A variation of economic data were released from different countries this morning, however the data wasn't sufficient to overshadow the main theme of today's session; which remains the recent development from the Fed and the U.S economy.
The inflation figures from the euro zone were released showing Consumer price index held steady at 1.7, the core component which excludes food and energy also remained at 1.5% last month. Industrial production across the euro zone expanded by 0.2% last month from a 1.1% contraction in January, although there is a noticeable improvement the numbers came well below market estimates of 0.8% expansion. From the U.S, current account deficit widened to 124 Billion from 108B; 10 billion above market consensus. Also inflation estimates in the form of Producer price index showed import prices rose 0.4% in February.
Markets continue to respect the green back, after expectations of a new package of stimulus were dumped at least temporary. The U.S dollar index struck to new highs today at 80.43, after breaching the 50-days SMA few days ago, the index completed a successful retest of the average to continue the bullish move and surpass the recent swing high and major resistance at 80.10. Steady trading above this level shall be the catalyst for continuing the bullish trend towards 81.75 high.
The Downside pressure on the EUR/USD pushed the pair to retest a critical support level today at 1.3025, we have seen yesterday's session end below the 50-days SMA, which is a negative sign per se, however we still see an important horizontal support among 1.2975-1.3025. A daily closing below this key support shall resume the main bearish trend eying the recent low again around 1.2600. A rebound from current levels is probable; however we need to see a breach back above 1.3110 to confirm a sustained bullish move to 1.3200 areas.
The USD/JPY bullish trend looks unstoppable; on the way towards the main potential resistance starting from 84.00 to 85.00. The behavior and the bullish momentum behind the rally hints something bigger could be on the horizon. However to look for more upside potential over the long; we still need to stability above 85.00 areas over weekly basis. For now, downside corrections shall be a good opportunity to re-enter, where main support levels start at 82.60 and 81.90.
Cable continues to withstand the downside pressure, the pair is fluctuating among the intraday key resistance at 1.5750 and 1.5650 support. Starting by the bearish scenario, 1.5650-1.5630 is a critical level, thus we need to see a clear breach and steady trading below this level to look for further downside action towards 1.5400 and 1.5250. To the upside, if price manages to breach the descending resistance of this intraday bearish channel around 1.5750, bullish momentum shall accelerate to 1.5830 and 1.5890 potential resistance levels.
Gold is being hammered, the shiny metal dropped around 50 bucks so far, and breaching the recent swing low at 1662.00 which cleared the way for further sell-off, now 1662.00 should act as a resistance. Next possible stops is seen at 1640.00 and 1620.00