Daily Price Outlook

The SPX is trading around 3,916.64. Banking stocks fell as early enthusiasm over Swiss rival UBS Group's historic state-backed bailout of struggling lender Credit Suisse gave rise to growing concerns about the risks of the massive debt that major banks are releasing.

Banking Sector Crisis

The forced acquisition of Credit Suisse by UBS, arranged by the Swiss government, the latest attempt by governments around the globe to limit a crisis threatening the banking sector, had mixed results for US stocks on Monday.

UBS Group AG will pay $3.23 billion for the 167-year-old Credit Suisse Group AG in a deal arranged by Swiss authorities on Sunday and take on up to $5.4 billion in losses.

The start of the trading week left investors on edge as smaller banks continued to face pressure to strengthen their deposit bases in the aftermath of Silicon Valley Bank's demise earlier this month.

In addition, global central banks rushed on Sunday to support the flow of money with several planned currency swaps to guarantee banks had the dollars they required to function in the face of the threat of a swift loss of trust in the financial system.

Although such events seemed to boost investor confidence, the spike immediately faded as attention turned to the significant impact certain Credit Suisse bondholders would experience because of the UBS takeover.

US stocks (SPX Index) fell, Treasury rates dropped, and the dollar fluctuated as measures to protect the world banking system failed to calm market concerns.

The dollar index is trading around 103.80, and the US 10-Year Bond Yield is trading down at 3.326.

Fed Interest Rate Speculations

Meanwhile, according to statistics from CME Group, the Federal Reserve has a 62% chance of raising interest rates on Wednesday, which might cause further turmoil in the banking sector.

The banking industry's recent turmoil increased the risks for the Federal Reserve's interest rate policy. Therefore, market participants are betting on a 25 bps rate rise by the Fed or a pause.

If the US Federal Reserve shows an unwillingness to raise rates in the future or delays present hikes, the stock index may climb. But, the SPX will surely drop if Fed will show a hawkish stance.

S&P500 Price Chart - Source: Tradingview

S&P500 Intraday Technical Levels

Support      Resistance

3895            3995

3829            4030

3794            4095

Pivot Point: 3930

S&P500 – Technical Outlook

The S&P 500 (SPX) has encountered a significant obstacle around the $3,960 level, which is reinforced by a downward channel visible in the 2-hour timeframe.

On the lower side, SPX's immediate support is at the $3,850 level, and breaking below this level could potentially lead to further selling toward the $3,765 level. However, leading technical indicators such as RSI and MACD are in a buying zone, indicating a bullish bias among investors.

On the upside, a bullish breakout above the $3,960 level could open up further buying opportunities toward $4,085 or even higher.

Related:

    * EUR/USD Price Analysis – March 20, 2023

    * S&P500 (SPX) Price Analysis – March 15, 2023

    * GOLD Price Analysis – March 20, 2023

Daily Price Outlook

The EUR/USD is currently trading at around 1.0745, as there has been an increase in investor risk appetite, leading to the rise of the currency pair. The European Central Bank increased interest rates by 0.50% last week, and recent hawkish remarks from ECB officials seem to be encouraging Euro investors.

On Sunday, ECB President Christine Lagarde stated that the central bank expects the Credit Suisse rescue plan brokered by the Swiss National Bank would bring calm to the financial markets, and the ECB is prepared to provide loans to eurozone banks if necessary.

In addition, on Friday, many ECB officials spoke to reassure investors about the soundness of the bloc's banks and support the ECB's hawkish monetary policy.

Peter Kazimir, an ECB policymaker, stated that rate hikes must continue, while Governing Council member Gediminas Imkus supported the hawkish stance by stating that they have not yet reached the terminal rate.

All of this news and action supported the euro. Going forward, EUR/USD traders should monitor ECB President Lagarde's speech, scheduled for Tuesday, for potential direction.

FOMC Meeting and EUR/USD in Focus

In the meantime, major central banks are expected to announce joint efforts to increase liquidity through existing US dollar liquidity swap line agreements, which is supporting a risk-on sentiment following the UBS-Credit Suisse deal.

