Equity markets extended gains overnight with the energy sector being the weakest segment on the back of a pull back of oil prices. The US Dollar was flat, gold and oil retreated, while bitcoin and
treasury yields rose.
The following analysis is via LegacyFX Analysts;
USDX: The US Dollar index remains trapped within its two weeks range between 97.70 and 99.42 and is likely to remain subdued in the near term. A breakout from the current consolidation is required to determine the direction of the next leg.
The next potential catalyst that could move the index out of the consolidation is the NFP report due next Friday, which typically triggers some volatility to the market.Overall, the US Dollar index is likely to remain elevated given the hawkish stance of the Fed and its usual
EUR/USD: The rebound from the 1.0960 low has lost momentum and the EUR/USD is trading in a narrow range between 1.1011 and 1.1045. A breakout from the range is likely to occur today and we would be looking to open positions in the direction of the breakout which offers 34 pips profit potential.
In a larger time frame the currency pair is consolidating and a big impulsive move is unlikely this week.
GBP/USD: The rebound from the 1.3000 low pushed the daily and 4H stochastic indicator into overbought territory, which points to a likely pull back in the short-term.
The Cable reached a high of 1.3298 in early Wednesday trade but quickly retreated after the release of the UK annual CPI data for February, which came at 6.2%, beating market expectations of 5.9%. We see a fair possibility of a decline to 1.3200 in the short-term.
USD/JPY: The pair posted a spectacular run over the past two weeks reaching an intra-day high of 121.41 on Wednesday. The daily RSI reached strongly overbought territory suggesting that any upside from here is likely to be limited in the short-term and that the pair is well and truly due for a pull back.
While at this juncture in time there is no clear reversal signal on the chart, a break below minor support of 120.78 would signal a decline to 120.40.