Are the problems in the banking sector over?

Forex Signals Brief for March 27: Watching Out for Surprises This Week

Posted Monday, March 27, 2023 by
Skerdian Meta • 3 min read

Last Week’s Market Wrap

Last week started on a positive note, as the banking crisis was being tackled by authorities, particularly in Europe, with the Credit Swiss being taken over by UBS. The positive momentum continued, with several major central banks announcing further rate hikes. The Federal Reserve and the Bank of England raised rates by 25 basis points (bps), to 5.00% and 4.25% respectively.

The Swiss National Bank raised rates by 50 bps to 1.50%, although they’re coming from behind in this race. Despite the rate hikes, markets saw this round as a dovish hike for central banks, which was positive for risk sentiment. As a result, stock markets and risk currencies rallied higher until the last two days of the week, when risk sentiment started to soften again, with problems in the banking sectors still continuing and we saw a retreat in risk assets ahead of the weekend.

This Week’s Market Expectations

This week is light compared to last week regarding economic events. Although there are some economic released which might give markets a shake, but nothing to change the sentiment. We have the CPI inflation report from Australia on Wednesday morning which should show further slowdown, followed by China’s Manufacturing and non-Manufacturing PMI reports to end with the Eurozone CPI inflation which is expected to show to 7.1% nd the Canadian GDP. Although, we are watching out for more contagion and effects from the banking crisis,

Forex Signals Update

Last week the volatility was high, especially after the FED rate decision, sending the USD tumbling lower and risk assets surging higher, before retreating toward the end of the week. We opened 26 trading signals in total, closing the week with 12 winning signals and 9 losing ones, with a 66/34% win/loss ratio.

The $2,000 Level Still Rejecting GOLD 

Gold resumed the bullish momentum and surged higher in the third week of this month as the banking crisis hit Europe and it pierced above $2,000 on Monday last week. But, retreated lower as the crisis abated, but the sentiment remains uncertain and buyers retested the $2,000 level. Although they continue to be rejected above there, so we will see if buyers cam push and hold above that level this week.

XAU/USD – Daily chart 

EUR/USD Remains Supported   

Earlier this month, the price of crude Oil decreased and fell below the support level of $70, dropping to $64.30 on Monday due to the banking crisis in Europe. The Swiss Credit bank failed and was acquired by one of its competitors, UBS bank. However, the authorities intervened and this improved market sentiment. As a result, on Monday, oil prices began to recover after reaching their lowest levels in 15 months. The May delivery Brent contract continued to rise to $40 per barrel on Thursday due to the bullish momentum, while the value of the US dollar decreased. The US WTI crude also increased to $71.70 before eventually declining again.

WTI Oil – Daily chart

Cryptocurrency Update

Buyers still remain strong in cryptocurrencies as the buying pressure continues, with all the uncertainties in the traditional banking sector. They made new highs for the year last week, but we saw a retreat ahead of the weekend. Although the retreat has been shallow and we’re likely to see one more bullish wave soon.

BITCOIN Hanging Around $28,000

Bitcoin peaked above $28,000 early last week but retreated lower by the middle of the week, falling below $27,000. Although the 50 SMA (yellow) held as support on the H4 chart. The retreat stopped there and we saw a bounce off that moving average above $28,000 again, so BTC is sticking to that level, just below $30,000.

BTC/USD – 60 minute chart

ETHEREUM Holds Above Support

In January, Ethereum experienced a bullish reversal as it surpassed moving averages, which later turned into support, especially the 20 SMA (gray) on the daily timeframe H4 chart. The 20 SMA became a support level that prevented ETH/USD from dropping too low, even during retreats. Earlier this week, the support level above $1,700 held, and yesterday we saw a significant rebound. As a result, we decided to take a profit on our buy ETH signal.

ETH/USD – H4 chart
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments