GREENBACK GAINS AS LATEST DATA POINTS TO STRENGTHENING AMERICAN ECONOMY
DOLLAR INDEX RISES
The U.S dollar index found strong dip buying demand this week, as solid U.S Manufacturing data and bullish comments from the FOMC Meeting Minutes underscored the overall health of the U.S economy. The headline February Manufacturing PMI from the United States rose to 55.9 from 55.5, indicating towards the most rapid improvement in overall U.S business conditions since October 2014. The U.S dollar index staged a strong recovery, moving above the key 90.00 handle, whilst U.S 10-year treasury-yields soared to trading levels not seen since 2014.
The British pound lost momentum against the U.S dollar, as weaker than expected UK economic data and a lack of overall buying interest above the 1.4000 level weighed on sterling. The GBPUSD pair dropped below the 1.3900 level as the greenback continued to strengthened, whilst unemployment rose in the United Kingdom for the first time in nearly two-years. The official UK unemployment rate ticked higher to 4.4 percent, whilst the second estimate of fourth quarter GDP came in weaker than estimated, growing just 0.4 percent.
- The GBPUSD pair remains bearish while price-action trades below the 1.4000 level, further downside towards 1.3830 and 1.3770 seems possible.
- Should the price-action move above the 1.4000 level, further buying towards 1.4150 and 1.4280 remains possible.
The overall cryptocurrency market continued to recover from the price-lows made at the beginning of February, with Bitcoin, Ethereum, Litecoin and Ripple leading the advance higher in the digital currency space. The BTCUSD pair moved to levels not seen since late January, with price-action eventually setting a new monthly trading-high well above the $11,000 level. Litecoin briefly traded back above the $250 mark on strong technical buying amidst the Litecoin Cash hard fork, whilst Ethereum fell just short of the $1,000 level before turning lower on mild profit taking.
- The BTCUSD pair remains bullish while trading above the $10,050 level, further buying towards $11,800 and $13,500 seems likely.
- Should price-action on the BTCUSD pair move below the $10,050 level, further losses towards $8,800 and $7,200 remain possible.
The EURUSD pair dropped sharply lower this week, as a stronger U.S dollar and political uncertainty in Germany weighed on the single currency. The euro suffered triple digit points losses against the greenback, sinking back below the key 1.2300 level and erasing the strong gains of the previous trading week. Broad-based strength in the U.S dollar index contributed to the pairs decline, whilst German political risks spooked EURUSD buyers. More than 450,000 members of the German Social Democratic party, began to vote on whether to enter another grand coalition under Chancellor Angela Merkel, weighing on overall euro trading sentiment.
- The EURUSD pair is bearish while trading below the 1.2290 level, further losses towards 1.2210 and 1.2100 appear possible.
- Should EURUSD price-action move back above the 1.2290 level, further buying towards 1.2385 and 1.2440 remains possible.