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Yesterday, the US dollar received local support based on the data received on the dollar index (DXY) chart, where there was growth by about 0.5%, namely from 91.39 to 91.90. It is noteworthy that the US dollar has been moving around the range of 91.40/92.00 for the sixth trading day, without a change in fundamental factors.
It can be recalled that the Dollar Index (DXY) is the ratio of the US dollar (USD) to a basket of six currencies and is a weighted average of the dollar against the euro (EUR), Japanese yen (JPY), pound sterling (GBP), Canadian dollar (CAD) , Swedish krona (SEK) and Swiss franc (CHF).
Analyzing the dollar index chart everyday, we now understand the general mood of the US currency against its competitors.
What happened on the market in terms of the economic calendar?
The Bank of England held its scheduled meeting yesterday, from which they kept the base interest rate at the same level, that is, at 0.1%, as well as the volume of the bond repurchase program.
According to the BoE's statement, there is currently a significant degree of spare capacity. They also mentioned that the economic outlook, especially the relative movement of supply and demand during the post-pandemic recovery, remains unusually uncertain.
To put it simply, the Bank of England took a "dovish" position without doing anything. In this case, the value of the pound sterling declined during the results of the meeting.
As for statistical indicators, the publication of US weekly data on applications for unemployment benefits should be emphasized. It recorded growth in its volume, instead of the expected decline.
A few hours later, the market reacted to the weak US data. However, the weakening of the dollar was local in nature.
What happened on the trading chart?
In the course of a natural rebound from the area of the psychological level of 1.2000, the EUR/USD pair returned to the range of the variable pivot point of 1.1900. This is where the decline stopped on March 17.
Similarly to the European one, the GBP/USD pair has a similar behavior in the market. But in this case, the psychological level of 1.4000 acted as a resistance, relative to which the price rebounded along a downward course. The natural basis associated with the level of 1.4000 leads to a decline in the volume of long positions and an increase in the short one for the fifth time since this month started.
Trading recommendations for EUR/USD and GBP/USD on March 19
Today, there is no important statistical data for Europe, the UK and the US worth paying attention to. In this case, the market will continue to move based on technical analysis, and there may be a surge in the information flow.
Looking at the EUR/USD pair trading chart, it can be seen that the quote slowed down the decline within the level of 1.1900, which led to an amplitude swing of the pullback. In this case, we do not exclude the local movement of the price towards the lower border of the psychological area of 1.1950/1.2000/1.2050. In turn, the downward development will be considered in the market once the quote is held below the level of 1.1880.
As for the trading chart of the GBP/USD pair, the price fluctuations within the area of the psychological level of 1.4000 (1.3950/1.4000/1.4050) is shown. The natural basis associated with this area is still relevant in the market, so we should not rule out the continuation of downward interest.
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