Technical Analytics Report

Morning Market Review 23 March 2021

Fundamental Analysis - Morning Market Review 23 March 2021

EUR/USD

EUR is consolidating against USD in today’s trading after strong growth the day before, which allowed the instrument to return to the levels of a week ago. The pair was supported by a decrease in the yield of US bonds, which contributed to the development of correctional sentiments for USD. In turn, European investors fear a further deterioration of the epidemiological situation in the region. Following France, Germany also announced the extension of quarantine, so there is no reason to expect a noticeable recovery in the eurozone economy this spring. The macroeconomic statistics from the eurozone released yesterday turned out to be worse than expected and also did not contribute to the development of the “bullish” trend for the instrument. The current account balance in the eurozone fell sharply from EUR 51.9 billion to EUR 5.8 billion in January, which was significantly worse than market expectations of EUR 34.3 billion.

GBP/USD

GBP is slightly declining against USD during today’s morning trading session, correcting after similar sluggish gains the previous day. British investors are in no hurry to open new trading positions, preferring to wait for today’s publication of the UK labor market report for January-February. In addition, the market is awaiting a speech by the head of the Bank of England Andrew Bailey. Tomorrow, the UK is to publish February statistics on consumer inflation and retail prices. Inflation, as well as consumer prices, is expected to rise modestly in February, which clearly correlates with the gradual recovery in the economy of the UK, which has made significant progress in the vaccination campaign. The latter contrasts particularly clearly against the backdrop of failures in Europe, where there are problems with the use of the AstraZeneca vaccine, and many countries are forced to extend restrictive measures.

AUD/USD

AUD is significantly decreasing against USD in today’s trading in Asia, leveling the results of the “bullish” start of the week. The instrument is currently under pressure from technical factors, while the fundamental picture on the market is not changing much. Weak macroeconomic statistics, published in the US yesterday, provide significant support to the pair. Chicago Fed National Activity Index in February fell from 0.75 to –1.09 points, which turned out to be significantly worse than the forecast for a reduction to only 0.21 points. The volume of Existing Home Sales in the USA fell noticeably in February by 6.6% MoM after a slight increase by 0.2% MoM in the previous month. Analysts had expected decrease by 3% MoM only.

USD/JPY

USD is falling against JPY in trading this morning session, correcting after the growth the day before, which allowed USD to retreat from local lows since March 12. The instrument’s positions are under moderate pressure after the renewed decline in US bond yields and yesterday’s release of disappointing macroeconomic statistics on the dynamics of existing home sales in the US. In turn, Japanese statistics managed to support JPY. Coincident Index in January rose from 87.4 to 90.3 points against the forecast of an increase to 91.7 points. Leading Economic Index for the same period rose from 97.7 to 98.5 points, which also turned out to be slightly worse than the forecasts at 99.1 points.

XAU/USD

Gold prices are relatively stable during today’s Asian trading session, consolidating after a moderate decline the day before. A noticeable support for the instrument is provided by the decline in the yield of US bonds, which retreated from their annual highs. In addition, investors are reacting to the release of disappointing US macroeconomic statistics. In turn, the pressure on gold quotes on Monday intensified with the sudden dismissal of the Governor of the Central Bank of the Republic of Turkey, who was criticized for a sharp increase in interest rates. Investors fear that Turkey may face a new currency crisis, given the high inflation and virtually empty reserves.


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