<p>WTI crude futures are settling down $1.61 or 2.36% at $66.74.</p><p>The high price extended up to $69.83. The low price traded to a new low going back to December 2021 at $65.38. On Wednesday, the low price reached $65.65. Yesterday the low price bottom just above that level at $65.71.</p><p>For the trading week, the price of crude oil is down -13.30% or $-10.20. That’s the largest one week decline since April 2020. The settlement price was just above the 200 week moving average at $66.14. Next week, the 200 week MA will be a key barometer for buyers and sellers. Stay above the MA level is more bullish. Move below will be more bearish. </p><p>Be aware. </p>

This article was written by Greg Michalowski at www.forexlive.com.

<p>IN trading today, the EURUSD moved higher in the Asian session, fell in the European morning session , and is moving higher in the US session. </p><p>The move has taken the price positive on the week (it closed at 1.0636 last Friday). Ironically, the close from last week is right near the midpoint of the week’s trading range. However, this week, the pair has its share of ups and downs. </p><ul><li>On Monday the price initially moved higher than lower and then back higher</li><li>Tuesday the pattern was lower than higher.</li><li>On Wednesday after reaching a new high for the week at 1.07592, the price tumbled all the way down to 1.05147 as Credit Suisse became a catalyst and provide a downside tailwind. Expectations for a softer ECB was priced in. </li><li>Thursday the ECB raised rates by a greater than expected 50 basis points. Once again, there was a a volatile up, down and back up day. The price closed higher.</li><li>Today, once again the price moved up and down and back up again. The final move to the upside has taken the pair to new intraday highs.</li></ul><p>Technically, the price rise today has now seen the pair extend above its 100 hour moving average at 1.06583, and the 61.8% retracement of the week’s trading range at 1.06658.</p><p>Today’s catalysts has been lower US rates which has weakened the US dollar. The two year yield is now down 30 basis points at 3.831%. The 10 year yield is down 20 basis points to 3.382%. Yesterday the trend in rates was the opposite with the US yields moving higher.</p><p>What now?</p><p>The bias more positive above the 100 hour moving average 1.0658. On the top side, there is a swing area between 1.06908 and 1.0704. Get above that area would increase the bullish bias.</p><p>Alternatively, move back below the 100 hour <a target=“_blank“ href=“https://www.forexlive.com/terms/m/moving-average/“ class=“terms__secondary-term“ id=“d39a8864-434f-487e-bd1e-f9b895111210″ target=“_blank“>moving average</a> and then below the 200 hour moving average 1.06278, and sellers are back in control.</p><p>Next week the <a target=“_blank“ href=“https://www.forexlive.com/terms/f/federal-reserve/“ class=“terms__main-term“ id=“0139b451-c49a-48a1-8365-838a83595a97″ target=“_blank“>Federal Reserve</a> will meet and announce their rate decision on Wednesday. They also will release the dot plot on rate expectations. </p><p>Currently, the terminal rate implied by the market is below 5% at 4.95%. Recall in December when the last dot plot was announced, the Fed officials had the terminal rate at 5.11%. So traders have taken out one 25 basis point hike from that December. Having said that, a week or two ago, the expectations for the terminal rate was upwards toward 5.75%. People were talking about a terminal rate of 6% or higher.</p><p>That is more dovish of course, but even more dovish is the futures contract for January 2024 are now implying that the Fed will lower rates to 3.95%. That is down about 100 basis points from the terminal rate.</p><p>Before the Fed went into the blackout, comments were about the Fed pushing rates toward 5.25% (and for some above), and then being rates steady for an extended period of time (and certainly not before the end of 2023). Now, the market sees the Fed rate moving down by 100 bps. </p><p>Wednesday will certainly be an interesting day. The volatility seen this week may certainly be a precursor for what we can expect.</p>

This article was written by Greg Michalowski at www.forexlive.com.

<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.

<p>On the daily chart below, we can
see that the key <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 32684 was breached and the
sellers started to pile in pushing the price to new lows. The market fell as
the Silicon Valley Bank failed last Friday causing risk aversion across the
board. On Monday and Tuesday the market rebounded a little as the actions taken
by the Treasury and the Fed calmed the markets. </p><p>Yesterday, the fears came from
Europe as Credit Suisse was once again under stress. Later in the day the SNB
offered support for the bank and the market bounced again. The sellers are in
control, but they are struggling to push lower as expectations of rate cuts are
giving the buyers some fuel to keep pushing up. </p><p>The sellers may want to wait for
the price to pull back to the support now turned resistance, the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> and the red long period <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> as the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-confluence-20220318/“>confluence</a> of all these technicals gives a
strong level where they can lean on with defined risk.</p><p>On the 4 hour chart below, we can
see that the resistance at 32684 has also the 50 and 61.8% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> levels. There’s also a <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> signalling that the selling
momentum is weak and we may indeed see a pullback. From a risk management
perspective, the best thing to do for the sellers is to wait for the price to
come to that resistance and lean on it with defined risk. </p><p>In the 1 hour chart below, we can
see that at the moment there’s some selling pressure. If we see the buyers
pushing the price above the orange swing resistance at 32245, then we may see
them extend the rally to the 32684 level. On the other hand, if the sellers
manage to break the orange swing low at 31640, then they may extend the
selloff.</p>

