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Dollar and NFP jobs data The dollar demand was getting muted towards the end of the trading week but reemerged on Thursday as the ECB dumped the euro and risk-off sentiment intensified. The majors are making some recovery attempts ahead of the US NFP jobs report due later today. Considering a rather high correlation between the ADP and NFP numbers, we could see solid results for February. The ADP employment report showed the economy added 183K jobs last month, marginally below the 189K expected. By the way, the January reading was revised strongly upwards to 300K from 213K originally reported. However, considering that the Fed policy makers have repeatedly indicated that the country’s labor market is tight already, the focus will likely shift towards the wages data. So should the earnings numbers disappoint, the greenback could lose ground across the board after a strong start of the week. As for the EURUSD pair, dismal jobs and wages data may help the prices settle above the 1.12 level after yesterday’s plunge to the low of 1.1175. But any potential rally will likely be short-lived and limited due to the general euro weakness.
NSE:DOLLAR
by HelenRush
AUDUSD shifts focus to US jobs report  AUDUSD managed to bounce off fresh three-month lows despite weak retail sales data. The pair extended losses to the lows near 0.7020, where it seems to have found some bids and turned positive on the day. On the upside, the recovery is limited by the 0.7050 area.  The Australian retail sales recovered just by 0.1% in January versus +0.3% expected, after a decline by 0.4% in the previous month. The report added to a growing list of concerns over the strength of household spending. Meanwhile, the trade balance registered a thirteenth straight surplus. January’s trade balance was AUD4.55 billion, well above the 2.75 billion expected. The release helped the aussie to balance out the negative impact from retail sales data.  The next key event for AUDUSD is tomorrow’s US labor market data. The dollar seems to be losing the upside momentum after the earlier rally but the potentially strong figures could make USD demand reemerge. In this scenario, the pair could resume the decline and challenge the mentioned support, targeting the 0.70 figure.
by HelenRush
Gold: timid recovery attempts Gold prices extended recent loses to fresh late-January lows around $1,281, where the bullion received some support and finished marginally higher yesterday. On Wednesday, the precious metal continues timid recovery attempts despite the dollar remains strong after the data showed a rebound in US housing and services activity. Geopolitical headlines seem to be underpinning safe-haven gold demand at the moment, as North Korea is reported to be restoring part of a missile test site it began dismantling earlier. On the other hand, investor optimism over the upcoming US-China trade deal still caps the appeal of the yellow metal. Meanwhile, Goldman Sachs remained positive on in its latest commodities report. The bank raised its forecast by $25 over the next three, six and twelve months to $1,350, $1,400 and $1,450 an ounce, respectively. In the short term, the bullion needs to get back above the $1,300 threshold to regain the upside momentum. A daily close above this local resistance will improve the immediate technical outlook for the metal. But no strong rally is expected at the moment as risk-on sentiment still prevails in the financial markets and dollar demand remains robust.
TVC:GOLD
by HelenRush
Oil market needs news on trade talks Crude oil prices rose on Monday, with Brent touched a high of $66.30 but failed to stay elevated above the $66 threshold. Today, the prices are retreating, clinging to the $65 mark. The sentiment in the market continues to depend mainly on the risk trades. Risk-on tone has abated on Tuesday as Chinese officials have set the lowest growth target in nearly three decades and warned of ‘tough’ challenges facing the world’s second-largest economy. The country’s growth was set at 6.0 to 6.5%, down from a target of 6.5% last year. This fueled concerns over the global growth and the prospects for global oil demand later this year. Investors are also nervous due to lack of fresh news and details on the US-China trade relations. On the other hand, hopes for striking a deal later this month will likely continue to underpin the oil market and risk sentiment in general during the coming weeks. In the short term, Brent needs to hold above the $65 figure in order to make fresh bullish attempts above $66. The key resistance comes at $66.50, while on the downside, the intermediate support lies around $64.85.
