EUR/USD is trading lower ahead of the US close after reports suggesting that the ECB’s message at its March meeting had been over-interpreted by the markets as a step to exit. The pair hit a new weekly low at $1.0738 on the news before making a weak correction to around $1.0765 afterwards. From a technical view, we look for support at the March 21st low of $1.0717 followed by the March 14th high at $1.0662. On the upside, the overnight high at $1.0826 and yesterday’s high at $1.0872 are in focus.
GBP/USD has traded in a 100 pip range on the day of Brexit. After surrendering the $1.24 handle overnight, Cable leapt to daily highs at $1.2474 as the UK formally invoked Article 50, before coming under renewed selling pressure and dropping back below the $1.2400 level. As we approach the end of the trading day the pair is marching towards a positive close, recovering towards the mid-$1.24 area. In terms of technicals, the daily low at $1.2375 is our first level of support followed by the March 21st/20th low at $1.2342/35. On the upside, the daily high at $1.2474 may offer some resistance ahead of the $1.2500 round figure mark.
USD/JPY bottomed earlier in the session at ¥110.69 but has managed to rise back above the ¥111.00 level despite the decline in US yields and also the negative close in the Dow. From a technical view, we look for resistance at Friday/Thursday highs at ¥111.48/57 ahead of the March 21st prior low at ¥112.28. On the downside, the earlier low at ¥110.69 and Monday’s low at ¥110.09 are in focus.
GBP/EUR is trading higher after Article 50 was officially triggered, recovering towards the €1.1600 level having bottomed around the mid-€1.14 area. This after the Eur dropped across the board on a sources report suggesting ECB policymakers thought the market overreacted to perceived hawkish early-March guidance and lowered expectations of a rate hike over the near-term. From a technical view, yesterday’s high at €1.1602 may offer some resistance ahead of last Thursday’s high at €1.1620. On the downside, today’s low at €1.1439 and March 16th low at €1.1414 are in focus.