- The dollar printed a new two-week high while the euro recorded a fresh two-week low as, combined with the strong expectations of FOMC rate hike, the concerns over the White House staff changes were soothed.
- There will be two major central banks with latest monetary policy decisions this week, including FOMC and BOE, both on Thursday. Therefore, Thursday will be an important day for traders to watch.
The dollar rallied again against a basket of currencies and printed a new 2-week high on Friday 16 March as the news that White House chief of staff John Kelly met with some staffers and reassured them there were no immediate personnel changes at this time calmed markets. We will turn our attentions to the euro in the near future as the dollar gapped down sharply due to the delivery of the futures and made distortion.
The euro saw its up move against the dollar met strong resistance at circa its descending long term moving averages while its short term moving averages went down sharply in a divergent state on the 1 hour chart last Friday. Therefore, the single currency printed a fresh 2-week low. Whether or not the shared currency could extend its downtrend will be important to observe.
（EURUSD H1 chart）
Now let’s take a look at the non-USD currencies. The British pound broke briefly below its support at 1.3910 and closed in a Doji candle pattern on the daily chart. Watch for a potential weakness in the short term within its wide range-bouncing. The Aussie dollar fell further to a fresh 3-month low as the commodity currency’s decline turned into one-way bet on the 4 hour chart. The dollar rebounded against the Japanese yen, a safe haven currency, after recording a new weekly low. However, the currency pair rally held below its circa H1-period EMA60. Watch for a potential consolidation of the price action in the short term.
（AUDUSD H4 chart）
As to the precious metals, the gold went down for a third day and its decline accelerated to break its trading range on the week. We saw its long term moving averages expanded further in the bearish mode acting as significant resistance while its short term moving averages turned bearish and divergent again on the 1 hour chart. We should pay attention to a potential extension of the down move after short-term correction.
（Gold H4 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.