Daily Forex Analysis - 18 March 2021

USD Overview (18 March 2021)

Yesterday, USD weakened against all major currencies after the Federal Reserve delivered a dovish tone during their monetary policy decision.

Earlier today, the central held its monetary policy unchanged. Although the Fed revised their near-term economic projections upwards, Chairman Jerome Powell highlighted that the short-term rise in inflation above the 2% target is not sufficient for hiking interest rate.

Housing data released yesterday indicated a slowdown in the increase of the number of building permits issued and the number of houses that started construction in February.

- Building Permits (Actual: 1.68M, Forecast: 1.74M, Previous: 1.89M revised from 1.88M)

- Housing Starts (Actual: 1.42M, Forecast: 1.56M, Previous: 1.58M)

NZD/USD Outlook (18 March 2021)

Overall, NZD/USD is ranging across. Recently, NZD/USD broke above the key level of 0.72 as a result of the weakening of USD due to the dovish tone delivered by the Federal Reserve.

The New Zealand GDP q/q data (Actual: -1.0%, Forecast: 0.2%, Previous: 13.9% revised from 14.0%) released yesterday indicated a slight economic contraction during the fourth quarter of 2021.

NZD/USDs next support zone is at 0.71000 and the next resistance zone is at 0.72850.

Look for buying opportunities of NZD/USD.

AUD/USD Outlook (18 March 2021)

Overall, AUD/USD is ranging across. Recently, AUD/USD broke the resistance zone of 0.77900 as a result of the weakening of USD due to the dovish tone delivered by the Federal Reserve.

The Australian employment data released earlier today indicated a strong improvement in the job market, with more jobs being added than expected and a 0.5% decline in unemployment rate.

- Employment Change (Actual: 88.7K, Forecast: 31.5K, Previous: 29.5K revised from 29.1K)

- Unemployment Rate (Actual: 5.8%, Forecast: 6.3%, Previous: 6.3% revised from 6.4%)

The Australian retail sales m/m data (Forecast: 0.6%, Previous: 0.5%) will be released tomorrow at 0830 (SGT).

AUD/USDs next support zone is at 0.77900 and the next resistance zone is at 0.80000.

Look for buying opportunities of AUD/USD.

USD/JPY Outlook (18 March 2021)

Overall, USD/JPY is trending upwards.

Earlier today, the Bank of Japan (BoJ) announced the widening of interest rate target range to provide banks with support. The central bank will also be ending its target for exchange-traded funds purchase.

The BoJ will be announcing their monetary policy decision tomorrow at a tentative timing. It is expected that the central bank will be holding its monetary policy unchanged.

A press conference will also be held at a tentative timing after the announcement. During this time, volatility in JPY is expected.

Currently, USD/JPY is testing the resistance zone of 109.000 and the next support zone is at 106.000.

If USD/JPY bounces off the resistance zone of 109.000, look for short-term selling opportunities.

EUR/USD Outlook (18 March 2021)

Overall, EUR/USD is trending downwards. Recently, EUR/USD trended into the resistance zone of 1.19700 as a result of the weakening of USD due to the dovish tone delivered by the Federal Reserve.

European Central Bank President Lagarde will be testifying later at 1600 (SGT).

During this time, volatility in EUR is expected.

Currently, EUR/USD is testing the resistance zone of 1.19700 and the next support zone is at 1.17900.

If EUR/USD breaks the resistance zone of 1.19700, look for short-term buying opportunities of EUR/USD up until the testification by ECB President Lagarde.

GBP/USD Outlook (18 March 2021)

Overall, GBP/USD is ranging across. Recently GBP/USD broke the key level of 1.39 as a result of the weakening of USD due to the dovish tone delivered by the Federal Reserve.

The Bank of England (BoE) will be announcing their monetary policy decision later at 2000 (SGT). It is expected that the central bank will be holding its monetary policy unchanged. With the increase in pace of the vaccine inoculation programme in the UK, the BoE may provide some sign of optimism.

GBP/USDs next support zone is at 1.37800 and the next resistance zone is at 1.40000.

Look for short-term buying opportunities of GBP/USD up until the BoEs monetary policy decision later at 2000 (SGT).

USD/CAD Outlook (18 March 2021)

Overall, USD/CAD is trending downwards. Recently, USD/CAD trended into the support zone of 1.23800 as a result of the weakening of USD due to the dovish tone delivered by the Federal Reserve.

The Canadian CPI m/m data (Actual: 0.5%, Forecast: 0.7%, Previous: 0.6%) released yesterday indicated a slight slowdown in the rate of inflation in February.

Currently, USD/CAD is testing the support zone of 1.23800 and the next resistance zone is at 1.26100.

Look for selling opportunities of USD/CAD if it breaks the support zone of 1.23800.

GBP/JPY Outlook (18 March 2021)

Overall, GBP/JPY is trending upwards. Recently, GBP/JPY bounced up from the key level of 151.

Earlier today, the Bank of Japan (BoJ) announced the widening of interest rate target range to provide banks with support. The central bank will also be ending its target for exchange-traded funds purchase.

The Bank of England (BoE) will be announcing their monetary policy decision later at 2000 (SGT). It is expected that the central bank will be holding its monetary policy unchanged. With the increase in pace of the vaccine inoculation programme in the UK, the BoE may provide some sign of optimism.

The BoJ will be announcing their monetary policy decision tomorrow at a tentative timing. It is expected that the central bank will be holding its monetary policy unchanged.

A press conference will also be held at a tentative timing after the announcement. During this time, volatility in JPY is expected.

GBP/JPYs next support zone is at 149.800 and the next resistance zone is at 152.600.

Look for short-term selling opportunities of GBP/JPY.

EUR/JPY Outlook (18 March 2021)

Overall, EUR/JPY is trending upwards. Recently, EUR/JPY broke above the key level of 130.

Earlier today, the Bank of Japan (BoJ) announced the widening of interest rate target range to provide banks with support. The central bank will also be ending its target for exchange-traded funds purchase.

European Central Bank President Lagarde will be testifying later at 1600 (SGT).

During this time, volatility in EUR is expected.

The BoJ will be announcing their monetary policy decision tomorrow at a tentative timing. It is expected that the central bank will be holding its monetary policy unchanged.

A press conference will also be held at a tentative timing after the announcement.

During this time, volatility in JPY is expected.

EUR/JPYs next support zone is at 129.500 and the next resistance zone is at 132.800.

Look for buying opportunities of EUR/JPY.