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GBP/USD: SELL Signal and Price Drop...he GBP/USD pair is facing downward pressure, with bears attacking the 1.2000 psychological level over the past three days. Brexit-related challenges and a rally in US Treasury bond yields are contributing to the decline, although there is limited action in the market ahead of the London open on Thursday. The Telegraph reported that the Democratic Unionist Party is dissatisfied with parts of the EU-UK departure terms over the Northern Ireland Protocol, while a Financial Times survey found that two-thirds of UK businesses believe government plans to disentangle British and EU law will cause more uncertainty and not increase economic growth. Bank of England Governor Andrew Bailey's neutral comments contrast with the hawkish remarks from Minneapolis Federal Reserve President Neel Kashkari, and the UK S&P/CIPS Manufacturing PMI data was downbeat compared to the upbeat details of the US ISM Manufacturing PMI. Additionally, inflation concerns and fading optimism over China's economic growth, as well as Sino-American tensions, are also putting downward pressure on the GBP/USD pair. US Treasury bond yields rose, reflecting market fears and weighing on S&P 500 Futures. The US Dollar Index (DXY) bounced off a one-week low to 104.60, up 0.17% intraday, amid a risk-off mood and firmer yields. With a light calendar, GBP/USD moves may be restricted and could remain southwards before Friday's key US ISM Services PMI and final readings of the UK S&P Global/CIPS Services PMI for February.
Short
by FOREXN1
10
NZD/USD bears step in at the highs and pressure SHORTThe NZD/USD currency pair has experienced a decline of approximately 0.27% from its high of 0.6257, falling to a low of 0.6238. This retracement occurred after a surge in commodity prices following the news of a Chinese demand revival. However, the Australian GDP growth slowed to 0.5% QoQ, missing consensus expectations of a 0.8% lift, which initially weighed on both the Australian and New Zealand currencies. The possibility of an earlier pause in hikes from the Reserve Bank of Australia also increased. Despite this, the kiwi currency saw a surge in speculative buying after reports of China's Non-manufacturing activity growth at a faster pace in February, and the Caixin/S&P Global manufacturing PMI reading surpassing expectations. The offshore yuan also jumped 1.3% to 6.8683 per dollar, its largest one-day gain since late November. The kiwi currency outperformed most of its peers, especially on the NZD/AUD cross, according to analysts at ANZ Bank. The EUR was another strong performer, boosted by the strong German CPI print, and the kiwi followed suit. Additionally, stop-loss buying on the NZD/AUD cross may have contributed to the price action. However, as there wasn't a clear catalyst for the kiwi's surge, the price action may subside in the coming days. The USD vibe has also shifted as strong data last week resulted in the DXY rallying hard as bond yields increased. However, the recent run of solid data has weighed on the dollar in a "good news is bad news" manner, raising fears that the Fed will engineer a recession. The strength of the kiwi currency may be due to a belated recognition of economic resilience and cyclone rebuilding. Overall, the kiwi has performed well despite the recent retracement, and its strength may persist in the coming days.
Short
by FOREXN1
7
EUR/USD:1.05 will be the bottom of the first quarter range - INGEUR/USD got a lift yesterday. Economists at ING believe that the 1.05 level will be the bottom of the first quarter range. “The continued re-pricing of the ECB curve is providing EUR/USD with some support against higher US rates and suggesting 1.05 will be the bottom of the EUR/USD's first quarter range after all. Certainly, the disinflation story is taking a back seat this month.” “Today, we have a few ECB speakers and we should expect a relatively quiet 1.0565-1.0645 range for EUR/USD.” – ING
Short
by FOREXN1
16
USD/JPY: Extra gains look likely above 136.90 – UOBFurther upside in USD/JPY should remain on the cards while above the 136.90 level according to UOB Group’s Economist Lee Sue Ann and Market Strategist Quek Ser Leang. Key Quotes 24-hour view: “Yesterday, we expected USD to trade within a range of 135.80/136.60. However, USD popped to a high of 136.93 and then dropped sharply to close unchanged at 136.00. Upward momentum has not improved and USD is unlikely to advance further. Today, USD is more likely to trade sideways between 135.70 and 136.90.” Next 1-3 weeks: “We highlighted on Monday (27 Feb, spot at 136.30) that after the strong rise late last week, upward momentum has been boosted and this will likely lead to further USD strength. We indicated, the next resistance level to watch is at 137.90. While USD rose to a fresh 2-week high of 136.93 yesterday, upward momentum has not improved further. USD must break and hold above 136.90 in the next 1-2 days or the chances of a move to 137.90 will rapidly diminish.”
Long
by FOREXN1
9
EUR/USD: Risks of 1.0500 being tested in the near term – INGEUR/USD trades in negative territory slightly below 1.0600. The pair could challenge the 1.0500 level, analysts at ING report. Hawkish expectations for ECB tightening to support EUR “Markets are currently pricing in around 130-140 bps of tightening before reaching the peak. This could offer some floor to the Euro.” “We expect any re-strengthening of the Dollar to see high-beta commodity currencies more at risk than the Euro for the time being. Still, the risks of 1.0500 being tested in the near term remain elevated.”
