity markets started showing signs of medium term strength. WTI Crude Oil was trading near $46 at the time of writing, while Gold continued to push higher, trading near $1184 levels. The US Dollar Index managed to push higher in the early trading session today, making a high of 98.55 but failed to keep the gains as the buck fell below 98, trading near 97.33 at the time of writing.

The British Sterling was the only other currency which was weaker today, as the Cable was trading within a tight range while easing against most of its peers. GBPUSD failed to capitalize on the USD’s weakness, as the currency was seen struggling near 1.49 levels, although we expect this trading range to be broken quite soon.

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