Forex Forecast: Pairs In Focus - Sunday, Mar. 21

Last week also saw extremely strong Australian employment data and much poorer than expected New Zealand GDP numbers.

The Eurozone continues facing the problem of a resurgent coronavirus due to its very slow vaccination program. Poland and France are following Italy and some other nations in reimposing lockdown restrictions, which is bound to have a chilling effect on Eurozone economic growth.

The coming week will bring quarterly policy input from the Reserve Bank of Switzerland and testimony by the Chair of the U.S. Federal Reserve before Congress.

Last week saw the global number of confirmed new coronavirus cases rise for the second consecutive week after falling for over two months, driven mainly by a resurgence of the virus in Europe. The total number of global deaths also rose last week for the first time in two months.

Many countries have begun vaccination programs. Excepting extremely small nations, the fastest progress towards herd immunity has taken place in Israel which has fully vaccinated 50% of its population, followed by the U.A.E. at 22%. Both nations have seen their respective numbers of new cases fall dramatically over recent weeks.

The strongest growth in new confirmed coronavirus cases is happening in Andorra, Argentina, Armenia, Austria, Bahrain, Bangladesh, Belgium, Bosnia, Brazil, Bulgaria, Canada, Chile, Colombia, Cyprus, Ecuador, Estonia, Ethiopia, Finland, France, Germany, Greece, Guatemala, India, Iraq, Italy, Jordan, Kazakhstan, Kenya, Luxembourg, Mali, Moldova, Mongolia, Netherlands, North Macedonia, Norway, Oman, Pakistan, Paraguay, Philippines, Poland, Romania, Serbia, Somalia, Sweden, Ukraine, Uruguay, and Venezuela.

Technical Analysis

U.S. Dollar Index

The weekly price chart below shows the U.S. Dollar index printed a weakly bullish near-pin candlestick last week which followed a weakly bearish near-doji candlestick from the week before. The consolidation of the past few weeks appears to have ended, with the dollar showing some bullish momentum. The index is finally above its price from three months ago which is a bullish sign but is still below a nearby resistance level as well as sitting below its price from six months ago, suggesting that the upwards movement may be capped over the near term. Overall, next week’s price movement in the U.S. dollar looks somewhat likely to be bullish, but the upside may be limited. For this reason, it will probably be wise to focus on trading the USD long only over the coming week (UUP, UDN).

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