• EUR/USD is consolidating last week’s advance near the 1.1000 figure.
  • EUR/USD is on track to have a second consecutive bearish day. 
 
 

EUR/USD daily chart 

 
EUR/USD is retreating down from last week’s high as the spot is consolidating near the 1.1000 figure and the 50 DMA (daily simple moving average) as DXY is stabilizing. Quarter-end flows are for now benefitting USD. 
 

EUR/USD four-hour chart

 
The euro is consolidating last week’s bullish run near the 1.1000 psychological level and the 200 SMA on the four-hour chart. The market is weakneing and a daily close below the 1.1000/1.0972 can point to further declines towards the 1.0880 level, according to the Technical Confluences Indicator. Resistance is seen near the 1.1046, 1.1091 and 1.1130 levels. 
 
 
Resistance: 1.1046, 1.1091, 1.1130
Support: 1.1000, 1.0972, 1.0880
 
 

Additional key levels

 

Data released on Tuesday, showed an expected decline in US Consumer Confidence for the current month. Analysts at Wells Fargo point out economic indicators are starting to reflect the bunker mentality that mostly set in during the month of March. 

Key Quotes: 

“The fact that consumer confidence “only” fell 12.6 points is a better outcome than the drop of more than 20 points expected by the consensus. Last week, the University of Michigan’s counterpart sentiment survey posted the largest monthly drop since October 2008.”

“One explanation for the relatively modest decline is that perceptions of the strength of labor market are not in-sync with the most recent data.”

“In the accompanying note, Conference Board noted that this release came ahead of last week’s news of a record-shattering rise in jobless claims and that “further declines are sure to follow.”

  • EUR/JPY is accelerating the downside as the market is back into the March’s range.
  • The level to beat for bears is the 118.00 support.
 

EUR/JPY daily chart

 
EUR/JPY is continuing to drop from the March’s highs while trading below the 119.00 handle and the main SMAs on the daily chart.
 

EUR/JPY four-hour chart

 
EUR/JPY broke below the 118.80 level and the main SMAs on the four-hour chart suggesting a negative bias in the medium term. The current bearish move is set to extend to the 118.00, 117.50 and potentially to the 116.90 levels if the sellers gather enough steam. Resistance can emerge near 118.80, 119.50 and 119.90 levels.
  

Additional key levels

 

New York State Governor Andrew Cuomo has reported that total deaths in the state have climbed to 1,550 on Tuesday from 1,1218 on Monday.  The apex is yet to come and could be between 14 to 30 days away. 

The total number of mortalities in the US is now at 3,393, surpassing China’s reported 3,305 deaths. Italy has suffered the highest death toll and Spain follows. 

Stock markets are marginally higher on the last day of the first quarter. The US dollar is on the back foot amid end-of-month flows. 

  • Swiss franc drops against its main rivals, SNB intervention? 
  • USD/CHF holds bullish bias in the short-term but momentum eases. 

The USD/CHF rose to 0.9686 after the beginning of the American session, reaching the highest level since last Thursday and then pulled back. As of writing trades at 0.9635, near the session low. 

The retreat from the peak took place amid a decline of the US dollar across the board. The greenback rose to multi-day highs but over the last hours turned to the downside, erasing gains. The DXY climbed toward 100.00 and now is back at 99.25, close to Monday’s close. 

The Swiss franc holds a negative tone against its main European rivals. EUR/CHF rose back above 1.0600 and spiked to 1.0620, the highest since Friday. The area around 1.0550/60 has become a strong support. 

“The Swiss franc maintains its safe-haven appeal with EURCHF grinding steadily lower in recent weeks. Thus far, the cross has held above 1.05, however, amid signs that the SNB is actively working to prevent runaway CHF appreciation. The panic phase of the latest wave of risk aversion may be complete. Sentiment is likely to remain fragile for some time, however, as global growth falls off the cliff. This suggests CHF strength is unlikely to reverse course any time soon”, explained analysts at Rabobank. 