The Federal Reserve may choose to leave interest rates unchanged or raise them by 25 basis points (bps) to control inflation, which is declining amid the ongoing financial crisis. While a 25bps rate hike may help curb inflation, it could also have negative impacts on the corporate banking sector.

The US Dollar Index (DXY) is currently holding steady at its support level of 103.80, while the US 10-Year Bond Yield has risen to around 3.425%. This is contributing to a capped EUR/USD.

The most significant event this week will be the Federal Open Market Committee's (FOMC) announcement of its monetary policy meeting on Wednesday, along with preliminary PMI results for March.

EUR/USD Intraday Technical Levels

Support      Resistance

1.0663         1.0704

1.0644         1.0726

1.0622         1.0745

Pivot Point: 1.0685

EUR/USD – Technical Outlook

The EUR/USD currency pair is currently seeing steady buying and selling, putting it on track to reach our predetermined target of 1.0745. The EMA50 is providing solid support, suggesting that the bullish trend will likely persist for the foreseeable future.

As the price reaches the target, keep an eye on it since a break over it will send the bullish wave on to the next important station at 1.0920.

A negative recovery to initially test the minor support regions around 1.0635 is possible if the price consolidates against the bullish wave. Note that if 1.0635 is broken, the day's predicted climb will be halted, and the price will fall to the first station at 1.0515.

Today's trading could take place anywhere within the range of 1.0600 (the level of expected support) and 1.0760 (the level of expected resistance).

Related:

    * GOLD Price Analysis – March 20, 2023

    * S&P500 (SPX) Price Analysis – March 20, 2023

    * EUR/USD Price Analysis – March 17, 2023

Daily Price Outlook

The price of gold, XAU/USD, is currently trading around $1,988. On Monday, amidst growing concerns about a financial crisis, gold prices moved slightly below their highest levels in 11 months as markets assessed the influence of the Federal Reserve and other major central banks' emergency liquidity measures.

Gold as a Safe-Haven Asset: How Recent Market Turmoil is Affecting XAU/USD?

Several major central banks, including the Federal Reserve and the European Central Bank, have announced additional measures to provide liquidity to the banking industry and prevent any potential spillover from the recent failures of several institutions.

Additionally, a deal supported by regulators saw troubled lender Credit Suisse Group AG acquired by Swiss competitor UBS Group AG.

The Federal Reserve's expanded liquidity policies mark a reversal of a year of monetary tightening aimed at combating inflation and are expected to support strong demand for gold.

The recent turmoil in the banking sector has fueled safe-haven demand for gold, leading to an increase in the XAU/USD price.

Focus on Fed Monetary Policy and Its Impact on Gold Prices

Meanwhile, the deal between UBS and Credit Suisse has reduced the demand for US government bonds. The expectation of additional market liquidity has boosted the recent increase in US government bond rates and supported the recovery of the US dollar while putting pressure on gold prices.

The US Dollar Index (DXY) is currently trading sideways at 103.80, while the yield on US 10-Year Bonds has risen to 3.414%.

Investors are now awaiting Wednesday's Federal Reserve (Fed) interest rate announcement. Despite recent unrest and concerns in the banking sector, several analysts predict that Fed Chair Jerome Powell will raise rates by 25 basis points (bps).

A potential rise in the price of gold could occur if the US Federal Reserve indicates caution about future rate increases or holds off on current increases. However, any hawkish remarks from the Fed are likely to cause XAU/USD to decline.

Gold Price Chart - Source: Tradingview

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1971            1987

1965            1997

1956            2002

Pivot Point: 1981

Gold (XAU/USD) – Technical Outlook

The gold price achieved new strong rises to surpass our waited target at $1,960.00 and approach the psychological barrier at $2,000.00, which supports the continuation of the bullish trend on the intraday and short-term basis, noting that surpassing the mentioned barrier will push the price to head towards $2,040.00 areas as a next main station.

