<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-february-cpi-104-vs-99-yy-expected-20230322/“>UK February CPI +10.4% vs +9.9% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/hot-uk-inflation-data-adds-to-headache-for-boe-20230322/“>Hot UK inflation data adds to headache for BOE</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/cable-at-seven-week-highs-ahead-of-the-boe-tomorrow-20230322/“>Cable at seven-week highs ahead of the BOE tomorrow</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-lagarde-we-are-neither-committed-to-raise-further-nor-are-we-finished-on-rate-hikes-20230322/“>ECB’s Lagarde: We are neither committed to raise further nor are we finished on rate hikes</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-lane-there-are-reasons-to-believe-underlying-inflation-measures-will-ease-over-time-20230322/“>ECB’s Lane: There are reasons to believe underlying inflation measures will ease over time</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-nagel-backs-further-rate-hikes-plays-down-banking-turmoil-20230322/“>ECB’s Nagel backs further rate hikes, plays down banking turmoil</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-january-current-account-balance-170-billion-vs-159-billion-prior-20230322/“>Eurozone January current account balance €17.0 billion vs €15.9 billion prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/opec-reportedly-likely-to-stick-to-existing-deal-until-the-end-of-the-year-20230322/“>OPEC+ reportedly likely to stick to existing deal until the end of the year</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-march-cbi-trends-total-orders-20-vs-15-expected-20230322/“>UK March CBI trends total orders -20 vs -15 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-mba-mortgage-applications-we-17-march-30-vs-65-prior-20230322/“>US MBA mortgage applications w.e. 17 March +3.0% vs +6.5% prior</a></li></ul><p>Markets:</p><ul><li>GBP leads, JPY lags on the day</li><li>European equities slightly higher; S&amp;P 500 futures flat</li><li>US 10-year yields up 1.5 bps to 3.62%</li><li>Gold up 0.1% to $1,941.83</li><li>WTI crude down 0.3% to $69.45</li><li>Bitcoin up 0.2% to $28,190</li></ul><p style=““ class=“text-align-justify“><a target=“_blank“ href=“https://www.forexlive.com/news/welcome-to-fed-day-20230322/“ target=“_blank“ rel=“follow“>It’s all about the Fed today</a> and broader market sentiment is more pensive in general, though the overall mood is steady.</p><p style=““ class=“text-align-justify“>That comes after the risk recovery in the past two days but now markets will have to pass the Fed test to see what comes next. The banking turmoil may have subsided but the Fed could very well reignite some fears and anxiety again later before all is said and done.</p><p style=““ class=“text-align-justify“>As such, equities didn’t do a whole lot with bond yields also considerably little changed after a volatile last two weeks.</p><p style=““ class=“text-align-justify“>Instead, it was the pound who stole the focus as UK inflation surprisingly runs hot in February as food prices jump by the highest since 1977. Headline annual inflation moved back into double-digits and core inflation shot above 6%, and that helped to underpin the pound in European morning trade.</p><p style=““ class=“text-align-justify“>Coming into today, markets were just expecting one more rate hike by the BOE this week before heading to the sidelines. But after the data, another 25 bps is now priced in for May and that is now the peak for rates based on the OIS market.</p><p style=““ class=“text-align-justify“>GBP/USD moved up from 1.2230 to near 1.2300 before backing off slightly, sitting around 1.2260-80 mostly now.</p><p style=““ class=“text-align-justify“>Elsewhere, the dollar is just a touch lower against the euro and the antipodeans though the ranges for the day are leaving a lot to be desired. EUR/USD entered into the session sitting around 1.0770 but is now seen pushing towards 1.0800.</p><p style=““ class=“text-align-justify“>Now, on to the Fed next.</p>

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

<p style=““ class=“text-align-justify“>I already shared my thoughts earlier in the day <a target=“_blank“ href=“https://www.forexlive.com/news/welcome-to-fed-day-20230322/“ target=“_blank“ rel=“follow“>here</a>. And as at time of writing, Fed funds futures are reflecting roughly 86% odds of a 25 bps rate hike. It’s been a while since we last had such uncertainty heading into a FOMC meeting but here we actually are. These are the latest calls from the punters big boys ahead of the main event (h/t @ <a target=“_blank“ href=“https://twitter.com/BrianSozzi“ target=“_blank“ rel=“nofollow“>Brian Sozzi</a>):</p>

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

<p style=““ class=“text-align-justify“>That comes despite the latest slump in prices, in which we saw WTI crude break back below $70 this week. The sources reported say that OPEC+ is to stick to its deal on output cuts of 2 million bpd until year-end. For now, it looks like Russia is the only one acting to cut down on production.</p><p style=““ class=“text-align-justify“>“This is only a unilateral cut of Russia. No changes for the group until the end of year.“</p><p style=““ class=“text-align-justify“>That’s according to one of the delegates, with the other saying that no further output cuts were planned for now.</p>

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

<p>On the daily chart below, we can
see the incredibly strong and fast rally in gold that started as the Silicon
Valley Bank failed. The fears around the banking sector caused not only a
flight to safety into gold, but also a fast repricing lower in interest rates
expectations that brought down real yields and ultimately favoured the precious
metal. </p><p>As the fears faded due to the
emergency actions taken by the central banks, the buying momentum started to
weaken and led to a correction. The rally was anyway overstretched as signalled
by the distance between the price and the blue short term <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>divergence</a> with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a>. </p><p>On the 4 hour chart below, we can
see that the break below the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> gave the sellers some control.
The moving averages crossed to the downside as the selling momentum
intensified. It may be an early signal of a change in trend, but the next
direction will be decided by the <a target=“_blank“ href=“https://www.forexlive.com/news/welcome-to-fed-day-20230322/“>FOMC
decision</a> and the economic data in the next few weeks. It’s likely that we will
see another selloff in case the Fed sounds hawkish, while a dovish outcome
would give the buyers again control. </p><p>On the 1 hour chart below, we can
see a clear setup for both buyers and sellers. The buyers will want to see the
price to break above the trendline to start piling in and extend the rally
towards new higher highs. The sellers, on the other hand, are likely to lean on
the trendline where there is <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-confluence-20220318/“>confluence</a> with a 38.2% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level and the red long period moving average. </p>

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