Short
by FOREXN1
28
XAU/USD bearish dominance continues.On Tuesday, the gold price fell back on the bear trail due to the re-gathering strength of the US Dollar. The market board saw a dominant trend of reassessing the Federal Reserve future rate hike path in a hawkish way. XAU/USD broke a five-day losing streak on Monday, which was just a small retracement on the way of the continuing downtrend for gold price. The bright metal is trading close to the round $1,800 figure, which provides immediate and psychological support. This week, a bunch of mid-tier United States macroeconomic releases could help shape how much more room gold price can have to the downside ahead of the crucial March 22 Federal Reserve (Fed) meeting. The market will be closely monitoring the next two weeks with Nonfarm Payrolls and Consumer Price Index releases, which should be more impactful. The US central bank will probably take all the data into account before delivering its next monetary policy plan, famously known as the dot plot. The Conference Board's Consumer Confidence Survey for February is the next big US macroeconomic release scheduled for 15:00 GMT, and will be scrutinized for more direction. Rather than the headline Consumer Confidence index, the one-year consumer inflation expectations could trigger a reaction. The US Dollar could lose interest and help Gold price stage a short-term recovery and vice versa, in case there is a pullback in this figure. On Monday, the US Census Bureau released the Durable Goods Orders data for January, which came out mixed and did not stage a big reaction from the markets. Gold price reacted modest-but-positively to this release as the US Dollar was somewhat sold across the board. The ISM will publish the Manufacturing PMI and the Services PMI on Wednesday and Friday, respectively, both at 15 GMT, which could be the most important releases of the week. If the ISM Services PMI report reaffirms that rising wage costs are feeding into accelerating price pressures in the sector, the US Dollar is likely to hold its ground against Gold. Hence, the Prices Paid Index component will be watched closely by market participants. The CME Group FedWatch Tool shows that markets are fully pricing in at least two more 25 basis points Federal Reserve rate hikes in March and May. Additionally, the probability of the Fed holding the policy rate unchanged in June stands at 25%. The market positioning suggests that the US Dollar doesn't have a lot of room on the upside, at least until the February jobs report and inflation data confirm or refute one more 25-bps hike in June. Investors will be watching the US Treasury bond yields, and 4% aligns as key resistance for the 10-year US T-bond yield. There could be a technical correction if that level stays intact. In that scenario, Gold price could turn north due to the inverse correlation with the US Treasury yields.
FOREXCOM:XAUUSDShort
by FOREXN1
11
NZD/USD faces a tough support at 0.6100 – UOBFurther selling pressure could motivate NZD/USD to challenge the solid support at the 0.6100 region in the next few weeks, note UOB . 24-hour view: “We expected NZD to weaken further yesterday but we noted, ‘oversold conditions suggest the major support at 0.6100 is unlikely to come under threat today’. We added, ‘There is another support at 0.6135’. NZD dropped to a low of 0.6132 before rebounding. The rebound amid oversold conditions suggests NZD has likely moved into a consolidation phase. In other words, NZD is likely to trade sideways today, expected to be between 0.6135 and 0.6195.”
Short
by FOREXN1
9
GOLD: A strong US dollar indicates a drop in the XAU/USD. As predicted in our previous idea, the XAU/USD is in a bearish trend with short pressure continuing. The gold price (XAU/USD) is still at its lowest level in two months, having fallen for five days in a row and printing a four-week low. Nonetheless, the yellow metal begins the week on the back foot, around $1,810, as bears cheer the strong US Dollar amid upbeat US economic data. Among the US data, the Federal Reserve's (Fed's) preferred inflation gauge offered a major blow to the XAU/USD price.
OANDA:XAUUSDShort
by FOREXN1
26
EUR/USD could trade down to 1.0460 – INGEUR/USD lost more than 100 pips last week. Dollar strength is set to keep the pair heavy, economists at ING report. Like the Fed, the ECB remains very much in hawkish mode “Investors fully subscribe to the ECB's message of a 50 bps hike on 16 March and then price a further 80 bps of tightening into year-end. This should be the key difference between the Fed and the ECB cycles. We think the Fed could be in a position to cut by year-end, while the ECB looks likely to keep rates at their peak throughout the majority of 2024.” “For EUR/USD, we think the strong Dollar view will dominate. Expect 1.0500 to be tested, with a chance that it briefly trades down to the 1.0460.”
Short
by FOREXN1
18
NZD/USD: Double Top and Price Drop.NZD/USD falls to three-month lows, grinding near intraday lows. NZD/USD bears hold the reigns at the lowest levels since November 2022, down half a percent near 0.6130 early Monday, as negative New Zealand (NZ) drivers clash with US Dollar demand. However, NZ Retail Sales for the fourth quarter (Q4) fell -0.6% year on year, compared to 1.5% predicted and 0.4% previously. According to Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway, "when interest rates rise, I expect consumption to slow." Meanwhile, solid US inflation-linked data combined with Fed policymakers' support for higher rates to boost Fed fund futures above 5.30%, versus 5.10% forecast by the US central bank in December. The recent round of sanctions imposed by the West on Russia has heightened market fears of increased geopolitical tension, which has boosted demand for the US Dollar as a safe haven.