OANDA:BCOUSD
by HelenRush
EURUSD: bearish risks persist The EURUSD pair is still unable to break above the 1.14 figure that the prices were challenging last week. On Monday, the common currency continues to lose ground amid a better tone around the dollar. The pair reached one-week lows and threatens the 1.13 level that capped the recent downside pressure. Over the weekend, Trump said the dollar was too strong and criticized Fed’s Powell for hiking rates. But the greenback seems to have shrugged-off the President’s comments as he also pointed to the growing economy. Besides, the Federal Reserve has already taken a pause in tightening and turned more ‘dovish’. In a wider picture, the dollar still looks more attractive than the euro as the economic fundamental in the US are more favorable, while the euro zone economy continues to show signals that warrant caution. Technically, the euro could lose the 1.13 mark in the near term if the upside pressure on the greenback persists. On the other hand, a better risk sentiment over the US-China trade deal caps the selling pressure on the high-yielding euro.
by HelenRush
USDJPY: bullish breakthrough amid risk-on sentiment USDJPY extends the rally on Friday, with the pair refreshed 2019 highs marginally below the 112.00 handle. The greenback broke above the 111.00 barrier as well as the 100- and 200-DMAs, which added to the bullish technical picture in the short term. The ascent is due to a rally in riskier assets amid rising hopes of striking a US-China trade deal after positive comments from the US officials. Global investors are also cheering the news that MSCI has accelerated an increase in China’s weighting in its flagship emerging markets index. Besides, China manufacturing PMI exceeded expectations in February, though remained below the 50 mark. The pair was ready for a bullish breakthrough but lacked the catalyst due to unstable risk sentiment in the global financial markets. Now, when demand for high-yielding assets reemerged, the safe-haven yen feels uncomfortable, while the buck derives additional support from stronger-than-expected US GDP data and somehow positive Powell’s comments on the economy. Technically, the pair may challenge the 112.00 resistance in the near term and target the 112.20 area should the price manage to hold above the 111.40 figure. Another portion of positive US data could open the way higher in the short term. Otherwise, the dollar will see some profit-taking.
by HelenRush
Gold needs a catalyst Gold prices are trying to resume the ascent after a drop on Wednesday. The yellow metal failed to stay above the $1,320 figure and slipped to two-week lows below $1,317, where buyers reemerged. Today, the bullion is making attempts to regain the $1,323 threshold amid souring risk sentiment. Stocks are falling on Thursday amid the fading optimism over the US-China trade talks after comments by the US trade chief Lighthizer who sent a clear signal that any deal between the two economies should be all or nothing. His statement contrasts with Trump’s more optimistic remarks earlier this week when he raised hopes for striking a deal. Poor Chinese data added to investor concern. The manufacturing activity contracted more quickly than in January due to the weeklong Lunar New Year holiday. The official manufacturing purchasing managers index dipped to 49.2 from 49.5 in the previous month. This is the lowest reading since February 2016. As such, risk-off sentiment will likely prevail in the global financial markets in the short term, which should support the precious metal as a safe-haven asset. Technically, the bullion needs to stay above the $1,320 level in order to resume the ascent afterwards. On the other hand, gold is trading at relatively high levels now and may need a stronger catalyst to attract demand.
TVC:GOLD
by HelenRush
Oil struggles to regain the bullish impetus After Trump interrupted the oil market rally, Brent crude struggles to regain the upside momentum as traders continue to digest the message from the US leader. The futures have recovered by 1% yesterday and trade almost unchanged on Wednesday, trying to find further direction. The API report was fairly bullish, with crude oil stockpiles unexpectedly fell by 4.2 million barrels. Moreover, gasoline stockpiles declined by 3.8 million barrels. However, market reaction to the release was short-lived as investors are waiting for the official data from the EIA to confirm the decline in stockpiles. Meanwhile, OPEC has indicated it will continue to withhold supply despite pressure from U.S. President Donald Trump. Saudi oil minister Khalid Al-Falih said there is likelihood of output cuts extension. He pointed to the need to continue to moderate oil production in the second half of 2019 and noted that oil market is responding to output cuts. So far, traders are apathetic to the positive signals and comments in the industry, but as soon as the market digests Trump’s message, Brent could resume the ascent assuming that the risk-on sentiment will prevail in the global financial markets.
