10 March 2020 Morning Session Analysis
Pound gains amid expectation for expansionary fiscal policy.
Pound Sterling extend its gains on yesterday amid increasing optimism that the UK government would implement new expansionary fiscal policy during the upcoming UK budget meeting in order to minimize the damage that caused by the coronavirus while boosting the economic growth in UK. According to Reuters, Britain’s new finance minister, Rishi Sunak, is due to announce his first budget on Wednesday and a fiscal stimulus plan is widely expected by the investors. Expansionary fiscal policy means that the government might reduce taxes while increasing the government expenditures in order to minimize the cost of recessionary. Such policy could improve the consumer spending within the UK region while insinuating the higher demand for the Pound Sterling. However, the gains experienced by the Pound Sterling was limited as some of the investors’ fears that the Bank of England will be cutting its interest rates at least 25 basis points in order to offset the cost of the coronavirus. Nonetheless, at this time investors would need to continue to scrutinize the latest updates with regards of the post-Brexit trade talk in between UK and EU and also a further economic data to gauge the likelihood movement for the currency. On the other hand, the dollar index extends its losses amid expectations that the Federal Reserve will be forced to reduce its interest rate once again in order to cushion the impact from the coronavirus epidemic. As of writing, GBP/USD slumped 0.33% to 1.3085 while the dollar index slumped 0.92% to 95.01.
In the commodities market, the crude oil price appreciated by 5.95% to $31.91 per barrel as of writing. However, the oil market suffered its biggest one-day drop in almost 30 years amid to the price war in crude oil between Saudi Arabic and Russia. On the other hand, the gold price slumped 0.67% to $1668.95. However, the gold price edged higher yesterday amid the rising geopolitical tension between the Saudi and Russia and also the fears of coronavirus outbreak, which stoked a shift in sentiment toward the safe-haven metal.
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Technical Analysis
DOLLAR_INDX, H1：Dollar index was traded higher following prior rebound from the support level at 94.85. MACD which illustrated increasing bullish momentum suggest the index to extend its gains toward resistance level at 95.45.
Resistance level: 95.45, 95.95
Support level: 94.85, 94.30
GBPUSD, H4: GBPUSD was traded lower while currently testing the support level at 1.3055. MACD which illustrated diminishing bullish momentum suggest the pair to extend its losses after it successfully breakout below the support level.
Resistance level: 1.3190, 1.3255
Support level: 1.3055, 1.2950
EURUSD, Daily: EURUSD was traded higher while currently testing the resistance level at 1.1415. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains after it successfully breakout above the resistance level.
Resistance level: 1.1415, 1.1555
Support level: 1.1210, 1.1020
USDJPY, H1: USDJPY was traded higher following prior rebound from the support level at 102.30. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains toward resistance level at 103.60.
Resistance level: 103.60, 104.85
Support level: 102.30, 100.75
AUDUSD, H4: AUDUSD was traded lower following prior retracement from the resistance level at 0.6655. However, MACD which illustrated diminishing bearish momentum suggest the pair to be traded higher in short-term as technical correction.
Resistance level: 0.6655, 0.6745
Support level: 0.6480, 0.6285
NZDUSD, Daily: NZDUSD was traded higher while currently testing the resistance level at 0.6340. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains after it successfully breakout above the resistance level.
Resistance level: 0.6340, 0.6385
Support level: 0.6280, 0.6210
USDCAD, Daily: USDCAD was traded higher while currently testing the resistance level at 1.3660. MACD which illustrated increasing bullish momentum suggest the pair to extend its gains after it successfully breakout above the resistance level.
Resistance level: 1.3660, 1.3765
Support level: 1.3515, 1.3330
USDCHF, H4: USDCHF was traded higher following prior rebound from the support level at 0.9250. MACD which illustrated diminishing bearish momentum suggest the pair to extend its gains toward resistance level at 0.9345.
Resistance level: 0.9345, 0.9425
Support level: 0.9250, 0.9170
CrudeOIL, H1: Crude oil price was traded higher while currently testing the resistance level at 32.95. MACD which illustrated increasing bullish momentum suggest the commodity to extend its gains after it successfully breakout above the resistance level.
Resistance level: 32.95, 35.65
Support level: 30.15, 27.70
GOLD_, H1: Gold price was traded lower while currently testing the support level at 1662.90. However, MACD which illustrated diminishing bearish momentum suggest the commodity to be traded higher in short-term as technical correction.
Resistance level: 1678.95, 1690.05
Support level: 1662.90, 1650.25