Weekly Technical Analysis For March 16th to 20th, 2020 

A Busy Week For Trading: Fed And BoJ Rate Decisions Coming

EUR/USD: 

The US dollar gained value against all major currencies last week amid deepening panic about the coronavirus. The Euro showed a downward movement after the European Central Bank disappointed by not cutting rates

The European Central Bank (ECB) surprisingly announced that it was not cutting rates. Instead, the ECB introduced measures to support bank lending and expanded its asset purchase program by 120 billion euros ($135.28 billion). ECB President Christine Lagarde also aggravated a market selloff by saying it was not the central bank's job to close the spread between the borrowing costs of various members.

The U.S. central bank delivered an emergency half percentage-point cut last week and some expect further moves when they meet next week. The Federal Reserve said they will inject $1.5 trillion in reserves into the financial system. 

Additionally, U.S. President Donald Trump declared a national emergency. China made an emergency rate cut. Germany got around own laws to increase deficit spending.

Keep your eye on the Fed Monetary Policy Meeting this week. Many analysts expect the central bank to chop its own target policy rate. The meeting will give markets new guidance about how it plans to combat the economic fallout from the coronavirus.

Moreover, US Retail Sales figures will be closely watched on Tuesday. Economists predict that retail sales eased to 0.2% from 0.3% last month. On the other hand, Core retail sales, which exclude autos, are expected to have risen by 0.2%. A higher than expected reading should be taken as positive for the greenback.

The EURUSD pair found sellers just below 1.15 and then showed a downward movement last week. If the price stays below 1.1114, on a four hourly basis, the selling pressure may continue and we will follow the support levels at 1.1052. On the other hand, if the price goes beyond 1.1114, the next resistance level will be at 1.1165.

Support : 1.1052 - 1.0007 - 1.0965

Resistance : 1.1114 - 1.1165 - 1.1237

GBP/USD: 

The Bank of England (BoE) announced an emergency interest rate cut. The BoE cut rates by 50 basis points, down to 0.25%. However, despite the importance of this rate cut, it is uncertain if the bank will ease policy further.

The UK Unemployment Rate will be important for Sterling on Tuesday. It is expected to stay at 3.8% in January, the same as the previous reading. A higher than expected reading should be taken as negative for the Sterling

The GBPUSD pair dropped from 1.32 to the key level of 1.2286. If the price stays below 1.2286 on a four hourly basis, the downward movement may continue and the daily support level can be seen at 1.2205. On the other hand, if the pair rises above 1.2286, the next resistance level is holding at 1.2364.

Support: 1.2205 - 1.2110 - 1.2024

Resistance: 1.2286 - 1.2364 - 1.2428

USD/JPY: 

The Japanese yen fell against the U.S. dollar last week after the Bank of Japan introduced an additional stimulus. 

The Bank of Japan said last week it would buy 200 billion yen ($1.90 billion) of Japanese government bonds. The central bank also said it would inject an additional 1.5 trillion yen in two-week lending.

We will closely watch the BoJ Monetary Policy Meeting on Thursday. The BOJ is expected to ease policy to cushion the economic fallout from the coronavirus and shore up business confidence in the world's third-largest economy.

We will closely watch the 107.82 main support level. As long as the pair stays above 107.82, on a daily basis, the upward movement may gain more momentum and the resistance levels can be found at 108.14 and 108.52. In contrast, if the price drops below 107.82, the next support level will be at 107.52.
 
Support : 107.82 - 107.52 - 107.22

Resistance: 108.14 - 108.52 - 108.79

GOLD: 

The Gold Price closed last week above the 1524 main support level after a sharp drop. If the yellow metal’s price stays above 1524 on a daily basis. we might see an upward reaction and the major resistance level can be seen in 1540 and 1555.  On the downside, If the price drops below 1524, the next support level will be at 1509.

Support:  1524 - 1509 - 1492

Resistance: 1540 - 1555 - 1564

15 Mar 20 (Sun)

07:12 pm


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