March 31st Morning Brief – Good Bye March
Arslan Butt • 3 min read
Happy Friday, traders! The last day of a week and last day of a month always excites me because they come with new opportunities, fresh fundamentals and more volatility for traders. March proved to be a great month and gave us quite a good number of trades. However, it’s not over just yet. Let’s have a look at the opportunities available in the market.
Looking back at the 30th of March Morning Brief, we were absolutely right when we decided to wait for the breakouts in the EUR/USD and GBP/USD on the release of U.S economic figures in the New York session.
Yesterday, the U.S GDP growth for the 4th quarter of 2016 was revised to 2.1%, which is significantly higher than the previous figure of 1.9%. This figure also exceeded the expected 2% GDP growth. As a result, the U.S dollar soared to trade at $100.16, up 0.37% as investors finally found a reason to increase their bets on the greenback.
Top Economic Events To Watch Today
- German Retail Sales m/m (6:00)
- German Unemployment Change (7:55)
- CPI Flash Estimate y/y (9:00)
- Core CPI Flash Estimate y/y (9:00)
- Current Account (8:30)
- Final GDP q/q (8:30)
- MPC Member Haldane Speaks (21:00)
- GDP m/m (12:30)
- Core PCE Price Index m/m (12:30)
- Personal Spending m/m (12:30)
- FOMC Member Dudley Speaks (13:00)
- Chicago PMI (13:45)
- FOMC Member Kashkari Speaks (14:00)
- Revised UoM Consumer Sentiment (14:00)
EUR/USD – The Top Traded Currency Pair
The disappointing inflation data from Spain and Germany failed to shock the market, causing a dent in the demand for the single currency Euro. Moreover, the ongoing global uncertainties, including those caused by Article 50, upcoming elections in the different areas of the Eurozone and the divergence in the monetary policy, is keeping the Euro under pressure.
Currently, the EUR/USD is trading lower at $1.0672 after violating the narrow trading range of $1.07260 – $1.07750. This happened as a result of the optimistic gross domestic product (GDP) figures from the United States, as suddenly the weaker dollar became an attractive currency to invest in.
Today, we have several economic figures from the Eurozone and economists are expecting the realesed figues to be even better than the previous figures.
EURUSD – Hourly Chart
Let me draw your attention to the daily timeframe. We see "Three Black Crows", which demonstrates a strong bearish pattern. It means the EUR/USD could keep trading in a bearish pattern for the next couple of weeks unless it's hit by a strong fundamental. Besides that, the pair is not trading in a bullish channel anymore.
Let's talk about the support and resistance levels. I can see a major support at $1.0670, the price is already here. So, once the market breaks below this level (which seems quite unlikely as the RSI is suggesting an oversold scenario), it will open further room for selling towards $1.06395. Whereas, the upside resistance prevails at $1.07036.
Trading Signal: Traders, I want to buy EUR/USD right now at $1.06700, but the selling trend is pretty strong. It's better to wait for the selling entries. Now, we have three trade ideas:
1st – We can buy now, with a tight stop-loss at $1.0658 and a take profit of $1.0703 and $1.0720.
2nd- After the pullback, we can sell below $1.0735 with a stop loss above $1.0775.
3rd- We can sell below $1.0661 for a quick take profit of $1.0639 while having a stop loss above $1.0705.
Traders, the market is likely to sojourn volatility due to the high impact economic events coming from major economies throughout the trading day. Lastly, the success in Forex largely depends upon money management, make sure to follow it.