EURUSD 21-03-2018 Intra-day analysis.
Its Fed day! But keep an eye on UK jobs report
Daily Forex Market Preview, 21/03/2018
The U.S. dollar was seen pushing higher on the day reversing the gains from Monday’s declines. Investors were seen bracing for the Fed meeting due later in the day. Although the markets have fully discounted a 25 basis point rate hike, the Fed’s dot plot and economic projections will play a key role in shaping the sentiment in the USD going forward. For the moment, the markets are expecting Fed officials to play it safe with three rate hikes this year.
Ahead of the Fed meeting, the UK’s jobs data will be on the line. The three month average earnings index is forecast to rise 2.6%, slightly accelerating from 2.5% seen before. The UK’s unemployment rate is expected to remain unchanged at 4.4%.
Economic data from Tuesday included the annual inflation data from the UK. According to official reports, the UK’s headline inflation rate was seen slowing to a pace of 2.7% which was more than expected and inflation was seen easing from January’s print of 3.0%. Core inflation rate also slipped to rise just 2.4% down from 2.7% previously. The data builds up to this Thursday’s BoE meeting where the odds of a hawkish signal from the Bank of England have increased.
EURUSD 21-03-2018 Intra-day analysis
EURUSD (1.2262): The euro currency gave up the gains from Tuesday. A modestly stronger U.S. dollar and some weak data from the Eurozone added to the declines. The German ZEW economic sentiment fell to an 18-month low for March. However, current conditions index was seen to have remained broadly stable. From a technical perspective, expect to see some volatility in the EURUSD today heading to the Fed meeting. Following the reversal near the resistance zone of 1.2363 – 1.2333 level, we expect the common currency to maintain the range, touching down to the lower support at 1.2179. A close below 1.2179 will expose the euro toward the next lower support at 1.2090 – 1.2070 level.
