<p style=““ class=“text-align-justify“>After the Powell-induced volatility yesterday, markets are adopting a calmer approach so far today. Looking at the bond market first, 2-year yields in the US are up 3 bps to 5.040% while 10-year yields are flat at 3.972% currently. That is seeing equities fare slightly better with S&amp;P 500 futures up 8 points, or 0.2%, while European indices are little changed at the moment.</p><p style=““ class=“text-align-justify“>Meanwhile, the dollar is trading more mixed across the board with light changes for the most part. I’ve summed up the technical predicaments for dollar pairs in my earlier posts below:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurusd-nears-a-test-of-key-support-level-as-dollar-stays-poised-20230308/“ target=“_blank“ rel=“follow“>EUR/USD nears a test of key support level as dollar stays poised</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-looks-for-a-more-meaningful-upside-break-on-higher-bond-yields-20230308/“ target=“_blank“ rel=“follow“>USD/JPY looks for a more meaningful upside break on higher bond yields</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/gbpusd-downside-in-focus-after-break-of-january-lows-20230308/“ target=“_blank“ rel=“follow“>GBP/USD downside in focus after break of January lows</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/usdchf-looks-for-a-bit-more-of-a-pullback-for-now-20230308/“ target=“_blank“ rel=“follow“>USD/CHF looks for a bit more of a pullback for now</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/usdcad-comes-up-for-some-air-boc-in-focus-later-today-20230308/“ target=“_blank“ rel=“follow“>USD/CAD comes up for some air, BOC in focus later today</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/audusd-in-troubled-waters-after-double-whammy-yesterday-20230308/“ target=“_blank“ rel=“follow“>AUD/USD in troubled waters after double whammy yesterday</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/nzdusd-downside-case-in-focus-after-yesterdays-plunge-lower-20230308/“ target=“_blank“ rel=“follow“>NZD/USD downside case in focus after yesterday’s plunge lower</a></li></ul><p style=““ class=“text-align-justify“>That being said, despite the calmer mood now, we may see things kick into gear later on once Wall Street steps into the fray and when we get to the US ADP employment data. It’s all about <a target=“_blank“ href=“https://www.forexlive.com/news/the-landmines-ahead-of-the-fomc-policy-meeting-decision-later-this-month-20230308/“ target=“_blank“ rel=“follow“>navigating through the field of landmines</a> now.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that after falling for basically the whole February, gold had a nice bounce
at the start of March. The pullback brought the price back to the red long
period <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> where the sellers started to pile in. </p><p>Gold is sensitive to real yields,
and these have been rising lately as the market is pricing a more hawkish Fed
given that the US data started to come in hot since February onwards. </p><p>Yesterday, <a target=“_blank“ href=“https://www.forexlive.com/news/ka-powell-20230308/“>Fed
Chair Powell</a> opened the door for a 50bps hike and a higher
terminal rate which caused a selloff in gold as the market is now pricing a
higher chance of the more aggressive hike at the March meeting. </p><p>The market will now focus on the <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>NFP and CPI report</a> that are coming next and beats
in the data should send the price even lower, while misses should give us a
strong rally, possibly towards the 1900 level. </p><p>On the 4 hour chart below, we can
see that the buyers couldn’t sustain the breakout of the 1860 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> zone and gave up to the sellers
resulting in a fakeout. The big selloff you see on the chart was some
positioning into Powell’s testimony and then more selling as Powell sounded
more hawkish than expected. </p><p>The price has overstretched a bit
yesterday as depicted by the distance between the price and the blue short
period moving average. Generally, we can see some consolidation or a pullback
before the next push into the original direction. The most likely area for a
pullback would be the resistance zone at 1825. </p><p>On the 1 hour chart below, we can
see more closely the possible resistance for a pullback. The 1825 area has the
red long period moving average and as you can see looking left, this level has
been respected by the market several times. </p><p>That’s where we will most likely
see the sellers piling in again trading into the NFP. In case, the NFP misses
expectations, the buyers will have the conviction to break the resistance and
probably extend the rally towards the 1860 level. </p>

This article was written by ForexLive at www.forexlive.com.

<p style=““ class=“text-align-justify“>Much like AUD/USD, there is a relatively mild bounce in the pair today but it doesn’t take away from the notable technical development that we saw yesterday. The pair not only broke back below both its 100 (red line) and 200-day (blue line) moving averages but also took out the 38.2 Fib retracement level of its swing higher since October, seen at 0.6145.</p><p style=““ class=“text-align-justify“>The latter helped to arrest the declines at the end of February but now with those key levels out of the way, sellers are in control and are looking poised to try to establish a further downside leg in the pair.</p><p style=““ class=“text-align-justify“>The next key area of support will come from the 0.6000 mark alongside the 50.0 Fib retracement level at 0.6025.</p><p style=““ class=“text-align-justify“>It’s now all about dollar sentiment and as highlighted with other dollar pairs earlier, a lot will rest on the <a target=“_blank“ href=“https://www.forexlive.com/news/the-landmines-ahead-of-the-fomc-policy-meeting-decision-later-this-month-20230308/“ target=“_blank“ rel=“follow“>upcoming landmines</a> before the FOMC policy meeting decision on 22 March. And we won’t have to wait long as there will be the US ADP employment report later today, which will act as a teaser for the US non-farm payrolls on Friday.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that the buyers are struggling breaking decisively above the 0.94 handle.
The falling channel was <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>diverging</a> with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a> and this generally leads to the
price rallying back to the top of the channel once there’s a breakout. So,
technically the buyers will target the 0.96 handle and if the US data keeps
coming in hot, then it’s basically assured that we will get there. </p><p>Yesterday, <a target=“_blank“ href=“https://www.forexlive.com/news/ka-powell-20230308/“>Fed
Chair Powell</a> opened the door for a 50bps hike and a higher
terminal rate if the data remains strong which prompted the market to buy the
USD aggressively. The next big event now is the <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>NFP report on Friday</a> and if we get a beat, then we
will most likely see the USD bid across the board, while a miss would cause
some strong weakness in the greenback. </p><p>On the 4 hour chart below, we can
see more closely the struggle the buyers are finding extending past the 0.94
handle. We got quite a big pullback on the first try breaking out of that <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a>, but the buyers defended the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 0.9287. </p><p>Given that the market is now
pricing a higher chance of a 50bps hike, a higher terminal rate and chances of
good US data, we should expect the buyers to remain in control and keep bidding
the USD to new higher highs. </p><p>On the 1 hour chart below, we can
see where we would most likely find buyers in case the price pulls back before
pushing up again. The area between 0.9400 and 0.9380 has some technical
support. The 0.94 handle could be a <a target=“_blank“ href=“https://www.forexlive.com/Education/using-psychological-price-levels-for-your-trading-20220414/“>psychological
support</a> being a round number and the 38.2% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level would bring the market back into equilibrium
from overstretched highs after yesterday’s huge rally. </p>

This article was written by ForexLive at www.forexlive.com.