<p>Market sentiment:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/are-we-actually-getting-more-questions-than-answers-at-this-point-20230317/“>Are we actually getting more questions than answers at this point?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-nerves-are-starting-to-show-up-in-markets-again-20230317/“>The nerves are starting to show up in markets again</a></li></ul><p>Inflation:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/japans-trade-union-confederation-says-agreed-to-average-of-38-wage-hikes-for-fy2023-20230317/“>Japan’s trade union confederation says agreed to average of 3.8% wage hikes for FY2023</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-february-final-cpi-85-vs-85-yy-prelim-20230317/“>Eurozone February final CPI +8.5% vs +8.5% y/y prelim</a></li></ul><p>ECB:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-simkus-says-terminal-rate-hasnt-been-reached-yet-20230317/“>ECB’s Simkus says terminal rate hasn’t been reached yet</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-villeroy-we-did-what-we-said-we-would-do-on-rates-20230317/“>ECB’s Villeroy: We did what we said we would do on rates</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-kazimir-we-are-not-at-the-finish-line-20230317/“>ECB’s Kazimir: We are not at the finish line</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/morgan-stanley-now-forecasts-ecb-terminal-rate-of-375-previously-4-20230317/“>Morgan Stanley now forecasts ECB terminal rate of 3.75% (previously 4%)</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/hsbc-sees-two-more-25-bps-rate-hikes-by-the-ecb-to-follow-20230317/“>HSBC sees two more 25 bps rate hikes by the ECB to follow</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/goldman-sachs-expects-ecb-to-hike-rates-by-25-bps-in-may-next-20230317/“>Goldman Sachs expects ECB to hike rates by 25 bps in May next</a></li></ul><p>China:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/pboc-announces-cut-to-banks-reserve-requirement-ratio-by-25-bps-20230317/“>PBOC announces cut to banks‘ reserve requirement ratio by 25 bps</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-president-xi-to-travel-to-russia-on-20-22-march-20230317/“>China president Xi to travel to Russia on 20-22 March</a></li></ul><p>Markets:</p><ul><li>JPY leads, USD lags on the day</li><li>European equities lower; S&amp;P 500 futures down 0.2%</li><li>US 10-year yields 8 bps 3.608%</li><li>Gold up 0.8% to $1,933.94</li><li>WTI crude up 0.5% to $68.68</li><li>Bitcoin up 8.8% to $26,909</li></ul><p style=““ class=“text-align-justify“>It was a quiet session mostly but things are starting to heat up again now as we look towards US trading.</p><p style=““ class=“text-align-justify“>There was a sense of calm in markets early on in European trading, with bond yields sitting comfortably higher and equities also observing slight gains. However, all of that quickly dissipated as the nerves are starting to show up again with traders and investors still on high alert on the whole global banking situation.</p><p style=““ class=“text-align-justify“>Major players on Wall Street and the Fed may have helped to induce some calm with regards to First Republic Bank but we’ll see in the session ahead whether or not that will be enough to keep the shorts away.</p><p style=““ class=“text-align-justify“>As we look towards the session ahead, bond yields are falling off and equities are being pushed lower as the mixed fortunes this week continue to play out.</p><p style=““ class=“text-align-justify“>In FX, the dollar is slightly weaker on the balance of things but has seen its early losses pared somewhat now. EUR/USD was up to around 1.0670 and hanging around large option expiries before dropping back to 1.0630, still up 0.2% on the day though.</p><p style=““ class=“text-align-justify“>Meanwhile, USD/JPY is keeping pressured and down over 100 pips to 132.60 amid lower bond yields. GBP/USD was also seen up to around 1.2175 earlier before coming back down to be little changed around 1.2130 currently.</p><p style=““ class=“text-align-justify“>Elsewhere, AUD/USD is still up 0.6% to 0.6690 levels and down just slightly from its earlier levels around 0.6700-10 mostly in European morning trade.</p><p style=““ class=“text-align-justify“>There’s still plenty to play for before the end of the week, so now we move over to North America to find out what the next twist will be.</p>

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

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

<p style=““ class=“text-align-justify“>Once again, just when you thought we might be in for a calmer trading today, there just had to be a twist and it now comes right before we get into North America trading. Bond yields are on the retreat with 2-year yields in the US falling to the lows for the day, down 5 bps to 4.08% while 10-year yields are down 10 bps to 3.48%. This is taking USD/JPY down with it as the pair is down by over 100 pips now to 132.50 levels:</p><p style=““ class=“text-align-justify“>The pair has been struggling to get above its 100-hour moving average (red line) earlier today and this is keeping sellers in near-term control, with sentiment in the bond market vindicating the technicals.</p><p style=““ class=“text-align-justify“>Elsewhere, equities are also starting to come under pressure with European indices paring all of its earlier gains and US futures dropping into the red as mentioned <a target=“_blank“ href=“https://www.forexlive.com/news/equities-start-to-run-into-a-bit-of-trouble-20230317/“ target=“_blank“ rel=“follow“>here</a>.</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 trying hard to defend the 133 handle as depicted by the
long candlesticks wicks. </p><p>The technicals and the
fundamentals are working against the buyers at the moment though. The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> have crossed to the downside, which may be an early signal of a change
in trend. </p><p>The Treasury yields keep falling
as the market is expecting the Fed to stop its tightening cycle soon and
deliver rate cuts earlier than expected. </p><p>The market will now look at the
FOMC meeting next week and the economic data to decide if the trend is indeed
downwards now or the market overreacted to the banking ”crisis”. </p><p>On the 4 hour chart below, we can
see that the selling momentum is weakening as shown by the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>divergence</a> between the price and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a> right at the 133 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a>. </p><p>We have also the support from the
50 and 61.8% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> levels of the entire upward move since the
gamechanger February NFP report. The sellers may now try another push lower
towards the 61.8% level expecting a dovish Fed.</p><p>On the 1 hour chart below, we can
see that the price may be forming a <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>falling
wedge</a> pattern. This is generally a reversal pattern, so the buyers will look
for the price to break above the blue trendline to start piling in with more
conviction. </p><p>We may get another push lower
from the sellers as the Fed next week is expected to hike by just 25 bps
instead of the 50 bps that the market was fearing just a week ago. If the Fed
delivers a hawkish 25 bps hike or even surprises with a 50 bps move, then we
may see a quick rally in the pair. Otherwise, the sellers will remain in
control. </p>

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

<p style=““ class=“text-align-justify“>S&amp;P 500 futures are now down 8 points, or 0.2%, on the day with Dow futures down 0.4% as the anxiety holds. Looking at bank stocks, Credit Suisse shares are extending its fall, down 9% at the moment as the pressure is not alleviating towards the end of the week.</p><p style=““ class=“text-align-justify“>And the tensions and nerves are just going to be even more palpable later when Wall Street steps into the fray.</p>

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