US stock markets experienced gains on Wednesday, with tech and financial shares leading the way, as investor risk appetite recovered from recent banking sector turmoil. The financial sector was hit hard by the collapse of three US banks this month but managed to rally on Wednesday, despite reports that the Federal Deposit Insurance Corp. was considering tightening the squeeze on larger banks to help cover the almost $23bn in costs from the bank failures.

In the benchmark, the tech-heavy Nasdaq 100 entered a bull market, rising 20% from a December low. This was an impressive feat, given the recent banking sector turmoil. The S&P500 climbed back above 4,000 with 1.42% daily gain on Wednesday, and all eleven sectors stayed in positive territory, showing that the market regained recovery strength.

The Real Estate and Information Technology sectors performed the best among all groups, rallying with more than a 2% gain daily. This is a significant development, as Wall Street analysts have found it challenging to predict how the stock market will react in the coming months, given the uncertainties surrounding the Fed’s future actions. Their average year-end goal for the S&P 500 has remained constant at 4,050 for three straight months, a phenomenon not seen since 2005.

The Dow Jones Industrial Average rose 1%, and the MSCI world index edged higher with a 0.2% gain for the day. This indicates that investor sentiment is gradually recovering, despite the recent banking sector turmoil.

Main Pairs Movement

On Wednesday, the US dollar showed some signs of recovery as it gained ground against most of its major counterparts. The DXY index rose 0.22% to 102.67, rebounding from a near seven-week low of 101.91 seen last week. Meanwhile, the Japanese yen was particularly volatile as Japan’s fiscal year-end drew near.

The EURUSD was little changed on Wednesday, as ECB rate-setters continued to talk about the need to raise interest rates further, offering support to the Euro. However, the pair slid sharply following touching the daily high of 1.0872 level during the UK trading session, and closed at 1.0844 for the day. On the other hand, the GBPUSD lost upside traction after reaching the daily high of 1.2361 level, and closed at 1.2312 level, experiencing a 0.23% daily loss.

The Gold traded slightly lower at $1,965 per troy ounce as financial markets remained optimistic despite concerns about the banking sector. Additionally, the macroeconomic calendar remained quiet for the third consecutive day, leaving little to motivate speculative interest and making room for some appreciation of the US Dollar. The XAUUSD dropped dramatically during Asian trading session but then hovered in a range from $1961 to $1969 marks during US trading hours.

Technical Analysis

EURUSD (4-Hour Chart)

Based on the early trading session on Wednesday, the EURUSD price has been fluctuating within a narrow range of around 1.0850. However, after the release of the unexpected rising of US data Pending Home Sales (MoM) in February, the EURUSD dropped to 1.0830, which is close to the previous low on Tuesday at 1.08177. The macroeconomic calendar has been sparse in terms of data releases. The European Central Bank had a non-monetary policy meeting, which ended without any statement as usual. ECB officials have been supporting the case of further rate hikes, but there are different views on the banking situation.

Looking at the 4-hour chart, it appears that the bulls are still in control. Technical indicators are above their midlines with modest upward slopes, and the pair is comfortably consolidating above its moving averages, with the 20 Simple Moving Average (SMA) around 1.0800. A test of the Fibonacci support level is possible if there is a definite downward extension below the 20 SMA, although further losses are unlikely in the immediate future.

Resistance levels: 1.0903, 1.0990

Support levels: 1.0748, 1.0669

XAUUSD (4-Hour Chart)

The precious metals market has seen some consolidation this week after significant gains since the start of March. The price of gold (XAU/USD) rose above $1,950 and peaked around the $2,000 resistance level, while the silver price (XAG/USD) has been showing a steady uptrend and is currently trading above $23 with more room for growth before reaching its year-to-date high in January. As of typing this, the gold price is trading at $1,963 with an RSI of 59.83. Gold trading has been volatile in the past two weeks due to events such as banking bankruptcies and high-stakes central bank meetings. However, investors are now looking forward to the next Federal Reserve meeting in May and keeping an eye on the upcoming US Personal Consumption Expenditures Price Index release on Friday and the Chinese Purchasing Managers Index releases.

Although gold is still below its record highs, it has started a short-term consolidation period. According to economists at Credit Suisse, a sustained move above $2,000 is necessary to reinvigorate upward pressure. If gold fails to defend its 55-day moving average, there could be further weakness toward the recent range low at $1,805 before reaching the crucial 200-day moving average.

