- March 23, 2021
- Posted by: Analysis Team
- Category: FOREX, Technical Analysis
The British pound declined after mixed economic data from the United Kingdom. According to the Office of National Statistics (ONS), the overall unemployment rate dropped from 5.1% in December to 5.0% in January. This decline was better than the median estimate of a rise to 5.2%.
In the same period, the average earnings with bonus increased from 4.7% to 4.8%, which was worse than the expected 4.9%. Without the bonus, the earnings rose from 4.1% to 4.2%, worse than the expected 4.4%. Meanwhile, the claimant count increased by more than 86.6k in February. In general, UK employment numbers have been relatively better than those from other countries because of the government’s furlough program. Also, the UK government has rolled out the vaccine faster than what analysts were expecting.
US stock futures declined today as traders waited on an important statement by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen. The futures tied to the Dow Jones fell by more than 130 points while those tied to the Nasdaq 100 and S&P 500 index declined by more than 0.10% and 0.40%, respectively. According to the Wall Street Journal, Powell will reiterate that the central bank continues to provide support to the US economy. This statement will come less than a week after the Federal Reserve delivered its second interest rate decision of the year.
The price of crude oil and other commodities declined as the market reacted to the overall strong US dollar. The price of the West Texas Intermediate (WTI) and Brent declined by more than 3.70% to $59.25 and $62.20, respectively. On the other hand, the US dollar index rose by more than 0.40% as the US bond yields continued to fall. Later today, the price will react to the latest inventories numbers by the American Petroleum Institute (API).
The XBR/USD pair declined to an intraday low of 63.65 as the market reacted to the overall stronger dollar. On the hourly chart, the pair moved below the ascending channel shown in yellow. It has also moved below the envelopes indicator while the Average True Range (ATR) and the Relative Strength Index (RSI) have continued to decline. Therefore, the pair may keep falling as bears target the next key support at 62.00.
The EUR/USD price declined to an intraday low of 1.1923, which is slightly below yesterday’s high of 1.1948. On the hourly chart, the price is slightly below the important resistance at 1.1990, where it formed a double top pattern. The histogram and signal line of the MACD have also moved above the neutral line while the price is at the same level as the middle line of the Bollinger Bands. Therefore, the pair may still resume an upward trajectory as traders attempt to retest the next key resistance at 1.1970.
The NZD/USD declined sharply ahead of key trade numbers from New Zealand. The pair fell to 0.7100, which was the lowest level since March 9. On the four-hour chart, the pair was previously forming a head and shoulders pattern whose neckline was at 0.7130. It has also moved below the 25-day and 15-day moving averages. The pair will likely continue falling as bears target the next key support at 0.7090.