Trading volatility increases into the end of the fiscal quarter
Financial market volatility saw a strong increase this week as traders and investors began adjusting their portfolios ahead of the end of the fiscal quarter. The price of gold rallied to a new multi-year high, hitting the $1,775 level, while the Nasdaq rallied to a new all-time high. Currency markets also experienced significant price fluctuations, with most major currencies moving within a large trading range. Significant market moves were also seen in the US and European bond markets this week. US bonds have recently received a strong boost as the US Federal Reserve announced an individual corporate bond-buying program.
- The USDJPY pair is only bearish while trading below the 107.00 level, key support is found at the 106.80 and 106.20 levels.
- The USDJPY pair is bullish while trading above the 107.00 level, buyers may test towards the 108.00 and 110.00 resistance levels.
Bitcoin came under pressure this week as risk-aversion in global stock markets, and selling from Bitcoin miners dragged the number one cryptocurrency lower. After rallying towards the $9,800 level in early week trade the BTCUSD pair started to retrace back towards the $9,000 support level as the upside momentum faded. Cryptocurrency traders and investors were also generally cautious as over $1 billion of Bitcoin options were set to expire this week. Ethereum also faded lower this week after staging an impressive rally towards the technically important $250.00 level.
- The BTCUSD pair is only bearish while trading below the $9,400 level, key support is found at the $9,000 and $8,700 levels.
- If the BTCUSD pair trades above the $9,400 level, buyers may test towards the $10,000 and $10,500 resistance level.
The New Zealand dollar fell sharply lower against a basket of currencies this week after the Reserve Bank of New Zealand struck a bearish tone during its latest policy meeting. The RBNZ left interest rates and its bond-buying program unchanged and noted that downward pressure remained on the domestic economy. The central bank also noted that the strength of the New Zealand dollar was a problem for the nation's exporters during the current economic crisis. The NZDUSD pair slump towards the 0.6450 level after previously trading towards the 0.6520 earlier this week.
- The NZDUSD pair is only bullish while trading above the 0.6450 level, key resistance is found at the 0.6500 and 0.6550 levels.
- The NZDUSD pair is only bearish while trading below the 0.6450 level, key support is located at the 0.6400 and 0.6300 levels.
The euro currency and the British pound rallied against the US dollar after PMI manufacturing data from the eurozone and United Kingdom economy came in better-than-expected. French Service PMI data saw a strong pick-up from last month, while German Manufacturing PMI data outperformed economists' expectations. The EURUSD pair rallied towards the 1.1350 level due to the upbeat sentiment towards the data, while the sterling recovered above the 1.2500 level, following last week's heavy sell-off towards the 1.2330 level.
- The GBPUSD pair is only bullish while trading above the 1.2500 level, key resistance is found at the 1.2540 and 1.2600 levels.
- If the GBPUSD pair trades below the 1.2500 level, key support is located at the 1.2380 and 1.2330 levels.