Resistance: 1980, 2003

Support: 1934, 1914

Economic Data

On Tuesday, the US equity market took a slight hit as investors reassessed their bets on the Federal Reserve’s interest rate policies. The three-day advance of US stocks came to a halt as technology shares declined, while Treasuries saw a slight dip.

Investors have been favoring tech stocks in recent weeks, moving away from financials following the collapse of three US banks. However, this trend has begun to reverse as there is increasing speculation that turbulence in the banking sector will be contained.

As investors gear up for a slew of data on the American economy this week, including the central bank’s preferred measure of inflation, the data is expected to play a role in the Fed’s upcoming rate decision.

In the benchmark, the Nasdaq 100 slumped 0.5%, paring a March advance to 4.7%. Tech stalwarts such as Apple Inc. and Alphabet Inc. were among the biggest drags. The S&P500 fell 0.2%, with six out of eleven sectors staying in negative territory. The communication service dropped 1.02%, performing the worst among all groups. Meanwhile, the Dow Jones Industrial Average fell 0.1%, and the MSCI world index fell 0.1% on Tuesday.

Main Pairs Movement

The US Dollar saw daily losses of 0.42% on Tuesday as easing worries about a banking crisis led investors to favor riskier currencies. The DXY index was heavily sold throughout the day, closing at the 102.43 level by the end of the day.

Daily, the EURUSD saw a 0.44% gain, reaching a four-day high near 1.0850. The positive traction was triggered by the broadly weak greenback, and the pair closed at the 1.084 level. Investors have rising expectations for an unchanged Fed policy, which has helped to support the EURUSD.

The weakness of the US Dollar acted as a tailwind for the GBPUSD on Tuesday. The pair rose 0.45% daily for the day, benefiting from the broader weakness of the greenback.

Gold prices surged with a 0.86% daily gain on Tuesday, trading near a daily high of $1,970.03 per troy ounce. The weakness of the US Dollar supported the XAU/USD pair, which trimmed half of its losses from Monday. However, a better market mood subdued demand for the bright metal. The pair managed to rebound from a daily low of $1950 mark to the $1970 mark in the second half of Tuesday.

Technical Analysis

EURUSD (4-Hour Chart)

On Tuesday, the EUR/USD pair continued its upward trend, hitting a daily high of 1.0840 before the opening of Wall Street. The market’s optimism is fueled by receding concerns about the banking sector’s health, which is benefiting the Euro and high-yielding assets in general. Asian shares ended a two-day losing streak and closed in the green, helping European and American futures stay afloat. Although Treasury yields rose, the US Dollar weakened. The rise in yields can be attributed to falling bond prices in a risk-on scenario. While the Eurozone did not release any significant macroeconomic figures, the United States released the preliminary estimate of the February Goods Trade Balance, which showed a deficit of $91.6 billion, worse than expected, and Wholesale Inventories for the same period, up a modest 0.2% MoM.

The EUR/USD pair has seen two consecutive days of gains, with a steady recovery since it hit 1.0750 on Monday. Buyers are protecting the pair’s downside at around 1.0745, with the 61.8% Fibonacci retracement of the 2022 yearly decline. In the daily chart, the pair is above bullish moving averages, with the 20 Simple Moving Average extending its bullish slope above and also the bullish 100 SMA. Technical indicators are heading north within positive levels and flirting with two-month highs. According to the 4-hour chart, there is an increased chance of upward momentum as the pair has recovered above a mildly bearish 20 SMA, and the 100 SMA has crossed above the 200 SMA.

Resistance levels: 1.0903, 1.0990

Support levels: 1.0784, 1.0669

XAUUSD (4-Hour Chart)

The Russian central bank recently announced that it purchased 1 million ounces of Gold, which has provided support to the domestic Gold industry. However, Commerzbank strategists do not expect the bank to continue purchasing Gold due to the limited success of re-routing exports to Asia compared to Crude Oil. Additionally, the largest buyers of Gold in Russia, the banks, have been affected by sanctions imposed by the West. Despite the increase in Gold reserves, the Gold price remains volatile due to uncertainty over future interest rates. The 10-year US T-bond yield holding above 3.5% has limited the upside for Gold. On Tuesday, Gold settled around $1,950 in a quiet start to trading but gained traction and turned positive, reaching $1,960 amid selling pressure surrounding the US Dollar. The Gold price is expected to be supported in the long term due to the pressure on central banks to fight inflation and avoid a replay of the 1970s. However, short-term movements will be determined by developments in growth and inflation.