Short
by FOREXN1
11
GOLD:Bears in command, all eyes on US PCE inflation.The price of gold continues to gradually decrease on Friday, despite a decline in 10-year US Treasury bond yields below 3.9% on Thursday. This has failed to trigger any gains for the bright metal, despite some slight downside limitation. The US Dollar remains strong in most of the market, which has contributed to the continued decline of gold prices. However, positive weekly Jobless Claims data has improved the market mood as the US labor market appears to be stable. Currently, gold prices are near year-to-date lows at around $1,820, which is serving as support. The market is now eagerly awaiting the release of the US Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve's preferred measure of inflation, scheduled for 13:30 GMT. Gold traders and investors will be watching the release closely, as Core PCE inflation is expected to rise by 0.4% on a monthly basis, but the annual figure is expected to decline to 4.1% in January from 4.4% in December. The reaction of the market should be clear, with lower-than-expected monthly PCE inflation weighing on the US Dollar and the opposite effect on the price of gold. Although the CPI report in January revealed that inflation remained sticky, it would be surprising to see this data have a long-lasting impact on markets.
OANDA:XAUUSDShort
by FOREXN1
8
GOLD: As expected, the price fell... he price of gold continues its downward trend after a bearish Wednesday, with the metal facing pressure from the release of somewhat hawkish Federal Open Market Committee (FOMC) Minutes. The US Dollar made gains against other currencies, and XAU/USD closed below a significant support level at $1,830 for the first time since January 3. Investors are now focused on Friday's release of the US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation. The FOMC Minutes revealed that all Federal Reserve policymakers agreed that more rate hikes would be necessary to achieve inflation objectives, with "a few participants" even suggesting interest rates should be raised by 50 basis points, which would accelerate the tightening of monetary policy. This hawkish tone helped US Treasury bond yields rally, which in turn supported the USD and weighed on the price of gold. Thursday's economic calendar includes the second reading of the US Gross Domestic Product (GDP) figures for the last quarter of 2022, but the market does not expect any changes to the preliminary estimate of 2.9% growth. The weekly Jobless Claims release and some speeches from Federal Reserve officials could bring some action to the price of gold. However, the most significant economic data to be released is the US Bureau of Economic Analysis (BEA) PCE Price Index on Friday. Gold traders and investors will closely monitor the data release, as Core PCE inflation is expected to rise by 0.4% on a monthly basis, but the annual figure is predicted to decline to 4.1% in January from 4.4% in December. The market reaction is expected to be straightforward, with softer-than-expected monthly PCE inflation weighing on the US Dollar and vice versa, with the price of gold reacting in the opposite direction. Given that the CPI report already revealed sticky inflation in January, it would be surprising if this data had a long-lasting impact on markets. The risks to the price of gold are skewed to the downside.
OANDA:XAUUSDShort
by FOREXN1
13
EUR/USD: As expected, the price fell... The EUR/USD pair has been struggling as sellers keep the price subdued, causing it to pierce the 1.0600 support level and hit new multi-week lows on Thursday. While the USD remains the focus, there is little news to influence the pair, leaving speculation around the Fed's tighter-for-longer stance as the primary driver of sentiment. However, expectations of rate hikes by both the ECB and the Fed in March appear firm. On the domestic front, final figures for inflation in January in the broader Euroland will be an important event, along with revisions of Q4 GDP Growth Rate, Initial Claims, and the Chicago Fed National Activity Index later in the NA session. Moving forward, price action around the European currency is likely to continue to follow dollar dynamics and the potential next moves from the ECB after another 50 bps rate raise in March. While concerns about a recession in the euro area have dwindled, they still remain a significant driver of the ongoing recovery in the single currency, along with the hawkish narrative from the ECB. Key events this week include the EMU Final Inflation Rate on Thursday and Germany's Final Q4 GDP Growth Rate and GfK Consumer Confidence on Friday. However, issues such as the continuation of the ECB hiking cycle, the impact of the Russia-Ukraine war on the region's growth prospects and inflation outlook, and the risks of inflation becoming entrenched are also on the back boiler.
Short
by FOREXN1
6
USD/CAD: Possible new bullish impulse in the next few days.The USD/CAD is barely unchanged ahead of the FOMC’s minutes release, though slightly tilted to the downside with losses of 0.05%. Traders worried that the Fed would raise rates further than expected, dampening the market mood during the last couple of weeks. At the time of this writing, the USD/CAD is trading at around 1.3539. Following the breakout of a dynamic trendline, the price continues to rise from the last pullback on the uptrend scenario's dynamic trendline. The price may continue to grow in the next few hours and days.
Long
by FOREXN1
8