USD: PPI Sends The Dollar Flying

USD: PPI Sends The Dollar Flying

Diperbarui • 2024-03-21

Following yesterday's dovish Fed announcement, market expectations for a full 25 basis point hike from the Fed's yearly outlook were scaled back, causing the dollar to weaken. Consequently, EUR/USD saw gains as the dollar depreciated, testing resistance levels around 1.0942 and 1.0960, which correspond to Fibonacci retracements of previous major declines. The price action also highlights support levels at the 50 and 200-day simple moving averages (SMAs) and the 1.0830 marker. Despite this, the US dollar is expected to remain supported due to a superior interest rate differential and a resilient economy, especially if inflation prints continue to surprise on the upside. Additionally, the summary of economic projections (SEP) indicated a consistent upward revision of the Fed funds rate, suggesting a higher 'neutral rate' in light of robust growth and a strong labor market.

AUDUSD- H1 Timeframe

AUDUSDH1-210324.png

AUDUSD on the 1-hour chart recently broke a major trendline, with a retest of the trendline support and the Fibonacci retracement level, moving average support, and the breaker block. In line with these confluences, I will maintain a bullish sentiment on AUDUSD in the meantime in hopes of a new higher high.

Analyst’s Expectations: 

Direction: Bullish

Target: 0.66249

Invalidation: 0.65593

EURUSD - H4 Timeframe

 EURUSDH4-210324.png

EURUSD has recently broken the previous structure after bouncing off the trendline support. In response to that reaction, I have drawn the Fibonacci retracement of the impulsive breakout, hence, I will be looking forward to seeing the bullish pressure revived anytime soon.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.09171

Invalidation: 1.08353

GBPUSD - H4 Timeframe

 GBPUSDH4-210324.png

After the price action on GBPUSD raided the previous low, it dipped into the demand zone at the base of the algo-structure pattern. The presence of a trendline support overlapping the demand zone lends even more confluence to the already bullish sentiment.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.27809

Invalidation: 1.25987

CONCLUSION

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