Technically, the Gold price appears to be exhibiting a measured move pattern resembling a zig-zag pattern consisting of three waves, starting from the $2,003 highs. In this pattern, waves 1 and 3 typically have the same length or a Fibonacci ratio. This suggests that XAU/USD may decline towards the support level at the $1,934 March 22 lows, which could also function as the neckline for a bearish double-top pattern.

Resistance: 1980, 2003

Support: 1934, 1914

Economic Data

Financial stocks provided a much-needed boost to US stocks on Monday, with Treasuries retracting due to a decrease in concerns over banking turmoil. However, tech shares took a hit after experiencing a surge in the previous week. The purchase of Silicon Valley Bank by First Citizens BancShares Inc. caused a gauge of regional lenders to increase by approximately 2.5%, which, in turn, led to First Republic Bank experiencing a jump. The Bloomberg report about US authorities considering expanding an emergency lending facility also contributed to this surge. Despite the weekend bringing some relief to the banking sector, it will continue to be closely monitored, as a gauge of regional US banks has lost approximately 30% since early February.

The S&P 500 index saw a rise, with financial firms increasing by over 1%, and energy producers also making gains. On the other hand, the Nasdaq 100 ended 0.7% lower, capping a two-week advance. The two-year Treasury yield surpassed 4%. Eight out of eleven of the S&P500 stayed in positive territory, with the Energy and Financial sectors rallying by 2.1% and 1.4% respectively, on a daily basis.

Main Pairs Movement

On Monday, efforts by authorities to ease concerns about the global banking system helped calm investor nerves, resulting in the dollar reaching a five-day high against the Japanese yen. However, the DXY index remained within a narrow range against most major currencies as investors appeared hesitant to place big wagers in either direction. This hesitation was due to their need for clarity on the fallout from the recent collapse of two U.S. lenders and the rescue of Credit Suisse.

GBPUSD gained 0.44% for the day due to market positioning suggesting a 50% chance the Bank of England (BOE) will hold rates steady, and a 70% chance the US Federal Reserve will do the same at their respective next policy meetings. Meanwhile, EURUSD remained on an upside tendency all day and closed with a 0.35% daily gain on Monday.

Gold experienced a 1.09% daily loss due to investors moving away from safe-haven assets. Despite this, the sentiment was positive at the start of the week amid easing concerns related to a global banking crisis. XAUUSD faced heavy selling pressure during the UK trading session but managed to rebound from a daily low level of the $1944 mark to close at the $1956 mark.

Technical Analysis

EURUSD (4-Hour Chart)

The EUR/USD pair saw a slight increase on Monday, moving within a tight range and rebounding toward the 1.0780 area. It is currently trading at 1.0782, with a daily gain of 0.22%. The weaker US Dollar across the board and the US government’s additional support to the local financial system helped the market sentiment recover and kept the EUR/USD pair in positive territory. The news related to financial stability also provided some temporary relief to markets on Monday. In the Eurozone, the Business Climate in Germany improved to 93.3 for March, according to the IFO Institute.

From a technical aspect, the RSI indicator is currently at 58, indicating that the bulls are gaining strength as the RSI heads north after bouncing around its midline. As for the Bollinger Bands, the price has witnessed some buying interest and rose towards the moving average, suggesting that some upside movements can be expected. We believe that the market will remain bullish as long as the 1.0748 support line holds, and technical indicators also remain within positive levels.

Resistance: 1.0834, 1.0903

Support: 1.0748, 1.0669

XAUUSD (4-Hour Chart)

On Monday, as easing bank stress lessened Gold’s safe-haven appeal, along with reports of falling demand from India, the XAU/USD pair saw heavy selling pressure and dropped sharply to a daily low below the 1,948 mark during the US trading session. The Gold price is currently trading at 1,958, losing 1.06% daily. The acquisition of Silicon Valley Bank (SVB) by First Citizens Bancshares Inc has limited the damage from SVB’s failure, reducing global banking fears and translating into a rise in US Treasury bond yields. This exerted bearish pressure on the Gold price and lessened demand for safe-haven Gold. This week’s economic calendar highlights await on Friday with Chinese PMIs and the US Personal Consumption Expenditures (PCE) Price Index.

From a technical aspect, the RSI indicator is currently at 48, suggesting the bullish tilt in the short-term technical outlook as the RSI has rebounded sharply towards the mid-line. As for the Bollinger Bands, the price regained some upside traction and rebounded higher, indicating that some upside movements can be expected. We believe that the market will be slightly bullish as long as the $1,934 support line holds. The rising RSI indicator also reflects bull signals.

