GBPUSD is moving in the Box pattern and the market has fallen from the resistance area of the pattern
GBPUSD – Wrestles with 1.2700 Amidst Pivotal Trading Week
UK BRC Like for Like retail sales data is scheduled today, it is expected to print at 1.6% in February month from 1.4% in January month. The US ISM Services index is expected to lower to 53.0 from 53.4 printed in the previous month. GBP is moving stronger against counter pairs due to positive hints from the UK Budget this week.
UK Calendar Light, Focus on US Labor Data and Fed Testimony
The UK has a sparse economic calendar this week, while investors eagerly anticipate another US Nonfarm Payrolls (NFP) labor report on Friday, assessing clues on the potential timing of the Federal Reserve (Fed) interest rate cuts.
On Tuesday, the UK BRC Like-For-Like Retail Sales for February is expected to show a 1.6% YoY increase, up from the previous 1.4%. In the US, Tuesday’s ISM Services Purchasing Managers Index (PMI) for February is forecasted to dip to 53.0 from the previous month’s 53.4.
US labor data takes center stage, with ADP Employment Change on Wednesday and Friday’s NFP report. ADP Employment Change is anticipated to surge to 150K for February, compared to the previous 107K. This Friday’s NFP is projected to retreat to 200K from the prior 353K.
Fed Chairman Jerome Powell is set to testify before the US Congress’ House Financial Services Committee on the Fed’s Semi-Annual Monetary Policy Report. The two-day central bank showing starts on Wednesday, with expectations of impactful statements and headlines.
XAUUSD – GOLD Price Flirting with Multi-Month Peak as Bulls Await Fed Rate-Cut Signals
Gold prices are at multi month higher due to rate cuts expected from FED is at June month. Israel did counter attack on Palestinian capital of Ramallah area yesterday boosted Gold prices further in the market.
XAUUSD Gold price is moving in an Ascending channel and the market has reached the higher high area of the channel
Gold (XAU/USD) attracts buyers near $2,110 after an intraday dip, trading close to a three-month high amid Middle East tensions and concerns about China’s economic slowdown. The weaker equity markets favor gold as a safe-haven asset. The US Dollar struggles due to expectations of a June rate cut by the Federal Reserve, further supporting gold.
Traders await Fed Chair Jerome Powell’s testimony and key US macro data, including Nonfarm Payrolls on Friday, for directional cues. Tuesday’s US ISM Services PMI release may offer short-term opportunities.
Recent events, such as disappointing US data and less hawkish Fed comments, lifted gold above $2,100. Geopolitical risks and Fed policy expectations keep the US Dollar defensive. A counter-terrorism operation in Ramallah raises Middle East tensions.
Investors closely watch Powell’s testimony and upcoming US macro data for XAU/USD’s next move. The week starts with the US ISM Services PMI, leading to anticipation for the Nonfarm Payrolls report on Friday.
China’s Premier Li Qiang’s remarks at the National People’s Congress suggest an uncertain economic recovery. China’s 5% GDP growth target for 2024 fails to boost confidence in XAU/USD.
EURUSD – Hovers at Near-Term Resistance, Pinned by Rate Cut Expectations
The Eurozone Sentix investor confidence data came at -10.5 in March from -12.9 in the previous reading. The ECB is more probably to hold on to rates at 4.5% in this week’s meeting. So Euro currency moving stronger against counter pairs.
EURUSD is moving in the Box pattern and the market has reached the resistance area of the pattern
EUR/USD Rangebound Ahead of Key Data and Central Bank Actions
The pair has maintained a week-long range, with investor focus turning to crucial US labor figures to gauge the Federal Reserve’s potential moves.
Central banks heavily influence the Euro (EUR) and the US Dollar (USD) this week. Fed Chairman Jerome Powell testifies before the US Congress’ House Financial Services Committee on the Fed’s Semi-Annual Monetary Policy Report on Wednesday and Thursday. The European Central Bank (ECB) will announce its latest rate decision during Thursday’s European market session.
In the daily digest of market movers, EUR/USD remains in familiar territory as traders await pivotal data. Europe’s Sentix Investor Confidence for March reached an 11-month high at -10.5, up from the previous -12.9. High-impact data kicks off on Wednesday with European Retail Sales for January anticipated to decline to 1.3% YoY, reflecting ongoing economic weakness.
