Technical Analytics Report

Fundamental Analysis Morning Market Review 24 March 2021

 Morning Market Review :


 EUR is stable against USD during today’s Asian session, consolidating around 1.1850 and local lows since March 9. Pressure on the instrument’s position is exerted by the general pessimistic sentiment of European investors, who are frankly disappointed with the epidemiological situation in the region, as well as with the decision of the authorities in a number of countries to extend the quarantine until mid-April. Europe is also lagging behind in terms of vaccination rates, as many countries have stopped using the drug from AstraZeneca since the beginning of the month due to reports that it may cause thrombosis. Today, investors are focused on statistics on business activity and the level of consumer confidence in the eurozone for March. In addition, during the day, the European Central Bank will hold a regular meeting, which will precede tomorrow’s meeting of the European Council. Later in the day, ECB President Christine Lagarde is expected to speak.


 GBP is declining against USD in trading this morning session, developing the “bearish” momentum formed the day before and renewing local lows since February 8. GBP is undergoing sales again against the background of the correctional growth of USD, despite the fact that the yield on Treasury bonds, which served as the main driver of USD growth for a long time, is now gradually decreasing. Macroeconomic statistics from Great Britain published yesterday did not provide significant support to GBP. The Claimant Count Change in February rose sharply by 86.6K, while last month the figure showed negative dynamics at the level of –20.8K. At the same time, the ILO Unemployment Rate in January unexpectedly fell from 5.1% to 5.0%, which turned out to be better than negative forecasts of growth to 5.2%. However, the February Claimant Count Rate is growing again from 7.2% to 7.5%, so the data from the ILO is unlikely to reflect the entire situation on the labor market.


 AUD is steadily declining against USD in today’s trading in Asia, developing a strong “bearish” momentum, formed the day before. The instrument loses about 0.30%, testing the level of 0.7600 for a breakdown. The development of the downtrend today is not hindered by strong macroeconomic statistics from Australia. Commonwealth Bank Manufacturing PMI in March rose from 56.9 to 57 points, which turned out to be better than the neutral forecasts of analysts. Commonwealth Bank Services PMI for the same period rose sharply from 53.4 to 56.2 points, while analysts had expected a recovery to only 53.8 points. Commonwealth Bank Composite PMI in March rose from 53.7 to 56.2 points.


 USD is declining against JPY in today’s Asian session, developing the “bearish” momentum that had formed the day before and canceling out the results of the “bullish” start of the week, when the instrument tried to retreat from its weekly lows. USD is under pressure from the yield on US bonds, which has been showing negative dynamics over the past few days. In addition, investors are clearly worried about the increasing price pressure against the background of significant injections of funds into the national economy to stimulate its recovery after the pandemic. However, the US Fed is still taking a cautious position, considering the growth of inflation to be acceptable and reporting that it has all the necessary tools to control it in the future. The minutes of the Bank of Japan’s meeting on the interest rate published today do not have a noticeable effect on the dynamics of the instrument. As before, the Japanese regulator plans to keep the parameters of monetary policy unchanged until a noticeable improvement in the situation on the markets.


 Gold prices are rising today, recovering from two “bearish” sessions in a row and responding to further weakening of USD and the decline in US Treasury yields. The day before, the major stock indices showed a decline against the background of speeches by the Chair of the US Fed Jerome Powell and US Treasury Secretary Janet Yellen in the US Congress. Despite the rather neutral tone of their statements, investors were disappointed that, according to the officials, it will take a long time to restore the previous economic activity. At the same time, Jerome Powell again tried to calm the markets, which fear a rapid rise in inflation in the United States due to the approval of an economic stimulus package in the amount of USD 1.9 trillion.

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