What are we looking at today:

  • Market sentiment looks cautious in consolidation: European indices are mixed again, with US futures slightly lower. This is interesting as it also comes as USD has just slipped back slightly, along with Treasury yields.
  • Oil price strength fading, for now: With oil price also ticking lower, this should be positive for risk appetite, but for now it is not. 
  • More Fed speakers: there are three more speakers today, with Williams, Barkin and Waller set to speak.  
  • Data trading: Into the US session, we are looking out for final Michigan Sentiment and Pending Home Sales. Any surprise revision to Michigan Sentiment could be the market mover.  


The USD strength amid a sharp rise in US Treasury yields in recent weeks has been a key feature of major markets. The run higher on USD/JPY has been a standout in the forex space. However, there are just a few signs creeping in that there may be time for a pullback on this USD strength. The direction of Treasury yields could have a key part to play in this, with yields beginning to consolidate. This may lend some appetite for profit-taking on the USD, at least near term. 

There is also an unwinding of some of the strength in the oil price too. Interestingly though, this along with a weakening USD should be seen as positive for broader sentiment. However, for now, markets appear cautious in consolidation. A ranging move on European indices is seeing a slight tick lower this morning. One area to watch in all this is the precious metals. With sentiment cautious and USD slipping, we are seeing gold and silver looking more positive. 

The economic calendar is fairly light for the rest of the day. Michigan Sentiment is a final reading and no revision is expected by the analyst consensus. Pending Home Sales tend to be less market-moving but could cause a surprise.  

Today's news

Sentiment in cautious consolidation: Equity markets are slightly lower, but look mixed. NASDAQ is underperforming on Wall Street (tends to come with a risk negative bias), but in Europe we see DAX holding up relatively well. Precious metals are positive and oil is slipping. In forex, with the USD slipping, with a slight underperformance of the commodity currencies (AUD, NZD, and CAD).   

Treasury yields slightly lower: Yields have fluctuated over recent sessions, with a consolidation seeing a little shifting of the yield curve. The 2s/10s spread remains around 20 basis points.

Russia/Ukraine war latest: President Biden has said that sanctions could last for as long as needed. This implies sanctions lasting for several months or into years.   

Oil price slips: Brent Crude is back under $120. In other news, Russia is considering asking for Bitcoin in exchange for oil and gas. 

UK Retail Sales lower than expected: Monthly ex-fuel sales (core sales) fell by -0.7% in February (vs an expected rise of +0.5%) meaning year on year sales fell to 4.6% (5.6% expected, 7.5% in January) [slightly GBP negative]

German Ifo Business Climate dives: The Ifo has fallen much more than expected in March. Business sentiment in German has fallen to 90.8 (94.2 was forecast, from 98.9 in February) [EUR negative}

Cryptocurrency consolidating: Bitcoin had a strong day yesterday, rising by +3.5%, but is all but flat this morning. This is coming around $43,900 which is under the key resistance which remains between $44,500/$45,800. 

More Fed speakers today: The flood of Fed speakers continues today. Williams (permanent voter, slightly dovish) speaks at 1400GMT; with Barkin (non-voter in 2022, slightly hawkish) speaking at 1530GMT; and Waller (permanent voter, very hawkish)speaking at 1600GMT.

Economic Data:

  • Michigan Sentiment - final (at 1400GMT) – Analysts are not expecting any revision to the prelim 59.7.
  • US Pending Home Sales (at 1400GMT) – Sales are expected to fall by -3% in February with the year-on-year decline increasing to -11% (from -9.5% in January).

Major market outlook

Broad outlook: There is an uncertain sentiment today. There are hints of some profit-taking on USD positions, with oil also lower. However, broader sentiment is consolidating.

Forex: USD is slipping back, with commodity currencies (AUD, NZD, and CAD) all marginally underperforming.

  • EUR/USD has ticked higher in the past 24 hours and continues to hold above the key near-term support at 1.0960. A move above 1.1045 would be important in moving to break a six-week downtrend, however, the market looks uncertain with daily momentum still struggling for recovery impetus. Below 1.0960 opens 1.0900. Above 1.1045 opens 1.1120 again.
  • GBP/USD has unwound the gains of earlier in the week and is now choppy around the old breakout which is supportive around 1.3185/1.3210. This is breaking a recovery trend and with RSI momentum still struggling is a concern for the bulls. Under 1.3155 turns the outlook negative again. Resistance at 1.3298.
  • AUD/USD run higher has been impressive but is showing signs of stalling slightly this morning. How the bulls react to and unwind towards the breakout support now between 0.7360/0.7440 will be a key factor for the near to medium-term outlook. Technically, we see weakness as a chance to buy for continued recovery, as long as this support band holds. This stalling is taking hold just under the 0.755 crucial long-term resistance.

Commodities: Precious metals have started to pull higher against. Oil is slipping.

  • Gold has broken out above $1950, to end a mini consolidation and start to look more positive again. Near-term unwinding moves that find support between $1937/$1950 will be seen as a chance to buy. The next resistance is $1990/$2010.
  • Silver has broken higher with 2 strong bullish daily candlesticks and moved above $25.53. The bulls will now look to build support between $25.37/$25.54 for moves towards $26.00 and above. 
  • Brent Crude oil with a negative close yesterday and further downside today, the market is beginning to look more corrective near term. Breaking back under $120.40, this is now becoming a basis of resistance, leaving $120.40/$124.40 as a key near-term barrier. A move below $114.00 would turn the market decisively corrective now.

Brent Crude Oil

Indices: Wall Street is holding up well, but European markets are looking less positive now.

  • S&P 500 futures had a positive close yesterday but are just consolidating slightly this morning. There is a sense that this is consolidation around the middle of the road. Support around 4418 is important to hold on to, but key resistance at 4585 lies overhead. These levels will be a key gauge in the coming days.
  • DAX remains supported above the 14,100 breakout, but has now been consolidating for over a week under 14,585. Momentum has stagnated around neutral on daily and four-hour charts. This is playing out under the 11-week downtrend and key resistance around 14,800. However, the potential for recovery remains whilst above 14,000 support.
  • FTSE 100 has been choppy in recent sessions amidst a consolidation around resistance between 7490/7565. The upside impetus is being lost, and the support at 7405/7422 will be watched. Losing this would begin to turn the market corrective towards the key support band around 7264.

Support and Resistance levels

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