The EMA50 provides continuous positive support to the price, while stochastic negativity might cause some temporary bearish bias before resuming the bullish bias.

In general, we suggest the continuation of the overall bullish trend domination, and the price needs to hold above $1,960.00 as a first condition to continue the expected rise, as breaking it will press on the price to achieve some intraday bearish correction before turning back to rise again.

The expected trading range for today is between $1,960.00 support and $2,000.00 resistance.

Related:

    * EUR/USD Price Analysis – March 20, 2023

    * S&P500 (SPX) Price Analysis – March 20, 2023

    * GOLD Price Analysis – March 16, 2023

Daily Price Outlook

The Nasdaq 100 Index is currently trading at 12,581.39, which is an increase of 2.69% in the last 24 hours. Stocks are rising as investors anticipate that the authorities will provide sufficient support to the banking system.

First Republic's Support Benefits Banks and Boosts NASDAQ

The market's sentiment has improved following Swiss authorities providing a lifeline to Credit Suisse, and leading American financial firms joining forces to save First Republic Bank, a regional depository institution that was at risk of failing due to the bankruptcy of Silicon Valley Bank and Signature Bank.

Investors were pleased to hear that JPMorgan, Citigroup, Bank of America, Wells Fargo, Morgan Stanley, and PNC reportedly deposited $30 billion with First Republic Bank as part of a US government-led initiative to support troubled financial firms amid growing systemic concerns.

Moreover, the US regional banks' dramatic situation changed rapidly after the European Central Bank raised interest rates by 50 basis points. As several of the country's leading lenders rallied to help First Republic Bank, the NASDAQ experienced a significant rebound.

The Fed's Interest Rate Decision Shrouded in Uncertainty

Reports have indicated that the number of people filing new claims for unemployment benefits in the US has declined more than expected, indicating a strong job market that may encourage the Fed to continue hiking rates.

However, on Wednesday, data showing a decline in producer inflation and weak retail sales numbers supported expectations of a modest rate increase by the Federal Reserve at its meeting.

The Fed will announce a new policy on March 22, and money markets are overwhelmingly pricing in a 25-basis-point rate rise.

Uncertainty surrounding the Fed's interest rate decision has caused the Dollar Index to hit a two-day low at 104.08, while the US 10-year Bond Yield dropped to 3.564%. The weak dollar has capped the rise of the NASDAQ.

Movers and Shakers of the NASDAQ 100 Market

Today, AMD, Marvell Technology, and Intel emerged as the top gainers on the NASDAQ as demand for semiconductor stocks remained strong. Traders are expecting that the increasing demand for AI will boost earnings for semiconductor makers. If the risk appetite remains high and the NASDAQ continues to rise, this trend is likely to continue.

NASDAQ Intraday Technical Levels

Support      Resistance

12096          12338

11940          12425

11853          12581

Pivot Point: 12182

NASDAQ – Technical Outlook

The NASDAQ is currently experiencing a bullish trend as it has broken through the resistance area of $12,350 and is now heading toward the next resistance level of $12,750.

If the index manages to break above the immediate resistance level of $12,750, it could expose it to the next resistance area of $13,125.

Both the MACD and RSI indicators are in the buying zone, indicating a strong upward bias in the market. However, if the NASDAQ falls below the $12,400 level, it could potentially reach the $12,100 or $11,850 mark.

Daily Price Outlook

The BTC/USD is currently trading at 25,718, up by 6.04% in a day. The global financial markets continue to tremble due to Credit Suisse reporting material weaknesses in its finances and the Saudi National Bank refusing to invest further capital to support the struggling Swiss institution.

To address the liquidity concerns over Credit Suisse, the Swiss National Bank intervened on Wednesday and allowed Credit Suisse to borrow up to $54 billion.

Investors have been impressed by the cryptocurrency market's stability amid the banking crisis this week. Additionally, bitcoin's correlation to stocks has been the lowest in months, altering perceptions of bitcoin as a valuable alternative asset.