On Wednesday, the US ADP Employment Change is expected to rise to 150K from the previous 107K, serving as a precursor to Friday’s US Nonfarm Payrolls (NFP) report. The ECB’s Thursday rate call is expected to maintain the main refi rate at 4.5%. Investors hope for softened US NFP labor figures to increase the likelihood of a Fed rate cut.
Tuesday’s forecast includes the US ISM Services PMI, expected to decrease to 53.0 from 53.4.
USDJPY – Tokyo CPI Rises to 2.6% YoY in February, Up from 1.8% Previously
Japanese Tokyo CPI index reading for February month came at 2.6% YoY versus 1.8% previous reading. Inflation increasing is positive for BoJ to hike in coming months. Yen is stronger after the news Flashed.
USDJPY is moving in the Box pattern and the market has reached the resistance area of the pattern
In February, Tokyo Consumer Price Index (CPI) jumps to 2.6% YoY, up from the previous 1.8%, according to the Statistics Bureau of Japan.
The Tokyo CPI ex Fresh Food, Energy slightly drops to 3.1% YoY from January’s 3.3%. Meanwhile, the Tokyo CPI ex Fresh Food aligns with market expectations, rising to 2.5% for the month.
USDCHF – Holds Narrowly Above 0.8850, Focus on US Services PMI
The Swiss CPI for February came at 1.2% which is lowered than the 1.1% expected, but it is lowered than the 1.3% printed in January month. So Swiss Franc moved down against counter pairs the last day after the date was printed.
USDCHF is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
US Services PMI in Focus as USD/CHF Trades at 0.8855
The Institute for Supply Management (ISM) is set to release the US Services PMI report, with expectations for a slight decrease from 53.4 in January to 53.0 in February. Currently, USD/CHF is trading at 0.8855, showing a 0.08% gain for the day.
Atlanta Fed President Raphael Bostic emphasizes no urgency to cut interest rates, suggesting it may be suitable for the Fed to approve two quarter-point rate cuts by year-end. Financial markets predict a rate cut this year, with a 99.5% chance priced in by December, according to the CME Group’s FedWatch tool.
Swiss Consumer Price Index (CPI) for February eased to 1.2%, beating the market expectation of 1.1%. Despite this, it marks the lowest inflation rate since October 2021.
The upcoming US ISM Services PMI and Fed Chair Jerome Powell’s testimony will influence USD/CHF. Hawkish comments from Fed officials may boost the Greenback, providing tailwinds for USD/CHF. The focus this week remains on key US employment data, including Nonfarm Payrolls (NFP), Average Hourly Earnings, and the Unemployment Rate.
USD INDEX – USD in Decline as Investors Await Weeklong Labor Market Data
The US Dollar moving lower against counter pairs, This week Labour data will decide the further movements in the US Dollar. The Non-Farm Payrolls is expected at 200k which is lower than the January month reading. The rate cut bets are more in June month as per poll results.
US Dollar index is moving in an Ascending channel and the market has reached the higher low area of the channel
Market Focus on Labor Data and Dovish Fed Signals
Investors closely watch incoming data, particularly the crucial Nonfarm Payrolls (NFP) figures for February later this week, influencing potential market variations.
The US labor market’s impact on the Federal Reserve’s (Fed) easing cycle, expected to start in June, suggests a potential shift to a dovish stance if employment slows down. This dovish outlook, signaling lower interest rates and possible near-term cuts, could lead to a weaker US Dollar.
In the daily digest of market movers, the US Dollar Index (DXY) starts the week weak, with attention on labor market data. NFP predictions for February anticipate the addition of 200K jobs, indicating a slowdown from January. Investors will scrutinize Average Hourly Earnings and the Unemployment Rate for wage inflation.
Key employment figures expected this week include JOLTs Job Openings, ADP Employment Change for February, and weekly Jobless Claims. Market expectations show no likelihood of a rate reduction at the upcoming March 20 meeting, with probabilities increasing to 25% on May 1 and reaching 90% for the June meeting.
US Treasury bond yields are up, with 2-year at 4.59%, 5-year at 4.20%, and 10-year at 4.22%, potentially limiting downside for the session.
USDCAD – Stays Below 1.3600, Focus on BoC Rate Decision
The bank of Canada is expected to hold the interest rates at 5.0% at this week meeting. June month there will be rate cut is widely expected. So Canadian Dollar moving down against counters pairs.