USD/CHF Technical levels 

 

  • OPEC output reportedly increased by 90K barrels per day in March.
  • US and Russia will start discussions on stabilization of oil market. 
  • Coming up: API Weekly Crude Oil Stock data from US. 

The barrel of West Texas Intermediate (WTI) dropped to its lowest level in more than 18 years on Monday at $19.25 before staging a rebound on Tuesday. After coming within a touching distance of the $22 mark, the WTI lost its traction and erased the majority of its daily gains and was last seen trading at $20.50, still adding 1.3% on the day.

Oil recovery struggles to gather momentum

Earlier in the day, the data published from China showed that the economic activity in the manufacturing and the service sectors expanded in March following February’s deep contraction to ease concerns over a protracted drop in energy demand.

Additionally, a Kremlin spokesman said that US President Donald Trump and President Putin agreed to start discussions on the stabilization of the oil market during Monday’s phone conversation and helped the WTI cling to its recovery gains.

However, a Reuters survey on Tuesday showed an increase in the OPEC oil output in March as Saudi Arabia boosted its production following the collapse of the OPEC+ output cut agreement. With the data revealing that the OPEC output rose by 90,000 barrels per day (bpd) to 27.93 million bpd in March, the WTI pushed lower in the American trading hours.

Later in the day, the American Petroleum Institute’s (API) Weekly Crude Oil Stock data will be looked upon for fresh impetus.

Technical levels to watch for

 

The crude oil output of the OPEC increased by 90,000 barrels per day (bpd) in March to 27.93 million bpd boosted by ramped up production in Saudi Arabia and the United Arab Emirates, a Reuters survey showed on Tuesday.

“This may be the calm before the storm as many OPEC countries have announced a maximisation of their supply and exports in April,” Petro-Logistics, a firm that tracks oil shipments, CEO Daniel Gerber told Reuters. “Early signs show export rates from Saudi Arabia, UAE and Kuwait starting to ramp up.”

Market reaction

The barrel of West Texas Intermediate (WTI) continued to erase its losses on this headline and was last seen trading at $20.60, still adding 1.75% on the day.

  • US dollar index (DXY) is up for a second consecutive day. 
  • The level to beat for buyers is the 100.00 handle.
 

DXY daily chart chart

 
Last week, the greenback had its largest weekly decline since April 1986 as DXY challenged the 50-day simple moving average on the daily chart.
  

DXY four-hour chart

 
DXY is rebounding above the main SMAs as the bulls want a daily close above the 100.00 psychological level. A break above the above-mentioned level can open the doors to the 100.50 and 101.50 resistances on the way up. Conversely, bears would need to regain the 98.00 figure to extend the bearish move seen last week.
   

Additional key levels

 

  • Consumer Confidence Index in US fell less than expected in March.
  • 10-year US Treasury bond yield is down more than 7% on Tuesday.
  • Wall Street’s main indexes turn positive after opening red. 

The USD/JPY lost its traction in the early American session and continued to erase its daily gains. As of writing, the pair was still up 0.2% on the day at 108.03.

Coronavirus crisis takes a toll on US consumer sentiment

The monthly data published by the Conference Board on Tuesday revealed that the Consumer Confidence Index in the US dropped to 120 in March from 132.6 in February. Although this reading came in better than the market expectation of 110, the 10-year US Treasury bond yield extended its slide and was last down 7.5% on the day.

Commenting on the data, “the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs,” noted Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

Pressured by the falling T-bond yields, the US Dollar Index (DXY), which touched a daily high of 99.95, continued to edge lower to keep the bearish pressure on the pair intact. At the moment, the DXY is still up 0.35% at 99.38.

On the other hand, Wall Street’s main indexes turned positive on the day after opening deep in the red to reflect a mixed market sentiment, which might be helping the pair limit its losses for the time being.

In the Asian session on Wednesday, Tankan Large Manufacturing Index for the first quarter and Jibun Bank Manufacturing PMI for March will be looked upon for fresh impetus. 

Technical levels to watch for