Midweek Market Overview: Leading Up to ADP & NFP

<WikiFX Malaysia Original: Editor – Fion>

The US Dollar:

The daily chart for USD shows a clear rejection from the 99 – 99.500 area once again. Evidently, throughout March, the price has been facing a strong selloff from this price range. This was previously mentioned in our article last week (click here for reference: https://www.wikifx.com/en/newsdetail/202203233834339738.html).

Looking at the market structure, we can see that a double top formation has appeared. If the nearest support around the 97.500 area fails to hold, it is highly probable for USD drop, especially when it is accompanied by a solid retest after the break.

On a side note, there will be ADP and NFP data announcements on Wednesday (UTC+8 12.15pm) and Friday (UTC+8 12.30pm) respectively. Dollar traders should be prepared for some upcoming volatility within these few days.

AUD/USD:

The AUD/USD continues its strong uptrend and is now facing a resistance area around the 0.75 – 0.75500 range as shown on its daily chart. Currently, it is consolidating below this range.

If the US dollar continues to drop after breaking its support level as mentioned above, AUD/USD could move towards the upside with a breakout.

EUR/USD:

It looks like EUR/USD is showing firm signs of reversal on the daily chart with the formation of higher lows after each retracement from the key level of 1.110. This is the third attempt that the price is trying to break above this resistance area.

EUR/USD could have more bullish momentum once Russia and Ukraine achieve a mutual agreement in their peace talks because that signifies the end of chaos in the European Nation, thus potentially bringing Euro back to its pre-war condition.

GBP/JPY:

Recently, a GBP/JPY retraced drastically after hitting the 164.000 level. Zooming out onto the weekly chart, this is a resistance area derived from 2016.

If the Japanese Yen continues to show weakness with the Bank of Japan buying unlimited amount of bonds (previously mentioned here: https://www.wikifx.com/en/newsdetail/202203282494383016.html), it is just a matter of time until GBP/JPY gains enough strength and continues its bullish momentum after a breakthrough of this range.

For the time being, traders could watch out for any potential rebound with the confluences of the Fibonacci tools and/or the Exponential Moving Average (EMA) lines as plotted above because GBP/JPY is still in a strong uptrend on the daily chart.

Gold:

As seen on the daily chart, gold dropped dramatically by over 600 pips from 1966 to 1900 during the last few trading days. It then had an instant rebound of over 200 pips once it touched the 1900 level.

Based on the 2-hour chart, we could deduce the two potential directions that gold could go.

If it stays below the 1928 area, it could continue to head south. On the other hand, if it stands firm above the 1928-1930 area, it could potentially move towards the 1940 range in the near future.

<WikiFX Malaysia Original: Editor – Fion>