Resistance: 1980, 2003

Support: 1934, 1914

Economic Data

The US stock market closed higher on Friday after regulators assured investors of financial stability, while speculation grew that policymakers will have to consider a rate cut to prevent a recession. Amid concerns over the recent failure of some US regional lenders and the near-collapse of banking giant Credit Suisse Group AG, global authorities have been trying to instill calm in financial markets. Despite some banks coming under stress, top US regulators confirmed that the overall financial system remains sound.

Market participants reacted to the reassurance by abandoning wagers that the Fed will raise interest rates in May and added to bets that its next shift will be a rate cut as early as June. However, Fed Chair Jerome Powell stated that cuts are not his “base case.” Similarly, traders no longer price in additional quarter-point rate hikes for the ECB and the Bank of England. The move came as global bonds rallied, with Treasury two-year yields falling to the lowest level since September.

The benchmark S&P500 index rallied with a 0.56% daily gain following a slide that reached 1% in the first hour of trading. Nine out of eleven sectors of the S&P500 remained in the positive territory, showing promising signs of economic recovery. However, the financial sector failed to stay in the positive territory, as First Republic Bank tumbled once again, extending this year’s rout to 90%.

On the other hand, the Nasdaq 100 rose 0.3%, while the Dow Jones Industrial Average moved upward by 0.4%. Nonetheless, the MSCI world index slid by 0.2% on Friday, indicating a mixed performance across global markets.

Main Pairs Movement

The US dollar saw a 0.57% surge on Friday, despite speculation that the Fed may end its rate-hiking cycle earlier than previously expected. This was due in part to Fed Chair Jerome Powell indicating that such a move was under consideration by central bank policymakers last week. The DXY index witnessed significant trading activity during the European trading session, reaching a daily high of 103.36 before losing bullish momentum and closing at 103.12.

The EURUSD pair experienced a daily loss of 0.66% on Friday, despite hawkish talks from the European Central Bank (ECB). The pair fell sharply during the European trading session, then managed to rebound from a daily low of 1.0713 to 1.0759 in the American trading hour.

The GBPUSD pair slid 0.44% on Friday, closing at 1.2229. The drop in value may have been influenced by market uncertainty and volatility.

Gold prices saw a daily loss of 0.76% on Friday due to the strength of the US dollar. The XAUUSD witnessed heavy selling pressure during the American trading session, falling below the $1970 mark and struggling to stay around the $1975 mark.

Technical Analysis

EURUSD (4-Hour Chart)

On Friday, the EUR/USD currency pair experienced a significant decline, dropping to a four-day low below the 1.0730 mark during the European session. This was due to a risk-averse market environment, with concerns over a potential banking crisis and unimpressive PMI data releases from the Eurozone and the United Kingdom. The pair is currently trading at 1.0757, posting a 0.65% loss on a daily basis.

The US Dollar has been stronger across the board, supported by the upbeat PMI data releases from the US, which indicated an acceleration of output to the fastest since May of last year. This has boosted the safe-haven US Dollar and undermined the EUR/USD pair.

The RSI indicator currently stands at 45, suggesting that the downside is more favored, as the RSI stays below the mid-line. The Bollinger Bands also indicate a continuation of the downside trend.

Overall, it is expected that the market will be bearish, as the pair tests the 1.0735 support level. If this level is broken, the downward correction could extend toward 1.0621.

Resistance: 1.0834, 1.0903

Support: 1.0735, 1.0621

XAUUSD (4-Hour Chart)

The XAU/USD pair climbed above the $2,000 mark in the early American session on Friday but struggled to maintain its position and reversed its direction towards the $1,990 area during the US trading session. The Gold price is currently trading at $1,995, rising 0.09% on a daily basis. The stalling in Gold’s intraday rally was mainly due to pressure from a strengthening US Dollar, which was supported by a sharp fall in the equity markets and disappointing manufacturing PMIs from the Eurozone and the UK, reviving worries about looming recession risks and lifting demand for the safe-haven US Dollar.

However, the Federal Reserve’s hints of a pause to interest rate hikes could act as a headwind for the greenback and provide some support to the Gold price.

For the technical aspect, the RSI indicator currently stands at 53, suggesting a bearish tilt in the short-term technical outlook. The Bollinger Bands also indicate some downside movements can be expected.