After a significant surge in cryptocurrencies this week, the BTC/USD price increased as investors assessed the weaknesses in the financial systems of the US and Europe.

Fed Rate Hikes Uncertainty & BTC

Investors are worried that the Federal Reserve may reduce the 50 basis point interest rate increase to improve its resilience against persistent inflation in the United States.

On Wednesday, the US released data indicating a decline in producer inflation and weak retail sales figures, which raised expectations that the Federal Reserve may only slightly increase interest rates at its meeting.

Furthermore, concerns about a global financial collapse have added to the story of falling inflation, reducing the likelihood that the Fed would raise interest rates by 50 basis points. Reuters has also reported that during its meeting on March 22, the FOMC may only increase the federal funds rate by 25 basis points.

The Dollar Index has dropped to 104.06 and may continue to fall as uncertainty around the Fed's interest rate decision increases. Therefore, a weaker US dollar has benefited BTC/USD.

BTC/USD Intraday Technical Levels

Support     Resistance

24435          25446

23813          25835

23424          26457

Pivot Point: 24824

BTC/USD – Technical Outlook

Bitcoin's price is once again rising above the $25,000 resistance level, and it might increase much further if it manages to break through the $26,500 obstacle zone.

Originally, the Bitcoin price plummeted below the $25,000 support zone, and it even dropped below $24,500. The bulls, though, were aggressive near the $24,000 level, barring a further slide. On the upside, there is immediate resistance near $25,900, which is close to the 76.4% Fibonacci retracement level of the decline from the $26,525 swing high to the $23,913 low.

The next important obstacle is near $26,500, and if the Bitcoin price can close over this level, it might spark another rally. If the Bitcoin price fails to break over the $25,900 barrier level, it may begin another drop.

On the downside, the immediate support is near the $25,200 area, with the next major support near the $24,500 area and the 100 hourly simple moving average. If the price falls below this level, it may gather bearish momentum.

Daily Price Outlook

The EUR/USD is currently trading at 1.0646, which is an increase of 0.39% in the last 24 hours. The pair has reached a new high for the day due to the Dollar Index decreasing and the ECB making hawkish statements.

ECB raises interest rates by 50

On Thursday, the European Central Bank (ECB) successfully navigated what some consider to be the early signs of a potential new financial crisis. During her regular news conference, President Christine Lagarde emphasized the need for caution as financial stability risks continue to grow due to the past year's rate increases, which are beginning to expose the weaker components of the financial system.

In addition, the ECB raised its benchmark interest rates by 50 basis points, citing concerns about inflation. Financial markets had anticipated this move, and there were few expectations of a smaller increase.

Despite the interest rate hike, the EUR/USD pair continued to rise as the ECB sought to control rising inflation in the Eurozone. However, the central bank did not provide any hints about future rate increases or the May political move. Financial experts predict that the ECB will likely raise rates further, but the ongoing tensions in the banking industry will be a significant factor.

Finally, on Friday, Eurostat will release the final figure for consumer inflation in the Eurozone.

Fed might remain steady on interest rates

Investors were concerned that the Federal Reserve would reduce the 50 basis point interest rate increase to improve its resilience against prolonged inflation in the United States.

However, weak monthly inflation, a higher unemployment rate, lower Producer Price Index (PPI) statistics, and declining Retail Demand suggested that January's data was an exception. As a result, Fed Chair Jerome Powell would likely continue to raise interest rates by 25 basis points.

In addition to the dropping inflation, new concerns about a global banking collapse have emerged, making it less likely that the Fed would propose an unchanged monetary policy. Consequently, the Federal Reserve may keep interest rates constant after factoring in lower inflation in February and new banking instability.

The Dollar Index has retested its two-day low at 104.11 and may continue to decline as the Fed's interest rate decision is surrounded by growing uncertainty. Meanwhile, the EUR/USD currency pair has benefited from a weaker US dollar.

Looking ahead, Friday's preliminary UoM Inflation Expectations will provide a clear indication of the Fed's interest rate policy since future inflation expectations can become real inflation.

