Trading plan for 27/03/2017:
The US Dollar is lower on Monday, as investors are increasingly questioning the chances of a fiscal package in the US following the defeat of the Trump administration in enforcing health reform. US Treasuries yields the strongest rebound on USD / JPY, which reached the lowest level in four months. Futures on the S&P500 index are down today by 0.7%, sending a negative signal to the stock market around the world. Hang Seng loses 0.4 percent and Nikkei has lost 1.5 percent, indirectly by the more expensive yen.
On Monday 27rd of March, the event calendar is bereft of important macroeconomic news, but global investors will keep an eye on Ifo Business Climate data from Germany released early in the European session.
EUR/USD analysis for 27/03/2017:
The Ifo data from Germany have beat the market expectations as all of the three parts of this sentiment index were slightly better than anticipated. The Ifo Business Climate was released at the level of 112.3 vs. 112.0 expected, the Ifo Expectations Index was released at the level of 105.7 vs. 104.3 expected and Ifo Current Assesment Index was released at the level of 119.3 vs. 188.3 expected. The market reaction is somewhat muted so far as the general good numbers were expected.
Let's now take a look at the EUR/USD technical picture at the daily time frame. The price had made a weekend gap and now it is trading just below the important technical resistance at the level of 1.0873. The overall market conditions at this time frame are overbought. This means some kind of correction should now be expected and any breakout below the gap zone ( narrow gray rectangle) is the first sign that the immediate top is in place.
Market snapshot: USD/CHF bearish bias continues
The US Dollar is still not in favor in the eyes of the global investors, so the price keeps slipping farther from the psychological level of 1.0000. The technical support at the level of 0.9859 was recently violated, but there is a chance for the corrective move to the upside as the market trades in overbought conditions and there is a clear bullish divergence between the price and the momentum indicator.
Market snapshot: GBP/USD in bullish mode
After an impressive rally, the British Pound trades just below the important technical resistance at the level of 1.2581, but the market conditions are clearly overbought. The growing bearish divergence is indicating that the price is losing the momentum and the corrective cycle might happen any time now.The next support is seen at the level of 1.2532.
Market snapshot: USD/JPY tries to find the bottom
The strong Japanese Yen makes the US Dollar to be sold since the FED interest rate decision in the middle of the March. The next support is the 50%Fibo at the level of 109.92, but the stronger support is the gray rectangle zone between the 61%Fibo at the level of 107.85 and Fibonacci Extension of the previous swing down at the level of 108.51. Moreover, there is a possible zone for the 200 DMA dynamic support as well, so this is where the USD/JPY might bottom this week.
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