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

<p style=““ class=“text-align-justify“>In the short-term, the actions overnight <a target=“_blank“ href=“https://www.forexlive.com/news/credit-suisse-group-takes-steps-to-improve-liquidity-20230316/“ target=“_blank“ rel=“follow“>here</a> should help but that doesn’t fix the long-term strategy and overall outlook of the firm. At this stage, I would say that an eventual takeover by another bank is still arguably the most probable outcome for Credit Suisse.</p>

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

<p style=““ class=“text-align-justify“>The general line of thinking is that markets could possibly fall apart if the ECB goes with a 50 bps rate hike today. That comes of course after all the concerns of a banking crisis this week, which started from Silicon Valley Bank’s collapse to Credit Suisse’s capital distress.</p><p style=““ class=“text-align-justify“>The fact that <a target=“_blank“ href=“https://www.forexlive.com/news/what-does-the-market-pricing-say-about-credit-suisse-right-now-20230315/“ target=“_blank“ rel=“follow“>CDS swaps</a> in the latter were showing that the underlying scenario is akin to a „this is not a drill“ type of situation shows how worried markets have been this week over a breakdown in the global financial system. </p><p style=““ class=“text-align-justify“>Now, Credit Suisse has already tried to address its issues through a CHF 50 billion borrowing and some creative financial chemistry (as noted <a target=“_blank“ href=“https://www.forexlive.com/news/this-is-the-only-thread-you-need-to-understand-what-credit-suisse-is-doing-20230316/“ target=“_blank“ rel=“follow“>here</a>). But it remains to be seen if that is enough to turn the tide in markets.</p><p style=““ class=“text-align-justify“>Essentially, we are in a place where the longer it is that there is no bad news, that in itself is good news. As such, the timing of the ECB policy decision is a rather unfortunate one for policymakers. Now, they can’t just focus on what they have to do but take into account the market’s „feelings“.</p><p style=““ class=“text-align-justify“>If you were to have written an ECB preview before yesterday and arguably before European trading today, it would have been ripped up. I would say even <a target=“_blank“ href=“https://www.forexlive.com/centralbank/barclays-forecast-for-the-european-centralbank-meeting-today-is-a-25bp-rate-hike-20230315/“ target=“_blank“ rel=“follow“>Barclays‘ latest call</a> this morning for a 25 bps rate hike is pretty much invalid now.</p><p style=““ class=“text-align-justify“>Considering how markets have digested the mood music in European trading, I’m even more convinced that the ECB will go with a 50 bps rate hike later today.</p><p style=““ class=“text-align-justify“>They’ve made that clear in the sense that going up against inflation is their number one concern and with core inflation still running rampant in the euro area, there is no reason to back down – at least from this argument. Besides that, they have already in a way committed to this by telling markets that they would so for quite a while now.</p><p style=““ class=“text-align-justify“>If they were to relent, it would practically call into question their resolve and their entire policy in communicating with markets. The backlash that Lagarde will face in her interview would be immense.</p><p style=““ class=“text-align-justify“>But another reason why I think that they would stick with their call for a 50 bps rate hike is that they can address any market concerns in a confident and yet elegant manner, while delivering on tighter policy.</p><p style=““ class=“text-align-justify“>As mentioned earlier, the simplest step would be to adjust TLTRO terms and delay early repayments from banks. In that sense, they can roll them over to a later date and keep liquidity conditions sufficient and just kick any QT talks down the road for now.</p><p style=““ class=“text-align-justify“>There might yet be other tools but I would assume that policymakers will not see fit to disclose them or think about them too much now as the situation in markets is rather fluid. However, they should reinforce the notion that they will stand ready at any point in time to step in and shore up confidence in the banking sector, if need be.</p><p style=““ class=“text-align-justify“>Put those two elements together and a bend but don’t break reaction in markets is what the ECB can hope for later today.</p><p style=““ class=“text-align-justify“>As for the reaction in the euro, I would say that there is scope for an upside move with a 50 bps rate hike should markets be able to take that in with stride and not revert back to a risk-off wave.</p>

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