EURUSD reversed from the previous session's losses and rebounded back to above 1.0600 after it found strong buyers nearby 1.0520. For today all eyes will be turning to the ECB's interest rate decision and ECB President Christine Lagarde's speech. Investors and traders are focused on possible measures and changes that the European Central Bank may undertake in today’s meeting.
ECB is expected to raise interest rates by 50 basis points in an ongoing battle against inflation despite the ongoing banking crisis. If the ECB maintains its hawkish stance and decides to hike rates by 50bps then the pair will regain further upside momentum. However, watch for weekly closing above 1.0750 or below the 1.0500 area, which will give a larger confirmation of direction in the long term.
Global stock markets are struggling to regain footing after suffering steep losses in the last few trading sessions. While the European shares and the US stock futures slightly recovered from the previous session's sell-off after a backup plan was introduced for Credit Suisse's worsening financial conditions. Swiss banking giant Credit Suisse Group AG will borrow nearly $54 billion from Swiss National Bank (SNB) to improve its liquidity.
Crude oil prices slightly rebounded after worries about the European banking system eased. However, the overall sentiment remains under pressure as prices seem to be struggling to revive upside momentum as investors remain concerned about the global demand outlook. The EIA crude inventory data showed on Wednesday the US crude oil inventories rose by 1.55 million barrels, more than market expectations of 1.188 million.
In the currency market, the prominent safe-haven currencies the Swiss franc (CHF) and the Japanese yen (JPY) remain the strongest currency pairs of this week. GBPUSD traded modestly higher during the Asian session but failed to extend the upward momentum and it formed a short-term top near the 1.2110 level.
The safe-haven metal hit a fresh monthly high of $1936 on Wednesday as Investors have been buying into the safe-haven metal as global market sentiment remains cautious. Technically, the medium-term trend remains supportive but If the US dollar regains upside strength in the coming days, we could see a pullback in the precious metals.
On the data front, U.S. retail sales fell moderately in February. The Commerce Department said retail sales fell by 0.4 percent in February after spiking by an upwardly revised 3.2 percent in January. On the other hand, the Bureau of Labor Statistics in the US released Producer Price Index in February, which showed a slowdown in producers' inflation.
Moving ahead today, the important events to watch:
US – Housing starts and building permits: GMT – 12:30
Eurozone – ECB interest rate decision and statement: GMT – 13:15
Technical Outlook and Review
EURUSD: For today, considering heavy volatility there are chances the currency pair can rally back to above the key resistance of 1.0700. On the downside, the decline is more extensive, and it will be hard to rule out a run towards 1.0520 and 1.0500 if the pair breaks below 1.0570.
The important levels to watch for today: Support- 1.0570 and 1.0500 Resistance- 1.0650 and 1.0700.
GOLD: The precious metal trades steady above 1920. If the bullish momentum continues, then the next upside level is to watch 1930 and 1935. On the downside, any meaningful pullback now seems to find some support near the 1908 zones, below which the slide could further get extended towards the 1900 and 1895 regions.
The important levels to watch for today: Support- 1908 and 1898 Resistance- 1930 and 1935.
Quote of the day – “When it comes to investing, we want our money to grow with the highest rates of return, and the lowest risk possible. While there are no shortcuts to getting rich, there are smart ways to go about it.” – Phil Town.