Overall, it is expected that the market will be slightly bearish as long as the $1,989 resistance line holds. A new bull trend might be starting if the pair breaks above the $1,989 resistance.

Resistance: $1,989, $2010

Support: $1,968, $1,933

As the first quarter of 2023 draws to a close, many countries are gearing up to release some major economic data. The US is scheduled to publish its Consumer Confidence (CPI) and Core PCE Price Index reports, while Australia and Germany will be releasing their CPI data. With investors and traders globally eagerly waiting for these reports, you can expect some serious market movements. 

Here are key events to watch out for:

CB Consumer Confidence | US (March 28)

The US CB Consumer Confidence fell to 102.9 in February 2023.

Analysts anticipate it to drop further to 101 in March 2023.

Consumer Price Index (CPI) | Australia (March 29)

Australia’s monthly CPI rose 7.4% in January 2023, but still lower than the 8.4%  rise for the year to December 2022, signifying stubborn high inflation. 

For February 2023, analysts expect it to increase by 7.6%.

Prelim Consumer Price Index (CPI) | Germany (March 30) 

The CPI in Germany increased 0.8% in February 2023, easing from a 1% rise in the previous month.

For March 2023, analysts expect the index to increase by 1.5%.

Gross Domestic Product (GDP)  | Canada (March 31) 

Canada’s GDP shrank by 0.1% in December 2022, following a 0.1% increase in November 2022. Analysts expect the Canadian economy to increase by 0.3% in January 2023.

Core PCE Price Index | US (March 31)

Core PCE prices in the US, which exclude food and energy, jumped by 0.6% month-on-month in January 2023, the most since August, following an upwardly revised 0.4% increase in the previous month.

For February, analysts expect the index to increase by 0.6%.

Sydney, Australia, March 25, 2023 – VT Markets, a next-generation multi-asset broker, hosted their highly anticipated Gala Event in Bangkok, Thailand on 11 March, 2023. The function was held to celebrate the brokerage’s success in 2022 and to reaffirm their strong ties with key partners in the Southeast Asia region.

The night was filled with mesmerising live performances, lucky draws and incredible prizes. During the Awards and Gala Night segment, VT Markets expressed gratitude to their partners, clients and stakeholders for their collaborative efforts that enabled the brokerage to maintain their competitive edge and achieve record-breaking milestones. Their partners were honoured for their exceptional contributions to the success of VT Markets in the region, making it a truly unforgettable experience for all attendees.

“We are immensely proud of our achievements in 2022 and this Gala Event serves as a token of our appreciation to our dedicated partners and clients who have contributed to our remarkable success,” said the Managing Director of VT Markets. “This year, we’re excited to introduce a series of new products and services designed to further enhance the trading experience of our clients while cementing our position as a trusted partner in Southeast Asia. We also look forward to having more such events around the world.”

On the back of the overwhelmingly positive feedback, VT Markets plans to expand the event to accommodate a greater number of esteemed partners and invitees, ensuring that the upcoming gala will be even more impactful and memorable.

As the company continues to grow its presence in the SEA region through strategic partnerships, it remains committed to fostering a supportive, collaborative and innovative environment where all partners thrive. This event is just one example of this unwavering commitment, solidifying the brokerage’s position as a leader in the financial services industry.

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Despite earlier losses, the US stock market made a significant recovery as traders flocked to some of the world’s largest technology firms, viewed as a reliable haven amidst economic uncertainty and market volatility. In the wake of recent banking instability, these technology stalwarts have generally outperformed other sectors. Despite Treasury Secretary Janet Yellen’s assurances to lawmakers that further steps would be taken to safeguard deposits, banks experienced a decline in value. It is notable that, in the last week, banks only slightly reduced their borrowings from two Federal Reserve backstop facilities, indicating that financial institutions are taking advantage of the central bank’s liquidity in the aftermath of recent market upheaval.

Mega-cap technology firms such as Apple Inc. and Microsoft Corp. saw gains that brought the Nasdaq 100 close to a bull market, rising almost 20% from its December low. Meanwhile, the S&P500 remained largely unchanged on Thursday, with only two out of eleven stocks showing positive performance. Communication services and information technology, however, experienced a rally, with gains of 1.83% and 1.65% respectively. The Dow Jones Industrial Average also edged higher by 0.2%, and the MSCI world index saw a 0.5% rise on Thursday.

