Forex

In March 2024, the forex market was mostly obsessed with deceptive macroeconomic narratives. One suggests the US economy is poised to accelerate, sparking inflationary pressures. Another claims persistent inflationary pressures could lead the Fed to tighten monetary policy, potentially triggering a recession.

In reality, there is no proof that the economy is speeding up again, that inflation is increasing, that inflation has become ingrained, or even that the Fed will soon tighten policy.



The early resistance for EUR/USD is expected to be found around the March high of 1.0981 (March 8), followed by the weekly high of 1.0998 and the critical resistance of 1.1000. If the market decides to test the December 2023 high of 1.1139, it could result in an extended bullish trend for EUR/USD from this point.

However, a more significant correction in EUR/USD is possible; it might first target the year-to- date low at 1.0700 before perhaps testing the lows recorded between October and November 2023, close to 1.0500.

GBP/USD remained overall bearish in March as the price failed to regain its position above the 50 EMA and kept testing the support at 1.2603. A break of this support level may push the price to a further downside target near 1.2571.

The initial upside obstacle for GBP/USD will appear near the upper line of the Bollinger Band, at 1.2655. A break above the latter would reveal the 100 EMA near 1.2685. Further north, the next obstacle is expected near the March 18 high of 1.2745 and the psychological resistance at 1.2800.

Following the Bank of Japan's dovish stance, the Japanese yen receives a fresh supply in late March. From a technical standpoint, any following move-up may encounter stiff resistance and be halted near the 152.00 level. The aforementioned handle should serve as a crucially important point, and if cleared convincingly, it will be viewed as a new trigger for optimistic traders.

According to multiple trend oscillators, the price is still in the positive zone on the daily chart. Additionally, the USD/JPY pair may extend its well-established uptrend that began in January 2023 and climb further higher to the round figure of 153.00.

The AUD/USD price moves in a narrow, sideways trajectory before stabilizing at the 0.6525 mark. Stochastic shows a severe lack of positive momentum, suggesting that the bearish trend may resume. Breaking the support at 0.6500 remains a primary bearish target, followed by a long-term support zone between 0.6450 and 0.6410.

Commodities

The Gold price reflects a short-term technical view that favors buyers, suggesting that the "buy the dip" trade will probably continue. XAU/USD retains the measured target of $2,251 in sight as long as the bull flag is still in effect.

The price must close each day over the $2,200 barrier to reach that level. If acceptance rises above that point, the record high of $2,223 is in jeopardy. There may be more upward potential as the 14-day RSI approaches the overbought barrier.

Silver price kept consolidating within the $24.32 - $25.00 range throughout the fourth week of March. This demonstrates a lack of decisiveness among market players.

The 20-day Exponential Moving Average (EMA), which shows a sideways trend, is still stuck around $24.60 concerning the market price. The RSI shows a significant shrinkage in volatility as it oscillates in the 40.00–60.00 zone.

Crude oil (WTI) price is still holding above its 200-day moving average and has maintained its breach above the crucial $79 – $80 region. Additionally, previous sell-offs have been progressively milder, suggesting a strong bullish tendency. With a strong breakout above the $79.00 threshold and the psychologically critical $80.00 mark earlier this month, the technical picture is positive.

In the upcoming days and weeks, prices may rise toward the mid-$80s if WTI maintains its support above these levels. The next potential upside target is $84.40, which coincides with the previous big downward swing's 61.8% Fibonacci retracement.

Indices

The US Dollar Index struggled to gain traction against its competitors due to the rising risk appetite. DXY fluctuates within a small range below 104.50 on 28th March. US stock index futures are trading slightly lower, while the 10-year US Treasury bond yield continues its sidelined move above 4.2%.

The Dow Jones Index is still rising, and bears are currently contained by investors' expectations that the Fed would cut borrowing costs in June. For the time being, attempts to go lower are restricted by the previously identified resistance level, which has now converted into support. The 50-day Simple Moving Average (SMA) on the 4-hour chart is convergent at 39,250.

The next objectives on the downside below are the 39,000 mark and the current trendline support near 38,775. Bulls may face strong resistance on the upswing at the psychological level of 40,000 and the prior high of 39,900.

The Nasdaq Composite and the MACD have been diverging throughout March. This typically indicates waning momentum, which is frequently accompanied by retreats or reversals. Since we are still trading inside the current rising wedge, sellers will be much more determined to find new lows, with the wedge's base at 14,477 as their ultimate goal, should the price fall below the trendline.

Market Events

The US Institute for Supply Management reported a dovish ISM Manufacturing PMI which is 47.8, 2.64% lower than 49.1 in February. In addition, the ISM Services PMI appeared as 52.6 on 5th March whereas the expectation was 53.

On March 6th, the Australian GDP was announced as 2% which indeed met the expectation but was still 1% lower than the previous quarter. On the same day, the US ADP Non-Farm Employment Change came in as 140K which is 29K higher than the last month.

US Core CPI was reported as 4% on March 12th and remained unchanged compared to the reports in February. However, the US retail sales rose to 0.6%, 1.7% higher than last month. Meanwhile, the Bank of Japan (BOJ) decided to keep the Yen interest rate unchanged, at 0.10%.

On March 21st, the US Federal Funds Rate was announced as 5.50%, unchanged since July 2023. On the same day, the Bank of England (BOE) also voted to keep its interest rate at 5.25%, the same as in February.