For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for March 26
The most important event for today from the economic calendar is the release of CB consumer confidence at 16:00 MT time. According to the forecasts, the indicator will reach 132.1 points. Higher figures will boost the USD.
Now let’s look at the charts.
At first, let’s consider the daily chart of EUR/USD. After the disappointing releases on Friday, the pair fell to the support at 1.1288 but managed to recover towards the weekly pivot at 1.1394 yesterday. If the USD is supported today by the positive release, the pair will fall below the support at 1.1288. The next support is weekly pivot support at 1.1230. Otherwise, we may see the rise above the resistance at 1.1339. The next resistance in focus will be placed at 1.1407. If we look at indicators, parabolic SAR still shows the upward movement for the pair and ADX shows the strength of bulls.
Now let’s look at the H4. Here we can see that the 200-period SMA has been acting like resistance for the pair since yesterday at 1.1322. If the release of consumer confidence disappoints the market, bulls will break this resistance and try to move the pair higher to the next key level at the weekly pivot at 1.1339. On the other hand, strong release for the US will help the pair to stick below the support at 1.1302. The next support is situated at 1.1282. If this level is also broken, the next support in focus lies at 1.1250.
Let’s consider the USD/JPY pair. On the daily chart, the pair fell below the weekly pivot at 110.43, which lies close to the 50-day SMA. If the USD is strong today, the pair will rise above the weekly pivot at 110.43 and target the next resistance at 111.13. Otherwise, we may see the further slide towards the support at 109.18. From the technical side, Parabolic SAR shows the downward movement for the pair and ADX demonstrates the strength of bears. However, the doji candlestick was formed yesterday, which may signal that bears are tired to pull the price lower.
On the H4, USD/JPY has been consolidating between the support at 109.77 and resistance at 110.23. If bulls are excited today, they will break the 110.23 level and push the pair higher to the next resistances at 110.43 and 110.95. On the other hand, if bears take over the market, they will pull the pair below the support at 109.77, targeting the support at 109.55. If this level is broken, the next support is placed at the weekly pivot at 109.18.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
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