USD reigns supreme in the FX market

USD reigns supreme in the FX market

The USD reigns supreme in the FX market despite a correction lower against its counterparts yesterday, as the war in Iran is entering its sixth day. The safe-haven qualities of the greenback tend to guide it on a fundamental level, with other currencies following,  and today we note the release of the US weekly initial jobless claims figure as well as January’s US Challenger Layoffs figure in anticipation of the release of the US employment report for February tomorrow.

Oil prices continue to rise, yet at a slower pace

Oil prices continued to rise yesterday and during today’s Asian session, yet the bullish effect seems to be finding a ceiling around $77-$78/barrel for WTI and $83-$85/barrel for Brent. The market may be requiring further escalation of the US-Iranian conflict, or a fundamental factor draining the supply side of the international oil market in order for oil prices to be pushed even higher. 

US stock markets regain some confidence

US stock markets regained some ground yesterday, as market hopes for a quicker end to the US-Iranian conflict allowed for an improvement in the market sentiment. The market’s hopes were enhanced by reports noting that Iranian intelligence approached its US counterparts in search towards ending the conflict. The report was quickly rebutted by the Iranian side though and the war currently seems to be still widening and fighting intensifying. Should we see further escalation we may see US equities retreating lower.   

Bitcoin rallies on improved market sentiment

Bitcoin rallied yesterday, clearly surpassing $70k in a 7%+ surge. The rise of the crypto’s price action was a result of an improved market sentiment, US President Trump defending the Genius Act and a continuance of ETF inflows. On the other hand, some analysts are still seeing risks as tilted downwards for the crypto market noting that the  bearish cycle may not have ended yet.

Other highlights for today

Today we get Sweden’s preliminary CPI rates for February, the Euro Zone’s and the UK’s February Construction PMI figures and Euro Zone’s retail sales for January. On a monetary level, we note that ECB’s De Guindos and Donnery, while later on Fed Vice Chair Bowman are speaking. 

Charts to keep an eye out

In the FX market, EUR/USD continued to weaken in today’s Asian session, placing some distance between the price action and the 1.1665 (R1) resistance line. We maintain a bearish outlook for the pair, given also that the RSI indicator is near the reading of 30, implying a strong bearish market sentiment for the pair. Should the bears maintain control, we may see EUR/USD aiming if not breaching the 1.1465 (S1) support line. Should the bulls take over, we may see the pair reversing direction breaking the 1.1665 (R1) line and start aiming for the 1.1915 (R2) resistance level.        

BTC/USD rallied 7%+ yesterday, testing the 72500 (R1) resistance line, in maybe the most characteristic move in the markets  yesterday. Given that the crypto’s price action failed to clearly break the prementioned resistance line, we maintain our bias for a sideways motion yet warn for Bitcoin’s bullish tendencies, given also that the market sentiment is increasingly turning more bullish. Yet we also note that the cryptos’ price action has hit on the upper Bollinger band which may slow down the bulls. For a clearcut bullish outlook we would want to see BTC/USD breaking the 72500 (S1) line clearly and start actively aiming for the 81160 (R2) resistance level. For a bearish outlook to be adopted, which we view as remote currently, we would require a clear breaking of the 65000 (S1) line, and BTC/USD start aiming for the 60000 (S2) level.

EUR/USD daily chart

• Support: 1.1465 (S1), 1.1260 (S2), 1.1065 (S3).
• Resistance: 1.1665 (R1), 1.1915 (R2), 1.2080 (R3). 

BTC/USD daily chart

• Support: 65000 (S1), 60000 (S2), 49200 (S3).
• Resistance: 72500 (R1), 81160 (R2), 88000 (R3).