USDCAD is moving in an Ascending channel and the market has reached the higher high area of the channel
BoC Rate Decision: USD/CAD Holds at 1.3575 Amid Oil Price Decline
The Bank of Canada (BoC) is set to announce its interest rate decision with no expected changes on Wednesday. The Loonie faces pressure from falling oil prices, providing support to the USD/CAD pair, currently trading at 1.3575. The Federal Reserve (Fed) anticipates maintaining rates in the 5.25% to 5.5% range in March, with potential rate cuts in June depending on economic indicators. Fed President Raphael Bostic emphasizes no urgency for rate cuts given a thriving economy. Conversely, the BoC is likely to keep its key interest rate at 5.0%, with an 80% chance of a rate cut around June. The press conference may reveal hints about the timing of rate cuts, and dovish remarks could impact the Canadian Dollar.
Market attention also turns to the US ISM Services PMI and Fed Chairman Jerome Powell’s Senate testimony ahead of Friday’s US Nonfarm Payrolls (NFP).
EURJPY – Japan’s Top FX Diplomat, Kanda, Warns of Higher Interest Rates Ahead
Japan Top Currency Diplomat Masato Kanda said we must go for higher interest environment from 1.1% to 1.9%, we must balance the primary budget of 2025-2026 by achieving the fiscal management. We must support for Ukraine in all ways.
EURJPY is moving in an Ascending trend line and the market has reached the higher low area of the trend line
Japan’s chief currency diplomat, Masato Kanda, warns of a need to prepare for a higher interest rates environment, anticipating an increase from 1.1% to 1.9%.
He emphasizes the importance of responsible fiscal management, aiming for primary budget balancing in FY2025/26. Kanda notes the growing challenges to the international global order, including those from the “global south.” He stresses the need for unwavering solidarity, including support for Ukraine.
AUDUSD – China’s February Caixin Services PMI falls to 52.5, missing the expected 52.9
China Caixin Services PMI data ( Feb) came at 52.5 from 52.7 in January month. Economists Dr. Wang Zhe said the supply and demand picked up in the 14th straight month, Service exports increased for the 6th straight month. AUDUSD fell after the data was printed.
AUDUSD is moving in the Descending channel and the market has reached the lower low area of the channel
China’s Services PMI unexpectedly drops to 52.5 in February, down from January’s 52.7, according to Caixin data. The market anticipated a 52.9 reading. Key points include softer business activity growth, a decline in staff numbers for the first time in three months, and increased output prices due to rising costs.
Dr. Wang Zhe, Senior Economist at Caixin Insight Group, notes that supply and demand continued to expand in February amid a market upturn, with business activity and new orders growing for the 14th consecutive month.
NZDUSD – Holds Below 0.6100, Focus on US Services PMI
Atlanta FED President Raphael Bostic said there is no emergency for rate cuts in the near term in the US, There will be 25 basis points rate cuts within this year. US Services PMI is much more waiting today for further directions of NZDUSD currency.
NZDUSD is moving in the Box pattern and the market has reached the support area of the pattern
Financial Markets Await Key Data, Fed Guidance
This week, financial markets exercise caution as they anticipate economic data and policy cues. The US February ISM Services PMI is expected later in the day, with the pair trading near 0.6095, a 0.02% increase on the day.
Atlanta Fed President Raphael Bostic notes the Fed feels no urgent pressure to cut interest rates, emphasizing a robust economy and job market. Bostic suggests it might be appropriate for the Fed to approve two quarter-point rate cuts by year-end. San Francisco Fed President Mary Daly echoes readiness to lower rates as needed but emphasizes no urgency given economic strength.
Investors await Fed Chair Jerome Powell’s Wednesday testimony for insights on the economy and monetary policy. Hawkish remarks could boost the US Dollar, posing a challenge for the NZD/USD pair.
China’s economy faces challenges from a property sector crisis, impacting the world’s second-largest economy. The National People’s Congress starting Tuesday will be closely watched for stimulus plan details, potentially influencing the China-proxy NZD and limiting downside for NZD/USD.
Key events include the US ISM Services PMI, final S&P Global Services PMI, Factory Orders, RCM/TIPP Economic Optimism Index, and a speech by the Fed’s M. Barr. These events may provide clarity and direction for the NZD/USD pair.
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