Easing Risk Aversion; British and European Central Banks Cooperate on Robustness of Home Financial Services【March 21, 2023】
Fundamental Analysis
Risk Aversion Eases Slightly, Authorities Seek to End Turmoil with Credit S Takeover
Markets are skeptical, looking for the next risky bank
Central banks agree to coordinate dollar supply; Japan, US, EU, UK, Canada, Switzerland
Profit-taking is evident in the market after last week’s big volatility
Supported First Republic Bank stocks plunge again
Other small and mid-cap bank stocks rallied, while the equity markets were unable to establish a direction
Market Interest in FOMC, 0.25% Rate Hike Expected, Divided on Viewpoints
Gold breaks above $2,000, profit-taking in the market
Slight easing of risk, but second and third risk banks may be found
Amazon announces plan to cut around 9,000 jobs
Technical Analysis
The pound-dollar is in an all-around strong market. On the other hand, the Swiss franc is also vulnerable to selling today, and while there is a slight easing of risk, it is not a fundamental solution to the underlying concerns. The fundamentals do not seem to be conducive to continued risk appetite. The dollar is likely to be targeted for a return to the yen. In any case, we expect a small range to continue until the outcome of the FOMC meeting.
Euro-Dollar (EURUSD)
Eurodollar rallied as ECB President Lagarde emphasized the strength of financial institutions in the EU zone; there is a large resistance zone between 1.0760 and 1.0780. Looking at the equilibrium chart, the candles are rebounding at the base line and the conversion line, and the lagging line is about to cross above the candles. Also, looking at the RSI, it is above 50 and at 53. The upward trend is in an uptrend.
Estimated rangeUSD 1.064 – USD 1.077Resistance lineUSD 1.075Support lineUSD 1.071
US Dollar-Canadian Dollar (USDCAD)
The Canadian Consumer Price Index will be released today. The forecast is 4.8%, lower than the previous forecast. If the index breaks below the equilibrium line at 1.3650, the next support line will be at CAD 1.360.
Estimated rangeCAD 1.360 – CAD 1.3750Resistance lineCAD 1.371Support lineCAD 1.363
U.S. Dollar-Swiss Franc (USDCHF)
The Swiss franc has been a risk factor and is in a selling trend. Looking at the overall daily chart, the market remains range-bound and does not appear to be making any significant moves. The worst case scenario of a Credit S failure has been averted and the Swiss franc could be slightly bid. The focus will likely be on how far coordinated dollar supply and U.S. bank risk persist.
Estimated rangeCHF 0.9210 – CHF 0.9360Resistance lineCHF 0.933Support lineCHF 0.925
Today’s Important Economic Indicators
Economic Indicators and EventsJST (Japan Standard Time)Canadian Consumer Price Index 21:30U.S. existing home sales23:00
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
Risk Disclaimer
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
