Kickstart the FX trading day with a technical look at EURUSD, USDJPY and GBPUSD

The video above, outlines the key technical levels in play for the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD. All three foreign currencies are higher vs the USD (the USD is weaker) with the EUR the biggest mover of the day with a gain of close to 0.80%. The GBP and JPY are higher by about 0.3% compared to the dollar.

• The EURUSD extended higher and trades to the highest level since November 8. In doing so, the price moved to test the 200 day MA at 1.07257. The high reached 1.07215, just short of that level. The price is trading just below 1.0700 at 1.0695. Its 50% retracement of the move down from the September high comes in at the 1.0695 level.
• The USDJPY extended higher in the early Asian Pacific session and above the 100/200 hour MA in the process (149.82 and 149.65 respectively). The price is back trading above and below the 50% of the move up from the September low. That level comes in at 149.221. BOJ Uchida was speaking today saying the central bank would raise rates gradually but not at every meeting.
• The GBPUSD, like the EURUSD, moved higher and traded at it’s highest level since November. Unlike the EURUSD, however, it did move above its 200 day MA at 1.27869. It also moved above its 50% of the move down from the September high at 1.27662.

Yields are higher mostly in the US with a steeper yield curve. US futures implying higher stock prices to start the day after yesterday’s declines in volatile trading. European stock indices are also surging with the German DAX up 3.3%.

Overnight news:

• Trump’s State of the Union address focused on economic measures, including interest payment deductions for US-made cars, the repeal of the Chips Act, and reaffirming 25% tariffs on aluminum, copper, and steel. He acknowledged tariffs will cause disruption but insisted they are necessary. Reports indicate Trump privately confirmed he will maintain tariffs, and his administration is preparing an order to boost US shipbuilding while penalizing China. Goldman Sachs economists predict Trump’s tariffs could drive inflation higher, and Federal Reserve officials, including Williams, echoed similar concerns.
• Bank of Japan (BOJ) Deputy Governor Uchida stated that the bank will raise interest rates gradually in line with expectations while monitoring economic activity and prices. He noted uncertainty over the neutral rate level but affirmed that if the BOJ’s economic outlook is realized, rate hikes will continue. Despite high global economic uncertainties, rising wages are expected to support consumption, and corporate capital expenditure should remain strong. Japan’s economy is growing above its potential rate, though some weaknesses persist. The BOJ will maintain accommodative financial conditions even as rates rise, with long-term rates determined by markets but subject to intervention if rapid increases occur. The bank remains committed to large-scale monetary easing, with no changes to its stance on short-term rates or JGB purchases. Later, he kept chirping and said that the central bank has no preset plan for the pace of future rate hikes. He emphasized that rate increases will not occur at every policy meeting, with decisions based on economic and price developments. Wage trends remain crucial for assessing inflation, and vigilance is needed regarding consumer goods prices due to their impact on inflation expectations.
• Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr has resigned, stating that he leaves with inflation at target and the economy in cyclical recovery but acknowledged ongoing work on multi-year RBNZ strategies. Deputy Governor Christian Hawkesby will serve as acting Governor until March 31. On April 1, the New Zealand Finance Minister will appoint a temporary governor based on the RBNZ Board’s recommendation, with the term lasting up to six months.
• US MBA mortgage applications surged 20.4% for the week ending February 28, rebounding from a 1.2% decline the prior week. The market index rose to 242.2 from 212.3, driven largely by a sharp increase in refinancing activity, with the refinance index jumping to 784.2 from 572.5. The purchase index saw a slight uptick to 144.5 from 144.3. The average 30-year mortgage rate declined to 6.73% from 6.88%, contributing to the increase in applications. However, despite the rebound, the overall mortgage market remains at levels last seen in late December.
• The White House is saying moving in a positive direction on peace talks and that Pres Trump will lift Ukraine aid pause if talks are nailed down.

Looking at the market, US yields are mostly higher to start the day with a steeper yield curve:

• 2-year yield 3.949%, -0.6 basis points
• 5- year yield 4.020%, +1.9 basis points
• 10 year yield 4.242%, +3.2 basis points
• 30 year yield 4.548%, +3.2 basis points

Looking at the premarket for US stocks, the futures implying higher levels, continue to rebound after the volatile session yesterday that saw the Dow for -1.55%, the S&P down -1.22%, and the NASDAQ index down -0.35%. Today,

• Dow industrial average +109 points
• S&P index +17.05 point
• NASDAQ index +103 points

Looking at the European indices:

• German DAX +3.41%
• France’s CAC +2.09%
• UK’s FTSE 100 +0.46%
• Spain’s Ibex +1.54%
• Italy’s FTSE MIB +2.45%

In other markets:

• Crude oil down $1.28 or -1.88% at $66.98
• Gold $-1.90 or -0.06% at $2914.56
• Silver +$0.32 or 1.03% at $32.27
• Bitcoin up $3100 at $90,352

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