Fed keeps the party going

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The latest push to a fresh 2024 high beyond 1.2830 confirms the outlook and opens the door for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should now be well supported ahead of 1.2500.

• R2 1.3000 – Psychological – Strong
• R1 1.2894 – 8 March/2024 high – Medium
• S1 1.2668 – 19 March low – Medium
• S2 1.2649 – 4 March low – Medium

GBPUSD – fundamental overview

Any weakness in the Pound from softer UK inflation data was more than offset by the dovish Fed decision in which the central bank stuck with its projections for three rate cuts in 2024. Key standouts on Thursday’s calendar come from UK public sector net borrowing, German, Eurozone, and UK manufacturing PMIs, the Eurozone current account, the BOE policy decision, Canada housing data, US initial jobless claims, the Philly Fed, and US existing home sales.

USDJPY – technical overview

The market remains confined to a strong uptrend, with sights set on a retest and break of the multi-year high from 2022 at 151.95. A push through this level will open the next major upside extension towards 155.00. Key support comes in at 146.48, with only a weekly close below to delay the constructive outlook.

• R2 151.95 – 2022/Multi-Year high – Strong
• R1 151.82 – 20 March/2024 high – Medium
• S1 148.91 – 18 March low – Medium
• S2 146.48 – 8 March low – Strong

USDJPY – fundamental overview

The fact that Japan markets were closed for holiday on Wednesday didn't do anything to help the Yen's cause, with the currency tracking back down within a stone's throw of the multi-year low from 2022. All of the weakness came from the BOJ decision in which the central bank said it would retain an accommodative policy track despite exiting negative rate policy. However, the dovish Fed decision to offer some temporary relief, with the Yen finding some demand as currencies rallies across the board against the Buck. Key standouts on Thursday’s calendar come from UK public sector net borrowing, German, Eurozone, and UK manufacturing PMIs, the Eurozone current account, the BOE policy decision, Canada housing data, US initial jobless claims, the Philly Fed, and US existing home sales.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6668– 8 March high – Strong
• R2 0.6624 – 21 March high – Medium
• S1 0.6504– 19 March low – Medium
• S2 0.6500 – Psychological – Medium

AUDUSD – fundamental overview

The Australian Dollar has extended its run on Thursday after getting another boost from an impressive Aussie jobs report. This follows a wave of gains in the aftermath of the more dovish Fed decision. Key standouts on Thursday’s calendar come from UK public sector net borrowing, German, Eurozone, and UK manufacturing PMIs, the Eurozone current account, the BOE policy decision, Canada housing data, US initial jobless claims, the Philly Fed, and US existing home sales.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3614 – 19 March/2024 high – Strong
• R1 1.3600 – Figure – Medium
• S1 1.3482 – 20 March low – Medium
• S2 1.3459 – 13 March low – Strong

USDCAD – fundamental overview

The Canadian Dollar put in an impressive recovery on Wednesday, getting help from a slightly more hawkish Bank of Canada Minutes and dovish leaning Fed decision. Key standouts on Thursday’s calendar come from UK public sector net borrowing, German, Eurozone, and UK manufacturing PMIs, the Eurozone current account, the BOE policy decision, Canada housing data, US initial jobless claims, the Philly Fed, and US existing home sales.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6132 – 15 March high– Strong
• R1 0.6100 – Figure – Medium
• S1 0.6025 – 20 March 2024 low – Medium
• S2 0.6000 – Psychological – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has done a good job shrugging off the softer than expected New Zealand growth data out earlier today, with the currency running up on the back of all of the US Dollar selling in the aftermath of a Fed decision in which the central bank kept with its outlook for 3 rate cuts in 2024. Key standouts on Thursday’s calendar come from UK public sector net borrowing, German, Eurozone, and UK manufacturing PMIs, the Eurozone current account, the BOE policy decision, Canada housing data, US initial jobless claims, the Philly Fed, and US existing home sales.

US SPX 500 – technical overview

Longer-term technical studies continue to look quite extended after pushing to fresh record highs, begging for a deeper correction ahead. Look for rallies to be well capped in favor of lower tops and lower lows. Next key support comes in at 5110.

• R2 5300 – Figure – Strong
• R1 5245 – 21 March high/Record – Medium
• S1 5110– 15 March low – Strong
• S2 5058 – 5 March low – Medium

US SPX 500 – fundamental overview

Though we have seen an adjustment of investor expectations towards the amount of rate cuts in 2024, the market still believes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid and pushing record highs. Still, it's important to highlight the fact that the Fed has yet to declare a victory over inflation and could disappoint investors with less accommodative policy than desired going forward. If this happens, stocks could be in for a nasty bearish reversal.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1900 on a monthly close basis ahead of the next major upside extension towards 2500.

• R2 2300 – Round Number – Medium
• R1 2223 – 21 March/Record high – Medium
• S1 2146 – 18 March low – Strong
• S2 2079 – 4 March low – Medium

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less stable and upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an end.