Weekly Forex Market Update & Key Levels March 21 – 25th

WEEKLY FOREX UPDATE

EURUSD – As expected, the Fed didn’t raise rates at its scheduled meeting this week. However, the Fed’s statement lowered the expected overnight rate by year’s end from 1.4% to 0.90%. The Fed also lowered their forecast of four interest rate rises to only two this year. What really was strange at this meeting was Chair Yellen’s answer to a question on the Fed’s “credibility” as its position changes at every meeting. Yellen made it clear that the Fed makes no promises, and has no preset action from meeting to meeting. This really means that they don’t have the slightest clue as what they are doing and just changing their minds (and policies) on the whim. The real question is when will they lose all their credibility?

EURUSDWeekly-200316

 

US30 – Broke through our overhead resistance zone that we stated last week from the bullish news that interest rates remain unchanged. The US30 is at another important resistance point with the downward long term trend line. This week should be another important week for the overall market and I believe the market will stall from here unless other bullish news comes out for the stock market. The market is currently overbought and could re-test the 17200 level that was previously broken.

US30Weekly-200316

 

USDCAD – As expected, the trend line mentioned last week did not hold. This pair is now near an important support level at 1.2800. The correction in the USD was long over due and now that its fast approaching support levels, we should soon look for opportunities to buy. Why? U.S. oil inventory keeps creeping up which is bad news for the oil price and consequently the Canadian Dollar. But don’t let the volatility fool you….. The big news in oil is the possibility of a meeting among OPEC and non-OPEC producers next month to discuss production cuts. However, the world still produces about two million more barrels of oil per day than it needs. All the talk in the world won’t change that. If some combination of supply and demand doesn’t change soon, oil will take another dive and also the Canadian Dollar. Remember we are still in a “Risk On” trade at the moment. As soon as that changes traders will flock back in the USD.

USDCADWeekly200316

Good luck this week. If you have any questions please leave a comment below. Safe trading!
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Chris Ferreira

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