OANDA:BCOUSD
by HelenRush
AUDUSD: longer term prospects look more bearish AUDUSD feels relatively comfortable in the familiar range, with the immediate resistance comes at last week’s highs around the 0.72 figure, while on the downside, the selling pressure is capped by the 0.7060 handle. The short term technical outlook looks neutral, while in the longer term, the pair could face some difficulties. The aussie feels a drag from the decision by some Chinese ports to ban imports of Australian coal. Additionally, despite the general optimism, there is now some skepticism over the prospects of striking a trade deal between the US and China, even as Trump extended the deadline on Sunday. Souring risk sentiment could boost the US dollar demand, which in turn may put the Australian currency under pressure. Besides, there are some downside risks for AUD from RBA. The upcoming policy meeting due on March 5 will hardly bring any changes in rates, but in the month to come, the central bank may adopt a more dovish tone and cut rates in the second half of the year. Therefore, longer term prospects for AUDUSD look more bearish in this context.
by HelenRush
Euro may lose ground this week The common currency appreciated last week and has settled above the 1.13 threshold after a short-lived jump to a high of 1.1370 earlier in the week. The recent rally seems to have stalled, while the current recovery attempts look too modest at this stage. Despite the risk-on sentiment across the board, EURUSD fails to show a sustainable rally. Such dynamics shows that the worries over the euro zone economy continue to weight prices and drive the euro appeal lower. At the same time, the Federal Reserve seems to be ready to resume hiking rates this year even though the central bank decided to make a dovish shift citing global and local risks. A stiff resistance at 1.1370 and the overall downtrend that remains intact suggest the pair is headed lower in the days to come. So the risk of breaking below 1.13 remains, with the first target lies at 1.1275. Despite the bearish risks seem to be abating on the short term, the upside potential remains limited at this stage, and the technical picture could improve provided that the greenback will lose ground across the board.
by HelenRush
USDJPY: bullish breakthrough is possible USDJPY remains in a limited range this week, with the 111.00 figure continues to act as the key resistance. The pair dipped marginally yesterday amid investor optimism over the US-China trade talks and another portion of weak economic data from the US. On Friday, the dollar is trying to resume growth but lacks the impetus against the backdrop of mixed investor sentiment across the globe. The overall hope that the US and China will finally conclude a trade deal keeps riskier assets afloat and caps the safe-haven yen demand. On the other hand, lack of details on progress in negotiations deprives investors of enthusiasm. On the data front, Japan’s January headline CPI rose 0.2% against 0.3% in the previous month. The national CPI ex-food came in at 0.8%, in line with market consensus versus 0.7% earlier. Despite the consumer price growth accelerated, the index is still far from Bank of Japan’s 2% target, which highlights the fragility of the recovery process. Technically, the USDJPY pair struggles to get back above the 111.00 resistance. A break of which could open the way to the 200- and 100-DMAs at 111.30 and 111.50 respectively. A bullish breakthrough in the near term is possible if some obviously positive details and comments come from Washington, where the trade negotiations continue.
by HelenRush
Oil rally takes a pause Crude oil prices resumed the rally on Wednesday and extended gains to the $67,43 figure. After reaching fresh November highs, Brent has settled around the $67 level and looks directionless in the short-term charts, trading with a slight bearish bias on Thursday. The recent ascent in prices was fueled by a number of factors. Saudi Energy Minister Khalid Al-Falih said he hoped the oil market would be balanced by April and that there would be no gap in supplies amid US sanctions on Iran and Venezuela. By the way, according to reports, OPEC exports set to hit a four-year low this month, mainly due to supply cuts in Saudi Arabia, Iran and Venezuela. Meanwhile, API report showed that US stockpiles increased by a relatively modest 1.26 million barrels last week, while gasoline stockpiles declined by 1.5 million. Despite the rally has stalled for now, Brent looks set for further gains in the short term amid signs of progress towards the trade deal between the US and China. So, in the coming days, prices could well reach the next barrier at $68.
OANDA:BCOUSD
by HelenRush
Gold may extend gains Gold prices received a boost from dovish comments by Fed’s Mester that sent the dollar lower nearly across the board. Traders were at a loss as this central bank official used to be hawkish, which added to the upside pressure on the precious metal. The prices surged to fresh April highs above $1,346 on Wednesday and remain elevated despite some correction from the top of the extended bullish range. Despite some overbought conditions, the yellow metal could extend the rally in the near term on the potentially dovish FOMC meeting minutes due later today. The Federal Reserve retreated from a hawkish rhetoric last month that dominated in 2018. A likely confirmation of a more cautious and wait-and-see stance will cap the greenback further and thus could help the gold prices to at least remain in the positive territory. In the longer term, the metal will continue to assess the developments between Beijing and Washington, and fresh signs of progress may keep a lid on bulls, but the lingering doubts in making a deal soon will allow the bullion to refrain from changing the upside trajectory. In case of profit-taking, the prices will first target the $1,334 figure.
