Beginning with the fundamentals, there will be only few economic releases this week and traders will focus mainly on the U.K CPI data, which is due on Tuesday 22nd. Both the CPI MoM and YoY related to the month of February are expected to increase towards 0.4% up from -0.8% and 0.3% respectively. While the CPI Core YoY is likely to remain unchanged at 1.2%.
In the Eurozone, we will wait for a couple of PMI’s releases, which contains both the Construction and the services sectors in addition of the composite indicators.
Finally, we are reviewing the U.S economic figures for this week. Beginning with the existing home sales, analysts expect a slowdown in February as the MoM variation is expected to decline sharply by -2.9% compared to 0.4% previously.
Moreover, the Manufacturing PMI for the month of March is likely to rise to 51.9 up from 51.3 during last month. In the meantime, we expect an increase in new home sales, a pick up to 510K up from 494K is likely.
To conclude, we have some economic growth figures coming up on Friday but we do not expect any change by the time being. The GDP annualized QoQ is expected to stabilize at 1.0% while the GDP price index is likely to remain unchanged at 0.9% in the fourth quarter of last year.
Now let’s have a look at the technical side:
The pair broke below its hourly range located between 114.00 and 112.00 levels, which cleared the way for another leg lower in this pair.
Technically, the pair is testing a major support level at 111.00 ahead of this week close. The daily trend is bearish and consequently we are seeing the upside momentum limited in this pair.
A break below 111.00 should trigger a big sell-off towards 110.00 level while a daily close above 112.00 will call for a larger correction in the coming hours.
Meanwhile, we prefer to stay away from this pair as Bank of Japan intervened last week in the market trying to cap the yen strength.
The British pound soared as prices managed to break above last week high, reinforcing the bullish outlook in this pair.
Technically, the break of 1.4400resistance level cleared the way for 1.4500 psychological barrier and as expected, the Sterling rallied to reach 1.45 area before to stabilize around 1.4450 level. As of now, traders should focus on this daily resistance, as a break above it is likely to expose February high at 1.4670.
It is important to note, that a bearish divergence has emerged in the RSI indicator as per this technical chart, which may lead to a downside move below 1.4400 before to find buyers again.
From a wide angle, the pair should remain well supported above 1.4220 low and only a break below this level will cancel our positive outlook.
From an intraday standpoint, 1.4400(former resistance) should act as a support by now while a 1.4475 is seen as the near-term resistance.
The Euro traded higher during last week and reached a major descending trend line that comes from 1.1495 peak. This intersection level stands at 1.1340 level, which is near the daily resistance located at 1.1375.
Consequently, our focus will be on this resistance zone in the next days, as a close above 1.1340-1.1375 zone will confirm a big reversal to the upside in this pair. Looking at the technical levels for the week ahead, we are seeing the nearest support around 1.1220 level.
Actually, our view remain bullish in the near-term but in the meantime, we expect a short-term correction that can reach as low as 1.1220 level before the bullish trend resume. In addition, traders should keep in mind that the bullish pivot is located at 1.1060 and as far as the pair keep trading above this level, the view will remain positive.
Gold keep fighting to overtake its monthly high but we expect it to face strong resistance around 1260/1270 zone this week as bears managed to protect 1285 peak.
Technically, the yellow metal found strong demand around 1225 level, which represents a key Fibonacci retracement (61.8% of the rally from 1190) and actually our view is bullish in the yellow metal , looking for a re-test of 1285$ per ounce in the next days.
In addition, the weekly trend remains bullish, and as far as prices keep trading above 1190 low, 1308 peak may remain a theoretical target from a swing trading perspective. For today, if prices fail from the intraday resistance zone, then we will for buyers to enter the market around 1248-1243 zone for another leg higher.
In the other side, a break below 1225 support will expose 1200-1190$ support zone.
The pair bounced from 1.2920 low on Friday as bearish momentum began to weaken.
Prices managed to break above a bearish trend line that comes from 1.3130 peak, which may signal a potential recovery in this pair.
As of the week ahead, we will focus on 1.3110/30 zone in the upside and 1.2985 in the downside and we will wait for the break of one of these zones to confirm the next move in this pair.
However and after 9weekly closes in red, a positive week cannot be ruled out in this pair as a larger correction is inevitable in this pair.
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