End of rises on EURUSD and oil?
24 March 2023
Thursday was another interesting day on the market, with high volatility and promising opportunities. We also got two rate decisions and both of them were rises. The Swiss National Bank hiked the rates by 50bp to 1.5%, despite the Credit Suisse crisis. A few hours later, the Bank of England hiked by 25bp to 4.25%, which was a response to the latest surprising hike in inflation.
At the end of the day, we had another influential event on the market. We heard a testimony of the secretary of the treasury Janet Yellen before the Financial Services and General Government Appropriations. She claimed that the US is prepared for additional deposit actions if warranted; and that important anti-contagion tools may be applied again. Does that mean that there are more banks with problems and we will hear about them soon? We shall see.
Today’s calendar is packed with PMI data from major economies across the globe. We already got the manufacturing PMI from Japan who came better than expected. Still to come are numbers from the Eurozone, UK and US. In addition, we will have a retail sales number from Canada and durable goods orders data from the US. Quite an unusually busy end of the week!
The session on indices yesterday was a real treat for scalpers and intra-day traders. First, we had a big upswing, then a drop to finish with an upswing again. The result of this was the price finishing the day in the same place where it started. The direction was found on other instruments, though. The USDJPY managed to drop below the 131 support and is on the new lows again. The EURUSD reversed sharply, creating a shooting star on the daily chart, which may be an invitation for a mid-term bearish correction.
The USDCAD initially went south, but then performed a V-shaped reversal, canceling the sell signal and triggering the one to buy.
A lot is also happening in the commodities. Gold climbed higher again and the price flirted with the 2000 USD/oz level. The European session started below, but the bullish pressure is still here. On the other hand, oil lost its steam and the price created the same formation as on the EURUSD - a shooting star on the daily chart. This may be the end of the bullish correction and start of another downswing.