As we head into Friday, March 21, 2025, global markets are positioned for a session that could see heightened volatility, driven by key economic data releases and central bank commentary. The U.S. dollar remains in focus as traders digest the latest economic indicators and prepare for upcoming statements from Federal Reserve officials.
In the currency markets, the EUR/USD pair continued its downward trajectory, pressured by weak European economic data and a stronger U.S. dollar following positive jobless claims and Philly Fed Manufacturing figures. The GBP/USD pair remained volatile, initially dropping due to a rise in UK claimant count data but recovering after the Bank of England maintained its policy stance. Meanwhile, the USD/JPY pair rebounded as risk sentiment improved, supported by firmer U.S. economic releases and a stable Fed outlook.
EUR/USD
Technicals in Focus
The EUR/USD pair extended its losses, closing near the 1.0842 level after a prolonged downward move. The euro remains under pressure as recent European economic data, including weaker CPI figures, reinforced concerns over the region’s economic stability. On the technical front, the MACD indicator remains below the zero line, signaling sustained bearish momentum. The Stochastic Oscillator is in oversold territory, suggesting a potential corrective bounce. The 14-day RSI continues to show bearish bias, reflecting the pair’s ongoing weakness.
Trading Strategy: Neutral to Sell
- Sell below 1.0850-1.0830, targeting 1.0800-1.0780, with a stop loss above 1.0880.
- Alternatively, buy above 1.0880 with targets at 1.0900-1.0930, with a stop below 1.0850.
GBP/USD
Technicals in Focus
The GBP/USD pair experienced notable fluctuations, initially dropping to 1.2940 before recovering to 1.2965. The volatility stemmed from mixed UK economic data, with employment figures showing some improvement but wage growth slowing. The MACD is hovering around the zero line, indicating weak momentum. The Stochastic Oscillator is neutral, providing no clear directional bias. The 14-day RSI suggests a slight upward tilt, indicating potential short-term recovery.
Trading Strategy: Neutral to Buy
- Buy above 1.2970-1.2950, targeting 1.3000-1.3030, with a stop loss below 1.2920.
- Alternatively, sell below 1.2920 with targets at 1.2890-1.2860, with stops above 1.2950.
USD/JPY
Technicals in Focus
The USD/JPY pair rebounded significantly, climbing to 148.94 after hitting an earlier low of 148.21. The pair’s recovery was driven by a combination of stronger U.S. data and a retreat in risk-off sentiment. The MACD is turning positive, indicating renewed bullish momentum. The Stochastic Oscillator has moved into overbought territory, suggesting that a temporary pullback could occur. The 14-day RSI remains bullish, reflecting ongoing upward movement.
Trading Strategy: Neutral to Buy
- Buy above 148.90-148.70, targeting 149.20-149.50, with a stop loss below 148.50.
- Alternatively, sell below 148.50 with targets at 148.20-147.90, with stops above 148.80.
Market Outlook
Looking ahead, traders will closely watch the EU Leaders Summit, where discussions on economic policy and inflation control could impact the euro. In the U.S., FOMC Member Williams’ speech will be in focus as markets assess the Fed’s stance on monetary policy following the latest economic data. Additionally, Canadian retail sales data could introduce volatility in CAD pairs, particularly if figures deviate from expectations.
Overall, the market remains sensitive to central bank commentary and economic indicators, with potential for increased volatility as traders react to new developments.