SOFTER ECONOMIC DATA AND DOMESTIC POLITICS WEAKEN THE DOLLAR
The U.S dollar index came under pressure against a basket of currencies this week, as weaker than expected macroeconomic data and the firing of U.S Secretary of State Rex Tillerson hurt the greenback. Weaker than expected U.S inflation and Retail Sales data hurt overall U.S dollar sentiment, as CPI for the month of February increased just 0.2 percent, whilst U.S Retail Sales fell into negative territory for the second consecutive month. The U.S dollar index was again rejected from above the 90.00 level, with price-action falling towards the 89.50 support region as the greenback slumped across the board.
The U.S dollar index remains bearish whilst trading below the 90.20 level, further losses towards 88.90 and 88.50 seem possible.
Should the U.S dollar index gain traction above the 90.20 level, key upside resistance is found at the 91.00 and 91.70 levels.
European Central Bank President Mario Draghi this week stated that the stronger euro currency may hurt inflation in the eurozone. Whilst delivering a scheduled speech in Frankfurt, Germany, Mario Draghi noted that ' The euro's strength could weigh on eurozone inflation down the line'. The ECB President kept with the cautious rhetoric after last week's dovish policy meeting, noting the ECB 'still need to see further evidence that inflation dynamics are moving in the right direction’. The EURUSD looked past Draghi's speech, as overall dollar weakness remained the driving force behind the pairs early week advance towards the 1.2400 level.
The EURUSD pair remains bullish whilst trading above the 1.2334 level, further gains towards 1.2430 and 1.2500 appear likely.
Should the EURUSD pair move below the 1.2334 level, a sharp decline towards the 1.2278 and 1.2205 levels remains possible.
BEARISH BITCOIN VOLUMES
Bitcoin fell to a new five-week trading low this week, as bullish trading volumes in the cryptocurrency market suffered heavy declines. The BTCUSD pair fell below the former weekly trading low, finding technical support at the $7,557 level after being swiftly rejected from $9,827 level in early week trading. Bullish trading volumes suffered a fifty percent decline at one stage, with selling volumes far outweighing buying volumes, pointing to a possible bear market in Bitcoin. The broader cryptocurrency also suffered heavy declines this week, with official statistics showing the collective market capitalization of all cryptocurrencies falling to its lowest point since February 6th.
The BTCUSD pair remains bearish whilst trading below the $9,827 level, further declines towards $7,100 and $5,800 remain possible
Should the BTCUSD pair move above the $9,827 level, the $10,800 and $11,550 resistance levels come back into focus.
SNB ON HOLD
The Swiss National Bank kept interest rates on-hold during Thursday policy decision, maintaining the overall deposit rate at a record low, –0.75 percent. The official monetary policy statement from the SNB said that the 'SNB remain active in the foreign exchange market as necessary' whilst also noting that 'the swiss franc remains highly valued'. The swiss franc currency showed only a muted reaction to the decision, as SNB policy makers showed no obvious change in communication to financial markets participants. The USDCHF pair initially slipped lower in early week trading, finding support just above the 0.9400 level, although price-action later recovered back towards the 0.9500 level.
The USDCHF pair remains bearish whilst trading below the 0.9510 level, further declines towards 0.9350 and 0.9280 appear likely.
Should the USDCHF pair move above the 0.9510 level, further upside towards 0.9580 and 0.9650 remains possible.