EUR/USD Intraday Technical Levels

Support      Resistance

1.0564          1.0649

1.0515          1.0685

1.0479          1.0734

Pivot Point: 1.0600

EUR/USD – Technical Outlook

The EURUSD pair is currently exhibiting new positive trades in an attempt to surpass the key level of 1.0640 and head towards our next target at 1.0745. As a result, we continue to recommend a bullish trend for the upcoming period, with hopes of positive momentum to help push the price even higher.

However, it's worth noting that failure to breach 1.0640 could lead to a bearish rebound, with the price potentially heading towards testing the critical support level at 1.0515 before attempting to rise again.

Daily Price Outlook

The WTI Crude Oil Futures are trading at 68.42, indicating a 1.20% increase in the last 24 hours. On Thursday, oil prices significantly recovered after hitting their lowest in 15 months the day before.

This occurred as the markets stabilized after Swiss authorities provided Credit Suisse with a financial lifeline, and optimistic forecasts for a Chinese economic boom helped raise expectations for a rise in demand this year.

Optimistic Forecast for China's Economic Growth

Investment bank Goldman Sachs has raised China's annual economic growth forecast from 5.5% to 6%, citing encouraging trends after the nation relaxed most anti-COVID measures earlier this year. The estimate, which exceeds the 5% predicted by the Chinese government, has fuelled optimism that a Chinese rebound could drive oil demand to record highs this year.

In addition, the International Energy Agency's monthly report on Wednesday predicted an increase in oil consumption due to the resumption of air travel and China's economic recovery following the abandonment of its zero-COVID policy. OPEC has also raised its 2023 demand forecast for China.

As a result, oil prices have steadily risen from their lows, with expectations for a strong demand comeback this year.

Swiss Central Bank Provides Financial Lifeline to Credit Suisse

Meanwhile, on Thursday, Credit Suisse announced that it would borrow up to $54 billion from the Swiss central bank to boost its liquidity and regain investor confidence following a decline in its stock price, which raised concerns about a possible global financial crisis.

The news of Credit Suisse's financial lifeline provided some relief to the markets, leading to a recovery in oil prices as market sentiment stabilized.

Dovish Fed Expectations Contribute to Rise in USOIL Prices

US inflation figures indicate a slowdown and economic downturn, leading to predictions of only a 25 basis point increase in the federal funds rate by the Federal Open Market Committee (FOMC) during its March 22 meeting. These dovish expectations resulted in a decline of the US dollar, with DXY currently trading at around 104.43.

Additionally, ongoing volatility in banking stocks and changing interest rate forecasts caused the US 10-Year Treasury Yield to fall to 3.489%. A weak dollar, which makes crude oil cheaper for foreign customers, also contributed to the strengthening of oil prices.

USOIL Intraday Technical Levels

Support      Resistance

65                72

62                76

58                79

Pivot Point: 69

USOIL – Technical Outlook

The price of crude oil has dropped below the $66.00 level, and although there have been some attempts at a recovery (with the price currently testing the $68.00 level), it remains under negative pressure from the EMA50 and is expected to continue declining in the coming trading sessions.

Looking at the chart on a longer time frame, we see that the price has formed a head and shoulders pattern with negative targets that extend down to 48.50 areas initially and 30.15 after surpassing the previous level. However, these levels represent correctional levels for the bullish wave shown on the chart.

Since continuing to rise and break through 69.25 could push the price to make greater gains and test 71.45 before any new decline, we believe that the bearish trend will persist in the short and medium term.

Today's trading range can be between support at $65.70 and resistance at $69.50.

Daily Price Outlook

The GBP/USD is currently trading around 1.2067. Following a sell-off triggered by reports of internal issues at Credit Suisse, the pair attempted a rebound move.

Federal Reserve Rate Hike Bets Lose Steam Amid Falling US Inflation and Credit Suisse Crisis

In the US, concerns about the potential harm caused by the Federal Reserve's aggressive rate hike cycle have grown following the collapse of Silicon Valley Bank (SVB), and bets on rate increases have been muted due to a decrease in inflation to 6%, which was in line with expectations. Market participants now expect the central bank to exercise caution regarding potential hikes, and the CME Group FedWatch Tool shows an 82% chance of a 25 basis point interest rate increase.

