The US banking crisis remains a key factor for markets

  • Yellen is prepared to take further action: US banking regulators can engage depositor rescues if necessary.
  • JPY is outperforming: The safe haven JPY is strong today, with USD also outperforming on major forex.
  • Equities struggle for support: US futures have come off earlier highs, whilst European indices falling away.
  • Metals and oil are mixed: In commodities, gold and silver are fluctuating around flat, with oil a shade higher.

The focus remains on US banking concerns 

Developments in the US banking crisis are now near constant newsflow that is impacting moves on major markets.

Treasury Secretary Janet Yellen (also a former Fed Chair) has once more been looking to settle the nerves.

On Wednesday, Yellen had caused concern as she commented to a congressional committee that it would require legislation in Congress to cover all depositors.

On another appearance before Congress yesterday she clarified that US regulators could rescue individual banks (as they did with SVB and Signature Bank). 

This development has looked to settle the nerves.

Worryingly, elevated emergency borrowing from the Fed continues 

Despite Yellen’s reassurances, the issues with the US banking crisis are not going away in a puff of smoke.

Data from the Federal Reserve showed that the Federal Reserve emergency lending to banks remained massively elevated in the last week. 

  • In the first week after the banking crisis kicked off, lending was a record c. $153bn. 
  • This week it was c. $110bn.

With central banks also leaning on the Fed for $60bn, banks in the US and around the world are relying on the Federal Reserve for USD liquidity (i.e. the lifeblood of the world economy).

Market sentiment is negative

This is leaving broader risk appetite very cautious and is impacting markets:

  • It is driving negative sentiment, with flow into safe haven assets such as the Japanese yen.
  • The USD is also recovering some lost ground today.
  • Higher-risk assets such as equities and oil are struggling.

JPY is strong, with USD also recovering 

The USD is recovering against all major currencies this morning, with one exception, the JPY.

The JPY continues to be a clear outperformer over the past month.


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In major forex, there is a clear divide, with currencies seen as higher risk (AUD especially) seen as underperforming.

AUD/JPY breaking down

So with JPY outperforming and AUD underperforming, it comes with little surprise that AUD/JPY is falling hard.

This morning, the pair has broken below the support of the December low at 87.01 and is now trading at a 12-month low.

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  • The market has been trending decisively lower for four weeks.
  • Although the RSI is below 30, this reflects the bearish outlook.

There is a key band of overhead supply between 87.00/88.10 and we favour using rallies as a chance to sell.

The next support is at 84.60/86.25.

Support and resistance levels for Forex, Commodities, and Futures/Indices 


EUR/USD R2 1.0852
R1 1.0828
S1 1.0755
S2 1.0704


R2 1.2288
R1 1.2264
S1 1.2221
S2 1.2178
USD/JPY R2 130.67
R1 130.47
S1 129.80
S2 128.33


R2 2003
R1 1995
S1 1977
S2 1966


R2 23.60
R1 23.21
S1 22.90
S2 22.75
Brent Crude Oil
R2 77.45
R1 76.30
S1 74.50
S2 73.85


S&P 500 futures
R2 4039
R1 3997
S1 3948
S2 3937
DAX Index 
R2 15,267
R1 15,206
S1 14,913
S2 14,838
FTSE 100 Index
R2 7515
R1 7474
S1 7385
S2 7341

Data: MT5/IXOne

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