Trading plan for 21/03/2017:
In the Asian session, the Euro was gaining ground against other G-10 currencies. The rally of the single currency is driven by the outcome of the French debate of presidential candidates: polls unambiguously point out that Macron won it. The overnight correction did not bring EUR/USD below 1.0720 and currently, the pair is heading towards 1.0800. After a fall overnight, USD/JPY went down to 112.25, shedding 50 pips. AUD/USD struggles to maintain above 0.7700 after a publication of the RBA meeting minutes.
The event calendar for Tuesday 21st of March is pretty low, but market participants will keep an eye on Consumer Price Index from the U.K., Canadian Retail Sales, and the U.S. Current Account data for the fourth quarter.
GBP/USD analysis for 21/03/2017:
The main event that will drive the pound sterling will be CPI data which is due at 09:30 am GMT. Market participants expect a nice improvement in inflation readings. After a 0.5% decline last month, today the anticipated figure is at the level of 0.5% on a monthly basis. The overall yearly reading of CPI should increase from 1.8% to 2.1% as well. If the expectations are met, then inflation will edge up to a three-year high in today's update for February.
Let's now take a look at the GBP/USD technical picture in the H4 time frame. Yesterday's attempt to break out above the golden trend line was a failure, but the market bounced from the nearest support at the level of 1.2345 and now is trying to break out above this level again. If the CPI data beat the expectations, then the price will rally above the golden trend line towards the next technical resistance at the level of 1.2478. If the data disappoint, then a full reversal might take place.
USD/CAD analysis for 21/03/2017:
The Retail Sales from Canada are scheduled for release at 12:30 pm GMT and market participants expect another good figure after yesterday's wholesale sales figures. Market participants expect an increase of 1.5% after last month decline of -0.5% on a month-to-month basis. The overall reading of sales should increase to 1.3% from -0.3% on yearly basis.
Let's now take a look at the USD/CAD technical picture in the H4 time frame. Better than expected data will push the pair lower towards the technical support at the level of 1.3302 or even 1.3275. Worse than expected data will make the pair rally towards the next technical resistance at the level of 1.3419.
EUR/USD analysis for 21/03/2017:
The Current Account data from the U.S. are scheduled for release at 12:30 pm GMT. The Current Account summarizes the flow of goods, services, income and transfer payments into and out of the country. For the fourth quarter, global investors expect an account increase from $-113.0 bln to $-120.0 bln. This might suggest, that the U.S. economy is not exporting as many goods to cover the deficit as the gap widens.
Let's now take a look at the EUR/USD technical picture in the H4 time frame. The pair is rallying towards the next technical resistance at the level of 1.0828, but the overbought trading conditions and growing bearish divergence indicate a possible failure or a corrective cycle coming. The most important support is now the zone between the levels of 1.0713 - 1.726 and only a clear and sustained break out below this level would suggest a temporary trend change.