Main Pairs Movement

On Thursday, the dollar bounced back after earlier losses when the U.S. Federal Reserve hinted that it might not increase interest rates anytime soon. Meanwhile, the Swiss National Bank and Bank of England continued with their plans to raise interest rates. The DXY index spent most of the day fluctuating between 102.0 and 102.65, eventually closing at 102.6.

The EUR/USD, which had been on a five-day winning streak, lost ground as the U.S. Dollar regained strength. Towards the end of the Wall Street session, concerns over the banking industry sent Treasury bonds and the dollar higher, resulting in a drop for the pair. Although it had reached a high of 1.0933 earlier in the European session, it fell below 1.0830 in New York, losing most of the gains made after the FOMC meeting.

Gold prices continued to surge higher and traded around $1,995 per troy ounce on Thursday. The XAU/USD pair extended its post-Fed rally as the U.S. central bank hinted at a dovish approach during its Wednesday meeting, causing a sell-off of the dollar. The pair saw fresh activity during the early American trading session and closed with a daily gain of 1.18%.

Technical Analysis

EURUSD (4-Hour Chart)

On Thursday, the EUR/USD pair initially climbed to a multi-week high of around 1.0930 after the release of US data. However, the pair lost its bullish momentum and retreated below 1.0900, currently trading at 1.0893, with a daily gain of 0.36%. The US Dollar’s weakness across the board due to falling US Treasury bond yields and risk flows, following the Fed’s dovish stance, has kept the EUR/USD pair in positive territory.

After the Fed’s March policy meeting, the US Dollar continued to weaken as the central bank raised its policy rate by 25 basis points to the range of 4.75-5%. In the US economic calendar, the US weekly initial jobless claims fell to 191K in the week ending March 18, which was better than the market’s expectations and suggests a stronger labor market than anticipated. In contrast, the consumer sentiment in the Eurozone weakened slightly with the Consumer Confidence Indicator decreasing to -19.2.

From a technical perspective, the RSI indicator sits at 758 indicating possible short-term corrections. However, the price has maintained its upside momentum, moving alongside the upper band of the Bollinger Bands. Hence, a continuation of the uptrend can be expected. Overall, the market may turn slightly bearish as long as the resistance line at 1.0903 holds. If the pair breaks above this resistance, further advances toward 1.0962 are possible.

Resistance: 1.0903, 1.0962

Support: 1.0798, 1.0735

XAUUSD (4-Hour Chart)

During Thursday’s trading session, XAUUSD experienced a 1.24% increase, rebounding strongly after a brief dip due to lower-than-expected jobless claims. Traders bought the dip after the release of Initial Jobless Claims data, which showed that fewer Americans are signing up for unemployment benefits than anticipated, causing a spike lower. As of now, XAU/USD is trading up on the day at $1,994.

Gold prices rose significantly after the March FOMC meeting on Wednesday when the US Federal Reserve suggested that tighter credit conditions due to banking stress could help bring down inflation. The next significant release on the economic calendar for XAUUSD will likely be the US Durable Goods Orders, which track the sale of big-ticket items. This data is scheduled for release on Friday, March 24, at 12:30 GMT and is expected to show a 0.6% rise in MoM in February from the previous month -4.5%. The core figure, which excludes transportation and defense, will also be of interest to investors, with the former expected to rise by 0.2% and the latter by 0.0%.

From a technical perspective, the uptrend that began at the start of March remains intact, as reflected in the 4-hour chart above. The underside of the just-broken trendline is likely to provide an initial target and resistance at $1,991, and the Gold price will probably pull back at that level. However, an eventual rally all the way to the yearly highs at $2,010 is quite possible. An upside break will call for a test of Tuesday’s high at $1,985, above which the $2,000 round figure will be challenged.

Resistance: $2,010, $2,050

Support: $1,968, $1,935

Economic Data

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On Wednesday, the US stock market experienced a significant downturn as investors were hit with a double dose of stress. Treasury Secretary Janet Yellen’s remarks on the state of the banking system rattled bank shares, while Federal Reserve Chairman Jerome Powell dashed hopes for rate cuts shortly. This sent the financial sector into a tailspin and weighed on the broader stock indexes.

During her testimony to lawmakers, Yellen stated that the government is not considering providing “blanket” deposit insurance to stabilize the banking system. This sent financial shares plummeting and caused broader stock indexes to suffer as a result. Investors were already on edge due to inflation concerns and rising interest rates, and Yellen’s remarks fueled the fire.

