09-Mar-2021

1) GBP/USD: 1.3920 Is A Tough Nut To Crack For The Bulls
2) AUD/USD Steadily Climbs Back To 0.7700 Mark, Fresh Session Tops
3) USD/JPY Corrects From Multi-Month Tops, Slides To Daily Lows Around 108.65 Region

1) GBP/USD: 1.3920 Is A Tough Nut To Crack For The Bulls

GBP/USD fails to find acceptance above the 1.3900 and recedes, although holds a major portion of intraday gains so far this Tuesday.

Broad-based US dollar weakness, amid an extension of the retreat in the Treasury yields, continues to aid the recovery in the cable from the 1.3800 level.

From a short-term technical perspective, as observed on the four-hour chart, the GBP bulls look to challenge the powerful barrier at 1.3920, which is the convergence of the falling trendline resistance and the bearish 50-simple moving average (SMA).

A four-hour candlestick closing above the latter would confirm a falling wedge breakout for the major, with the next major hurdle seen at the horizontal 100-SMA at 1.3959.

The relative strength index (RSI) has reclaimed the bullish territory, now trading at 51.90, allowing room for more upside.

It’s worth noting that the price has pierced through the critical 200 and 21-SMAs earlier on, boosting the odds for an extended recovery.

On the flip side, the 21-SMA resistance now support at 1.3865 could be tested on any pullback.

The downside could be then protected by the horizontal 200-SMA at 1.3842.

All in all, the path of least resistance appears to the upside on a sustained break above the 1.3920 barriers.

2) AUD/USD Steadily Climbs Back To 0.7700 Mark, Fresh Session Tops

The AUD/USD pair refreshed daily tops during the early European session, with bulls now looking to build on the intraday ascent further beyond the 0.7700 mark.

The pair staged a goodish rebound from the 0.7620 region, or fresh one-month lows touched earlier this Tuesday, and was supported by a combination of factors. The US dollar witnessed some profit-taking from three-and-half-month tops, which was seen as a key factor lending some support to the AUD/USD.

US Treasury Secretary Janet Yellen said on Monday that a massive US stimulus package would provide enough resources to fuel a very strong US economic recovery. Yellen further added that there are tools to deal with inflation and led to a modest pullback in the US bond yields and undermined the USD.

Apart from this, the underlying bullish sentiment in the financial markets further weighed on the greenback’s safe-haven status and benefitted the perceived riskier Aussie. That said, the upbeat US economic outlook should help limit the USD losses and cap the upside for the AUD/USD pair.

Investors remained optimistic about the prospects for a relatively faster US economic recovery amid the impressive pace of COVID-19 vaccinations. The narrative of a strong sequential economic recovery was reinforced by the stunning US monthly jobs report for February released last Friday.

Hence, it will be prudent to wait for some strong follow-through buying, beyond the 0.7720 supply zone, before confirming that the recent corrective fall has run its course. This, in turn, will set the stage for the resumption of the AUD/USD pair’s previous strong bullish trajectory.

In the absence of any major market-moving economic releases from the US, the US bond yields will continue to play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment, will produce some meaningful trading opportunities around the AUD/USD pair.

3) USD/JPY Corrects From Multi-Month Tops, Slides To Daily Lows Around 108.65 Region

The USD/JPY pair witnessed some selling during the early European session and refreshed daily lows, around the $108.70-65 region in the last hour.

The pair prolonged its recent strong bullish trajectory and continued scaling higher through the first half of the trading action on Tuesday. The momentum pushed the USD/JPY pair further beyond the 109.00 mark, to the highest level since June 2020, though lost steam amid some US dollar profit-taking.

US Treasury Secretary Janet Yellen said on Monday that a massive US stimulus package would provide enough resources to fuel a very strong US economic recovery. Yellen further added that there are tools to deal with inflation and led to a modest pullback in the US bond yields, which undermined the USD.

Meanwhile, the passage of a much-awaited $1.9 trillion fiscal spending bill remained supportive of a relatively faster US economic recovery from the pandemic. This, in turn, should continue to underpin the greenback and help limit the downside for the USD/JPY pair, at least for the time being.

Apart from this, the underlying bullish sentiment in the financial markets could cap the upside for the safe-haven Japanese yen and further extend some support to the USD/JPY pair. This, in turn, warrants some caution for bearish traders and before positioning for any meaningful corrective fall.

There isn’t any major market-moving economic data due for release from the US on Tuesday. Hence, the US bond yields will play a key role in influencing the USD price dynamics. Traders might further take cues from the broader market risk sentiment to grab some opportunities around the USD/JPY pair.