"Meeting tide of interest rates" or upset the trend of non-US currencies

In the wake of Fed Chairman Ben Bernanke’s remarks that QE3 was not mentioned, as well as the tight funding of European banks and the downgrade of European debtor countries by foreign rating agencies, last week the euro led the European currencies to retreat significantly. At the same time, after the dollar’s ​​momentum against the yen’s exchange rate accumulated momentum, it rose sharply last week and hit a new high of nearly nine months. On the whole, the US dollar was weaker on Monday, and the US dollar rebounded strongly against most major currencies. It is expected that the US dollar may rise further this week. However, several central bank interest rates this week will aggravate the short-term volatility of the foreign exchange market.

Last week, the euro-dollar exchange rate fell sharply after hitting a two-month high, with a weekly drop of nearly 2%. First, because the European Central Bank's second three-year long-term refinancing operation (LTRO) has exposed the tight liquidity of the European banking industry; Secondly, although Bernanke admits that the economic downside risk of the USA remains, it does not say anything about QE3. "This raises the market's sentiment for the dollar; in addition, foreign rating agencies continue to suffer a "killer" for European heavy-debt countries, and Moody's downgraded Greece again. All of the above factors have caused persistent selling of the euro, and the pound sterling and the Australian dollar have also been implicated in this. On the Japanese yen, after the Bank of Japan unexpectedly expanded the scale of quantitative easing in mid-June last year, the newly released Japanese economic data also provided support for the above policy, which exacerbated the market's pessimistic view of the yen's outlook. The US dollar exchange rate once hit nearly 9 New high of the month.

This week, several central banks, including Australia, the United Kingdom, and the European Central Bank, will announce the new interest rate results one after another. At present, the market generally expects that the Central Bank of China and the European Central Bank will keep interest rates unchanged, but once the above central banks show further relaxation in the future The willingness of monetary policy will combat the trend of high-yield currencies. Also of interest is the USA February non-agricultural employment report to be announced this Friday (March 9th). It is expected that the results of this data will continue to prove that the labor market in the USA is picking up, but investors' interpretation of this may be There are disagreements, which will increase the uncertainty of the foreign exchange market.

On the whole, we expect that the US dollar will continue to rebound for most major currencies this week, but many risk factors will also be consolidated this week to aggravate the short-term volatility of the foreign exchange market.

From a technical point of view, the US dollar index hit a near-low 13-week low during the session last week, followed by a strong rebound. At present, the short-term daily average has stabilized and rebounded. The 30-day moving average speed has slowed down significantly, and the KD indicator has been diverging upwards after the low bid. From the short-term perspective, the dollar’s ​​rising momentum is rapid, but last week’s close was just around the declining trend line since January 13 and the 38.2% of the golden line is not far away, so the dollar needs to further break through 79.50 before it can open up the upside. Then the resistance is at 79.70, 80.10 and the higher resistance is at 80.40. The initial support is at the 30-day moving average. Only by breaking below this line can the dollar be considered to return to the downtrend, and then support at 78.60, 78.10.

The exchange rate of the euro against the US dollar rose last week, and was hit by selling pressure after a fresh two-month high. Daily chart technical indicators showed that the short-term daily average began to turn lower and the 30-day moving average maintained a rising trend, but the increase rate slowed down, and the KD indicator was lower after the Sicha. The short-term exchange rate is under heavy selling pressure. It may seek support around 1.3150 at the beginning of the week, which is the 38.2% retracement of the nominal increase since January 13. The euro will extend its losses once it falls behind, with support at 1.3035/55, and a lower support at 1.2955/75. The upside pressure was at 1.3330. Only by returning to this position and stabilizing, the euro could resume its upward momentum. Later, the resistance was near the previous high of 1.3485.

In terms of commodity currencies, the Australian dollar’s ​​exchange rate against the US dollar oscillated last week, which also continued the main trend of the Australian dollar since February. The daily chart technical indicators show that the short-term average moving average is intertwined, but the 30-day moving average continues its upward trend, and the KD indicator has met resistance after rebound. It is expected that this week's exchange rate will be affected by the meeting of the Australian Central Bank's interest rate meeting. The short-term 30-day moving average will support the Australian dollar and then support the 1.06 level at the previous low. Once it breaks down effectively, it means that the head of the Australian dollar has formed and there may be a deeper fall in the market outlook. The key resistance at the top is at 1.0850, which is the upper limit of the range. If we can hold this position, it means that the Australian dollar will start a new round of rising market and challenge the higher resistance level of 1.10.

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