Daily market review 01 March

The beginning of spring starts by a positive buying volume of the US dollar. Since the beginning of the day the US currency index was rising by 0.37%, and since 15:15 GMT, yesterday the measured growth equals to 1%. The main event, due to which, we could observe so much buying pressure of the dollar today, was the speech of the US President Trump in front of the Congress. In his speech, he outlined most of the main principles, which appeared during the election campaign, which removes unnecessary fears about the upcoming changes to the firm policy of the country. Moreover, it helps financial market participants to better believe in a possibility of an early increase in the interest rate.

Percentage wise the rate hike expectations based on yesterday figures has resulted from 35.4% to 64.6%.
For the current weakness of the EUR, such selling pressure can be preserved up to the level of 1.0500.

The Yen falls as well against the US dollar, which demonstrates the absolute dependence on the foreign exchange market sentiment towards the US Dollar. Despite the fact that we had 150 PIPs rise on the USDJPY pair, straight to the level of 113.60, we would not recommend any counter trend trading on this pair today. Given the current dynamics of the US Dollar activity, buyers are waiting for the first bearish correction, and that might occur not earlier than within another 100 points move.

As per our yesterday thoughts, the pound traders laid within the GBPUSD pair in addition to the strong US Dollar based on their believe that there is a probability of a referendum on the Scottish independence.

For the time being, we have found a new support in the area of ​​1.2350, which already prevented previous attempts for price reduction on the 7th of February. If the change of business activity in the UK manufacturing sector will demonstrate today a moderately bullish trend, we can expect that this level of support will continue to hold the price at this time. If the actual figure is lower than 55.9, the next support for the GBPUSD will be the level of 1.2300.

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