Forex Forecast: Pairs In Focus - Sunday, Mar. 7

Last week saw the performance of the U.S. economy exceed consensus forecasts, with 379K new non-farm jobs being created over the past month well ahead of the 197K, which had been expected. The unemployment rate also fell slightly from 6.3% to 6.2%. With the new stimulus bill expected to become law shortly, we can expect a healthy tailwind for U.S. economic growth.

Bitcoin (BITCOMP) recovered from its low the previous week, but not strongly enough to break up past key resistance levels above $50K, meaning that a renewed push to new highs is now looking less likely to happen.

The coming week will bring central bank input from the European Central Bank and the Bank of Canada, as well as a release of important U.S. inflation data.

Last week saw the global number of confirmed new coronavirus cases and total deaths again drop worldwide, although by less than recent weekly decreases. The amount of daily new cases is down by almost half from its peak in early January, while daily deaths are down by more than one third over the same period.

Many countries have begun vaccination programs. Israel has vaccinated over 53% of its population (including 80% of over-50s) with a first dose of the Pfizer vaccine, and over 40% with a second and final dose. The U.A.E. is next with 22% of its population fully vaccinated.

The strongest growth in new confirmed coronavirus cases is happening in Austria, Bosnia, Brazil, Bulgaria, Chile, Cyprus, Czech Republic, Estonia, Ethiopia, Finland, Greece, Hungary, Iran, Iraq, Jordan, Kenya, Kosovo, Kuwait, Malta, Moldova, Mongolia, North Macedonia, Norway, Oman, Pakistan, Paraguay, Philippines, Poland, Romania, Serbia, Slovakia, Sweden, the Ukraine, and Uruguay.

Technical Analysis

U.S. Dollar Index

The weekly price chart below shows the U.S. Dollar index printed a reasonably large, bullish candlestick last week which followed a bullish engulfing candlestick from the week before. The consolidation of the past few weeks appears to have ended, with the dollar showing some bullish momentum. Despite that, the index is still below its prices from three and six months ago and below a nearby resistance level, suggesting that the upwards movement may be capped over the near term. Overall, next week’s price movement in the U.S. dollar looks at least a little likely to be downwards. For this reason, it will probably be wise to focus on trading the USD long over the coming week.

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