by JustForex
The market has ignored the higher-than-expected PMI so far. The euro continued to decline against the dollar as stock prices continued to fall. But there are fundamental factors that can stop the decline. The yield spread between American Treasuries and German Bonds has begun to grow, which indicates a possible early stop of the pair’s decline.
The main scenario for EUR/USD is selling. The ADX shows strong bearish pressure, while convergence has formed on the MACD. Considering such technical indicators, buying looks risky, despite the positive fundamental background for the euro.
Alternative scenario: if the price manages to gain a foothold above the level of 1.1889, the pair may return to the previous range.
The pound plummets following the euro. Inflation data overshadowed the positive PMI in the services sector. In February, the consumer price index was only 0.1%, while economists had expected a 0.5% increase. The annual rate also fell by 0.3%, which weakened market expectations regarding the Bank of England’s monetary policy.
The main scenario for GBP/USD is selling. Bearish pressure continues to grow in short to medium term as the ADX shows a significant rise in bearish pressure on the H1 and the H4. The pair failed to bounce off the support level and closed the day near it. This suggests a continuation of the steep dive.
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Alternative scenario: if the pair consolidates above 1.3765, the pound may go up to 1.3875.
Volatility remains low in the dollar-yen pair. Another fall in risky assets was entirely offset by the growth of the dollar index, as a result of which the pair rose slightly by the end of the day. Additional support to the bulls was provided by the manufacturing sector’s indices, showing the acceleration of economic growth.
The main scenario is trading in a sideways range between 109.34 and 108.35. The ADX on the hourly timeframe is still close to the minimum values, despite an upward rebound within the day. The MACD moved into the positive area, but the price remained close to the moving averages, which indicated a continuation of the flat.
An alternative scenario implies the price-fixing below 108.35. In this case, the pair may fall to 107.08. A breakout of 109.34 will resume growth.
The pair stopped growing amid a rebound in oil prices. According to IHS Markit, the growth of production indices supported oil quotes. WTI has fully recovered from Tuesday’s fall. In this light, the Canadian dollar fell the least against the US dollar compared to other major currencies.
The main scenario is trading in a sideways range between 1.2608 and 1.2530. The ADX dropped significantly on Wednesday, indicating the likelihood of a corrective pullback all the way to the SMA 100 moving average at 1.2509. However, the main direction is still north.
Alternative scenario: if the price gains a foothold below 1.2509, the pair may resume its southern movement. A breakout of 1.2608 will indicate a continuation of corrective growth.
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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