Adding to investors’ concerns, Powell also stated that he is prepared to keep tightening until inflation shows signs of cooling. The market had initially risen as the Fed delivered the expected 25 basis-point hikes and kept its year-end rate projection intact. However, Powell’s comments caused the market to give up its gains and turn negative.

In a broad-based selloff, the S&P 500 erased a rally that had approached 1% and finished the day with a 1.7% slide. All eleven sectors of the S&P 500 stayed in negative territory, indicating a pessimistic market mood. It’s worth noting that all 22 stocks in the KBW Bank Index retreated, with the measure of US financial heavyweights down almost 5%.

Main Pairs Movement

On Wednesday, the US Dollar experienced a significant drop to its lowest level in almost seven weeks after the Federal Reserve raised interest rates as expected. However, a change in the bank’s language indicated a potential policy shift that could lead to the bank reaching its terminal rate sooner than expected. As a result, the DXY index fell by almost 0.8% and closed at a level of 102.54.

The EURUSD pair surged by 0.82% on a daily basis after the President of the European Central Bank, Christine Lagarde, mentioned that underlying inflation dynamics remain strong and that they have not committed to raising interest rates further or finished hiking. The pair rallied dramatically following the Fed’s interest rate decision and closed at a level of 1.0856 on Wednesday. Meanwhile, the GBPUSD pair earned a 0.42% daily gain and closed at a level of 1.2262.

Gold also experienced a significant gain of 1.55% on Wednesday as US Treasury Secretary Janet Yellen’s comments suggested no out-of-the-line support for United States banks, which seemed to weigh on Treasury bond yields and propel the XAU/USD price. The yellow metal surged with a 1.26% daily gain and closed at the $1970 mark for the day.

Technical Analysis

EURUSD (4-Hour Chart)

On Wednesday, the EUR/USD pair continued to rise for the fifth consecutive session, nearing the 1.0800 area prior to the US session and posting a daily gain of 0.18%. This rise was mainly due to the weaker US Dollar, as US Treasury bond yields experienced a sharp decline. The markets are expecting the Federal Reserve to announce a 0.25% hike in the Fed Funds Rate to a target range of 4.75%-5.00% during the meeting. However, traders believe that the Fed cannot be as aggressive as it would like to be due to the international banking crisis triggered by the collapse of Silicon Valley Bank. In the Eurozone, the European Central Bank President, Christine Lagarde, has pledged to bring down inflation, as there is no clear evidence that underlying inflation is trending downwards.

From a technical standpoint, the RSI indicator stands at 80, indicating that the bulls are in control, as the RSI is entering the overbought zone. The price has maintained its upward momentum and moved alongside the upper Bollinger Band, suggesting that the upside trend may continue. Overall, we expect the market to remain bullish as the pair tests the 1.0903 resistance level. However, there may be a downward correction in the near term before the pair climbs higher.

Resistance: 1.0903, 1.0962

Support: 1.0798, 1.0735

XAUUSD (4-Hour Chart)

On Wednesday, XAUUSD stabilized around $1,940 ahead of the Federal Reserve’s rate-setting meeting, while Wall Street’s main indexes struggled for direction due to uncertainty in the banking sector. Traders have lowered their expectations for the interest rate hike to 25 basis points, citing concerns about liquidity in the banking sector and the Fed’s aggressive monetary tightening over the past year as reasons for the crisis. At the time of writing, the price of gold is trading at $1,948.70.

From a technical perspective, the 20-period moving average at $1,964 is currently providing support for the market. If this level is breached, we could see further weakness toward the recent range low at $1,933. On the other hand, if gold breaks above the recent retest of $1,985, it could gain further upside momentum to reach above the $2,000 level.

Resistance: 1985, 2010

Support: 1933, 1898

Economic Data

Wall Street’s fear gauge, the VIX, saw its largest two-day plunge since May as the recent financial turmoil eased, resulting in a rebound of stocks. This surge in banks and assurances from authorities has restored a sense of order to the market for the time being. As the Federal Reserve decision approaches, traders are anticipating another 25 basis-point hikes, indicating officials’ commitment to battling inflation and maintaining financial stability. The uncertainty over the Fed’s decision is currently among the highest since the pandemic sparked emergency rate cuts in 2020. Policymakers are also expected to provide updated rate projections for the first time since December, which will offer guidance on whether additional hikes can be expected this year.

