Weekly Technical Analysis For February 17th to 21st, 2020
EUR/USD: In last week's Fed Chair Powell's Testimony, Powell signaled that a faster pace of inflation would push the central bank off the sidelines. He also added Coronavirus impacts to China could spill over into the global economy. On Sunday, China reported more than 68K cases of the illness and 1.665 deaths.
The US consumer price index rose 0.2%, in line with expectations last month, while the year-on-year CPI rose to 2.5%, topping forecasts for a 2.3% rise. But this latest PCE inflation report is unlikely to shift the Fed's thinking on monetary policy as its preferred inflation gauge, the core personal consumption expenditures price index remains below the 2% target.
In the upcoming week, the minutes of the European Central Bank (ECB) meeting due Thursday is expected to provide investors with an insight into the European central bank’s thinking on monetary policy.
The European Central Bank left monetary policy unchanged in the last meeting. Christine Lagarde, President of the ECB, said that it will take climate change into its considerations. The crisis may trigger the usage of additional monetary stimulus.
ECB launched a review of its monetary policy strategy, which is the first review since 2003. It is expected to be concluded by the end of 2020. The ECB also predicted euro-zone GDP growth will slow slightly to 1.1% this year from 1.2% in 2019 then pick up in 2021.
In addition to the ECB Minutes, watch out for the Consumer Price Index in the Eurozone. On the year-on-year basis, the Eurozone CPI is expected to remain stable at 2.1%. A higher than expected reading will support the single currency.
The Federal Reserve will release the minutes from its policy meeting on Wednesday. At their last meeting, the Federal Reserve left interest rates unchanged. The FOMC Meeting Minutes may give a more detailed about Fed Outlook for 2020.
Moreover, the economic calendar will bring an update on the health of the U.S. economy, with reports on Building Permits, Housing Starts, NY Empire State, and Philadelphia Fed Manufacturing Index, as well as Existing Home Sales.
The EUR/USD pair showed a downward movement last week. If the selling pressure continues, we will watch 1.0806 and 1.0728 as the daily support levels. On the upside, if the pair goes beyond 1.0876, the next resistance level will be at 1.0930.
Support: 1.0806 - 1.0728 - 1.0623
Resistance: 1.0876 - 1.0930 - 1.0965
GBP/USD: The UK Office for National Statistics will publish the monthly jobs report this week and it will be watched more for what it says about wages than hiring. The UK Unemployment Rate is expected to stay at 3.8%.
The UK CPI Inflation will also be an important release for the Sterling. The UK CPI inflation is expected to rise to 1.5% from 1.3% year-on-year.
The GBP/USD pair showed an upward movement and reached the 1.3046 main level last week. If the pair stays above 1.3046 on a daily basis, the rise may gin more momentum and the key resistance levels can be seen at 1.3136 and 1.3231. On the other hand, if the pair falls below 1.3046, the next support level is holding at 1.2947 again.
Support: 1.2947 - 1.2838 - 1.2768
Resistance: 1.3046 - 1.3136 - 1.3231
USD/JPY: The USD/JPY pair stayed above the 109.72 main support level last week. As long as the pair trades above 109.72 on a daily basis, we will see 110.36 as the main resistance level. In contrast, if the price falls below 109.72, we will see the support level at 109.39.
Support : 109.72 - 109.39 - 109.09
Resistance : 110.36 - 110.93 - 111.52
GOLD: Keep your eye on the main resistance level of 1584 in the Gold Price. In order for the upward movement to continue, it needs to rise and sustain above 1584 on a four hourly basis. At this point, we will see 1590 as the next resistance level. Otherwise, If the price shows a downward movement below 1584, the daily support level will be at 1575 again.
Support: 1575 - 1564 - 1555
Resistance: 1584 - 1590 - 1606
USD/CAD: The USD/CAD pair is currently trading above the main level of 1.3233. If the pair stays above 1.3233 on a four hourly basis, we will see 1.3287 as a daily resistance level. In contrast, If the price drops below 1.3233, we will see the main support level at 1.3181.
Support: 1.3233 - 1.3181 - 1.3123
Resistance: 1.3287 - 1.3344 - 1.3410
NZD/USD: The NZD/USD pair is currently trading above the main support level of 0.6425. If the price stays above 0.6425 on a daily basis, the key resistance level can be seen at 0.6488 again. On the other hand, if the price drops below 0.6386, the next support level will be at 0.6386.
Support: 0.6425 - 0.6386 - 0.6337
Resistance: 0.6488 - 0.6543 - 0.6611
ETH/USD: The ETH/USD is now trading above the key support level of 249.12. As long as the Ethereum Price stays above 249.12 on a four hourly basis, we will watch 280.65 as a daily resistance level again.. On the downside, if the pair drops below 249.12, the next support level will be at 223.31
Support: 249.12 - 223.31 - 211.06
Resistance: 280.65
Brent Oil Futures: We will closely watch the daily resistance level of 57.61 in the Brent Oil Price. In order for the upward movement to continue, it needs to rise and sustain above 57.61 on a daily basis. At this point, we will see 59.25 as the next resistance level. On the downside, if the price moves down below 57.61, the support level will be at 56.47.
Support: 56.47
Resistance: 57.61 -59.25 - 60.54