Furthermore, disappointing US retail sales and lower Producer Price Index (PPI) numbers suggest a noticeable decline in US inflation, which has significantly reduced hawkish Federal Reserve (Fed) bets.

As a result, the US Dollar Index (DXY) has corrected following the decline in hawkish bets and is currently trading at 104.64, while the US 10-year treasury bond is trading at 3.496%. The GBP/USD currency pair's decline has been limited by the weakening dollar.

UK Chancellor Hunt presents significant tax and benefit reforms in the Spring Budget

Meanwhile, in the United Kingdom, Chancellor of the Exchequer Jeremy Hunt announced significant reforms to the UK tax and benefit system to encourage firms to invest, attract individuals to return to work, and boost the economy out of stagnation.

In addition, Credit Suisse's biggest investor declared it was unable to offer the Swiss bank any more financial support, which prompted the CEO of the Swiss bank to provide new guarantees concerning the stability of the institution's finances. According to the Telegraph, Bank of England (BoE) officials were discussing the possible impact of the issues at Credit Suisse, a systemically important firm linked with the global financial system.

Worries about the European banking system were reinforced by unfortunate news from Swiss lender Credit Suisse, and investors' risk-off sentiment is still on the rise as a result. Therefore, the United Kingdom's Finance Minister (FM) Jeremy Hunt failed to support the British Pound with the financial budget, putting pressure on GBP/USD.

GBP/USD Intraday Technical Levels

Support      Resistance

1.1989         1.2162

1.1913         1.2259

1.1817         1.2335

Pivot Point: 1.2086

GBP/USD – Technical Outlook

The GBP/USD pair made an attempt to break the minor support level at 1.2060, but it consolidated above it, keeping the possibility of resuming the bullish trend on an intraday basis. The next main target is expected to be at 1.2260.

Stochastic is providing clear positive signals, supporting the expectation of a rise in the upcoming sessions. Breaking 1.2145 would make it easier to achieve the anticipated positive targets.

It is important to note that breaking 1.2060 would push the price to decline and test the most significant support at 1.1940 before any new positive attempts.

The expected trading range for today is between 1.2000 support and 1.2160 resistance.

Daily Price Outlook

The XAU/USD is currently trading at 1,910.42, indicating a 0.41% decrease within a day. On Thursday, the price of gold fell from its six-week high as speculators cashed in on gains. However, the yellow metal's status as a safe haven asset was strengthened by fears of an impending financial crisis and uncertainty regarding monetary policy.

Credit Suisse Crisis Sparks Risk Aversion and Impacts Gold Prices

Global market participants are currently concerned about a potential repeat of the 2008 financial crisis as the US banking crisis has now reached Europe and affected Credit Suisse (CS), which is considered to be a bank with significant worldwide systemic importance.

Following the announcement on Wednesday that Credit Suisse's top investor would not provide the Swiss bank with more financial support, global stocks, including Credit Suisse's shares, experienced a decline.

The refusal of the Saudi National Bank to invest additional funds in Credit Suisse led to an acceleration in the leading European bank's Credit Default Swaps (CDS), which then caused a financial market crisis.

Furthermore, news that representatives of the European Central Bank (ECB) approached banks to inquire about their exposure to Credit Suisse only added to the already existing risk-off sentiment.

When the banking crisis spreads to Europe and targets Credit Suisse, investors tend to opt for safe-haven assets like gold, causing the price of XAU/USD to increase. However, as investors began to take profits, gold prices dipped from their six-week high.

Fed Rate Hike Speculations and Their Impact on Gold Prices

Traders showed little interest in US statistics amidst growing concerns about Credit Suisse and the possibility of a new financial crisis.