In the benchmark, the S&P 500 topped 4,000 and extended its advance above the key 200-day moving average. The Cboe Volatility Index, which briefly exceeded 30 last week for the first time since October, plummeted to around 21. This led to every stock in a measure of US financial heavyweights climbing, with First Republic Bank surging almost 30% due to optimism over a new plan under discussion to aid the regional lender. Furthermore, seven out of eleven sectors stayed in positive territory, indicating an improvement in market risk sentiment.

For investors, the recent rally in the market and decline in the VIX could signal a return to a more stable investing environment. However, it is important to note that market conditions can change rapidly, and investors should remain vigilant in monitoring their portfolios. As the Fed’s decision approaches, investors should be prepared for potential market volatility. Additionally, it may be wise to consider diversifying portfolios to mitigate potential risks.

Main Pairs Movement

On Tuesday, the dollar pared earlier losses as traders considered the possibility that banking stress could prevent the Federal Reserve and Bank of England from hiking interest rates much further or at all later in the week. The DXY index edged lower with 0.07% daily losses, experiencing some selling during the European trading session before climbing to the 103.2 level in the middle of the American trading hour.

Meanwhile, the GBPUSD dropped with 0.5% losses on a daily basis, marking the first negative day in consecutive four days. Mixed concerns over the Brexit deal’s acceptance and hawkish Fed bets teased sellers, leading to a drop to a daily low of 1.2179 level in early US trading hours, before recovering to the 1.2220 level. In contrast, the EURUSD surged to a level above 1.0780 and closed at 1.077 with a 0.44% daily gain on Tuesday.

However, gold slumped with 1.96% losses on a daily basis, as investors remained anxious ahead of the key Federal Reserve (Fed) Interest Rate Decision. The market mood is fragile, and any incident could trigger wild market reactions. The XAUUSD faced strong corrective pullback pressure for the day, falling to a daily low of the $1935 mark during the middle of the American trading hour.

Investors are keeping a close eye on the Fed’s decision, as it could have a significant impact on market conditions. As always, it is essential for investors to remain vigilant and closely monitor their portfolios to mitigate potential risks.

Technical Analysis

EURUSD (4-Hour Chart)

On Tuesday, the EUR/USD pair rose higher, with buyers entering the market ahead of the European session. The pair continued its recent rally, reaching the 1.0780 area, driven by a persistent hawkish narrative from some ECB speakers. The EUR/USD pair is currently trading at 1.0765, posting a 0.45% gain on a daily basis. The positive sentiment in the financial markets and the weaker US dollar are also contributing to the pair’s rise.

Traders are anticipating that the Fed may cut rates due to the failure of two banks in the United States and another on the brink of default, which has shifted global central banks’ interest rate increase expectations. In the Eurozone, measures to support the global financial system and news that JPMorgan Chase is assisting First Republic Bank have helped the market mood recover, providing support to the shared currency.

From a technical standpoint, the RSI indicator currently stands at 65, indicating that the chances favor the bears as the RSI begins to turn south below 70. The price failed to extend its upside traction and retreated from the upper band of the Bollinger Bands, suggesting that some downside movement may be expected. Overall, the market is expected to be bearish as long as the 1.0790 resistance line holds. However, a break above this resistance could open up the possibility of additional gains.

Resistance: 1.0790, 1.0830

Support: 1.0730, 1.0688

XAUUSD (4-Hour Chart)

The XAUUSD has stopped its upward trend and has started heading south this week due to improvements in risk appetite and rising US Treasury bond yields. At the time of writing, the gold price is trading at a day low of $1,941 and continues to trend downwards. Traders’ fears have calmed in the last 48 hours after the UBS takeover of Credit Suisse, and US banks have continued to try to stabilize First Republic Bank. The Federal Reserve is expected to begin its March monetary policy meeting, with traders anticipating a 25 bps rate hike as Powell and Co. continue their efforts to curb stubbornly high inflation. Another reason for gold’s fall is the rising US Treasury bond yields, with the US 10-year Treasury bond yield up nine bps at 3.58%. The 10-year Treasury Inflation-Protected Securities, a proxy for US Real Yields, stands at 1.351% after tumbling as low as 1.142% on March 16.

From a technical standpoint, the XAUUSD’s daily chart indicates a bullish bias in the yellow metal. However, the price action in the last three days could form an evening star candlestick chart pattern, indicating that gold may drop in the near term. The first support would be the March 15 daily high turned support at $1933, followed by the $1914 barrier. Once cleared, the 20-day Exponential Moving Average (EMA) at $1892 is next. The RSI sits at 62.

Resistance: 1958, 1996

Support: 1933, 1914

Economic Data