New EU Lockdowns and Yellen’s Remarks Hurt Market Sentiment

USD GAINS, RISK ASSETS SLIDE ON RISK-OFF TRADING

The US dollar traded higher against all but one of the other G10 currencies on Tuesday and during the Asian session Wednesday. It gained the most versus NOK, NZD, AUD, and CHF in that order, while it lost some ground only against JPY.

HANG SENG — TECHNICAL OUTLOOK

The technical picture of the Hang Seng index on our daily chart shows that after peaking in mid-February, the price is now slowly drifting lower, while trading below a short-term tentative downside resistance line taken from the high of February 18th. Today, the index moved further south, overcoming some key support areas, at 28342 and 28034, marked by the lows of March 9th and January 29th respectively. At the same time, the price fell below the 100-day EMA, and if it continues to trade below it, there is a decent chance to see some lower levels being hit. For now, we will take a bearish approach.

USD/CHF — TECHNICAL OUTLOOK

Yesterday, USD/CHF broke through one of its key resistance barriers, at 0.9320, which is marked near the highs of March 5th, 10th, 12th and 19th. Now the pair is showing willingness to move further north, as it continues to balance above that broken resistance barrier, which now might turn into strong support. We will take a bullish approach for now.

AS FOR THE REST OF TODAY’S EVENTS

During the early European morning, we already got the UK CPIs for February. The headline rate fell to +0.4% yoy from +0.7%, instead of rising to +0.8% as the forecast suggested, while the core rate slid to +0.9% yoy from +1.4% yoy, with the forecast being for an unchanged print.

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