US retail sales fell by 0.4% in February, below market expectations of 0.3% and a downward revision from the prior month's figure of 3.2%. The Producer Price Index (PPI) also decreased from 5.7% in January to 4.6% YoY, falling short of the market projection of 5.6%.

The data shows a noticeable drop in US inflation, which has lowered expectations of a hawkish stance by the Federal Reserve (Fed). Nevertheless, Reuters reports that the Federal Open Market Committee (FOMC) is still expected to raise the federal funds rate by 25 basis points at its meeting on March 22.

As traders anticipated further Federal Reserve interest rate increases, Treasury rates rose to 3.489%, and the DXY rebounded to 104.57, putting pressure on XAU/USD.

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1890            1942

1862            1965

1838            1993

Pivot Point: 1914

Gold (XAU/USD) – Technical Outlook

The gold price encountered substantial resistance at $1,929, trading with clear negativity and retesting the breached resistance for the bullish pennant's pattern, which was influenced by stochastic negativity. Hoping for favorable momentum to help push the price back into the main bullish wave, which has its next objective of $1,962.00.

The EMA50 continues to support the projected bullish trend, and a break of $1,929 is needed to ease the goal of reaching the desired level.

But, breaking $1,906.00 will put the price under extra downward pressure, causing it to test the most significant support at $1,878.80 before any new attempt to rise.

Today's trading range is predicted to be between $1,894.00 support and $1,936.00 resistance.

Daily Price Outlook

The NZD/USD pair is currently trading at 0.6221, which represents a decline of 0.22% over the last 24 hours. The pair retreated as investors became worried ahead of publishing New Zealand's Gross Domestic Product (GDP) data and the US Retail Sales and Manufacturing statistics.

Fed Rate Hikes Speculations

Last week, Jerome Powell, president of the US Federal Reserve, said that the benchmark interest rate would increase earlier than anticipated. He said that interest rates would climb more quickly if there were strong economic statistics. However, given the current issues with the US banking system, traders anticipate a less hawkish central bank since they are concerned that more banks may collapse.

After the US Government, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) actively insured a rescue for all bank depositors, foreign currencies found relief due to declining rate expectations.

However, investors began to worry about Fed rate increases when the US CPI report revealed that inflation is still a problem.

After the CPI report, Reuters reported that a government analysis revealed that American inflation remained high in February. Therefore, the Federal Reserve may increase its interest rates by 0.25 points the next week and one more in May.

After hearing that the Fed may hike interest rates next week, the US Dollar Index (DXY) received bids to test the 103.76 intraday high. The yield on US Treasury bonds with a 10-year maturity rose to 3.678%. It causes the NZD/USD currency pair to decline.

Traders are waiting for Retail Sales and the Producer Price Index (PPI) later today for further information about the US economy and inflation.

New Zealand Upcoming GDP report

Early this morning, New Zealand's current account results impacted the Kiwi Dollar. The current account deficit decreased from NZ$11.40 billion to NZ$9.46 billion in the fourth quarter.

Traders are now anticipating Statistics New Zealand's GDP report. Estimates indicate that the New Zealand GDP has shrunk by 0.2% after growing by 2.0% in the third quarter.

A slowing of the growth rate shows that household demand is becoming more limited, easing the pressure on Reserve Bank of New Zealand (RBNZ) policymakers working to slow down inflationary pressures. The RBNZ may suspend the cycle of rate hikes if there is a large downward deviation in the GDP. It will be unfavorable to the NZD/USD pair.

NZD/USD Intraday Technical Levels

Support      Resistance

0.6207         0.6256

0.6179         0.6277

0.6158         0.6305

Pivot Point: 0.6228

NZD/USD – Technical Outlook

The NZDUSD pair has resumed its negative trend and is approaching the EMA50. It is expected to decline further towards our next main target at 0.6140. Breaking this level may extend the bearish wave to reach 0.6020.

As such, we maintain a bearish outlook for the upcoming trading sessions, unless the pair breaches 0.6290 and holds above it. The expected trading range for today is between support at 0.6170 and resistance at 0.6280.