Today's economic calendar is quite light for Tier 1 data points with a smattering of Central Bankers talking about different policies throughout the whole day.
In the UK we also have Chancellor Sunak and Italian Finance Minister Franco speaking about priorities for when we come out of the coronavirus pandemic.
The UK employment data this morning has come in under market expectations, with the UK Average earnings (Ex-Bonus) for January 2021 coming in at 4.2% which is 0.1% above the previous month but 0.2% under market analysts' predictions.
At the US market, open traders will be looking to the US New Home Sales-Units for February, which is expected to amount to 0.875 million.
The GBPUSD has started the day on the backfoot and is currently trading within yesterday's tight daily range. The fall from the high of February 24th, 2021 to the March lows has resulted in the formation of a bearish pennant pattern and a break below the rising trend line could signal a new impulsive move lower towards the 1.3650-1.3600 area. The ActivTrader sentiment indicator has traders positioning to the long side by 71% bulls to 29% bears.
The EURGBP chart clearly shows the extent of the bear market the currency pair has been in for the entire year and if it were to gain some ground with a weaker UK pound the Ichimoku cloud would signal areas to look for first resistance, which would currently be around the 0.8670-0.8650 area on the chart.
Crude oil had a very indecisive day yesterday and technically may have come to the end of its little squeeze higher. The chart pattern is a very bearish flag and we’re just breaking lower, which would set up a possible test of the $54-$53 price levels should we get a measured move. Today API weekly stock data is released at 16:30GMT.
On the US dollar index, yesterday's price action was an inside-day consolidation pattern. If we take the last 3 months' price action as a guide to momentum, the US dollar is still bullish, so on the Daily chart, we should expect the momentum to lead price higher. If we do break higher than yesterday's range, the next resistance levels are the March 2021 highs and then the 200 days period ema. Traders and investors are still closely monitoring the US yields. The benchmark 10-year Treasury note withdrew for the second day to 1.65% which is the lowest for almost a week.
The day could be directed by the overnight session and the negativity around China. The Shanghai Composite was down 32 points as the EU and US especially talk and impose sanctions against China.