TVC:GOLD
by HelenRush
EURUSD upside bias looks vulnerable EURUSD is consolidating previous gains on Tuesday, with the pair has settled around the 1.13 psychological level. Despite some softness, the dollar is holding rather firm as traders are focused on US-China trade talks in Washington due to resume on Thursday. So, in the coming days, the greenback will likely remain rather robust, if, of course, the FOMC meeting minutes don’t disappoint by a dovish tone. Despite the upside bias, EURUSD recovery still looks rather modest and vulnerable as the economic data from the euro zone continue to fuel concerns over slowing growth, especially in Germany. The economy was flat in the fourth quarter after contraction in the previous quarter, first since 2015. Technically, the pair needs to hold above 1.13 in the near term in order to target the 1.1325 intermediate resistance on the way to 1.1340 and then 1.1360. A break below 1.13 will open the road to 1.1270 and 1.1250. Should the upside bias stall, the euro could turn lower for the day. Further dynamics will depend on the tone of the FOMC minutes.
by HelenRush
FOMC minutes in focus this week As the latest Fed meeting was accompanied by the central bank’s commitment to data dependence, flexibility and patience, the upcoming FOMC meeting minutes may have a significant impact on the markets and the dollar in particular as the monetary authorities are expected to clarify the prospects of their monetary policy. Should the regulator hint that the shift in the tone was not an abrupt turnaround from its earlier hawkish statements, and highlight that the path of future decisions will depend on the incoming data, it could be somehow positive for the greenback. It will also be interesting to see how the Federal Reserve estimates the economic risks. In this context, a mention of an imminent danger of a recession is unlikely. But a more downbeat rhetoric is possible. If the Fed says that it continues to see sustained growth as the most likely path for the economy, the buck could get a lift. Towards the end of last week, the dollar upside momentum started to abate. And there is a high probability that traders will tend to fix profit further ahead of the release due to a high uncertainty. In a wider picture, the US currency remains relatively robust against the backdrop of weak European data.
AMEX:USD
by HelenRush
Brent shows resilience Soft US retail sales data reignited concerns among investors and weakened risk appetite in the global financial markets. However, crude oil prices showed resilience and extended the rally towards fresh nearly three-month highs around the $65 psychological mark on Friday. Brent seems to have encountered a local resistance at this level as lack of news from trade negotiations and further signs of weakness in the Chinese economy cap the optimism in the market. The January inflation data has disappointed as consumer price growth has slowed to 1.7% from 1.9% in the previous month. In fact, short-term direction in the oil market hinges on the signals from Beijing. At the moment, lack of statements and comments makes investors nervous and worry about the potential escalation in the trade war. Positive news could lift Brent further but the rally is unlikely to be sustainable as some traders may opt to take profit at attractive levels. Technically, the prices need to confirm a break above the $65 figure to register another upside breakthrough. Brent will likely register a daily and weekly closing below this level.
OANDA:BCOUSD
by HelenRush
What’s driving the dollar higher? The Fed took a pause in hiking rates but the greenback rallies. After eight sessions of strength, the ascent stalled, however demand reemerged quickly and took the currency to fresh highs. So what’s behind the USD strength after all? Essentially, it’s more weakness in other currencies rather than dollar appeal. It is just ‘best of a bad bunch’ as, for example, euro suffers from increasing risks to the European economy. The reports point to a slowdown in Germany, the region’s growth engine. And the overall health of the euro area economy is worsening. A worri-some political background in Italy, France and Spain add to the gloomy sentiment in the region. Meanwhile, the threat of another US government shutdown is abating as Trump shows readiness to sign the border security deal despite he is "not happy" with the deal reached by congressional negotiators this week. The trade spat with China is also on the way to being resolved. And the US fundamentals look better than in other economies. At the same time, the greenback will hardly be able to significantly extend the current rally without a less dovish rhetoric by the Federal Reserve. As such, the upside potential from here looks limited, though the currency will likely retain its bullish tone in the short term.
AMEX:USD
by HelenRush
Gold stuck in a range Gold extends a gradual ascent on Wednesday but the dynamics still looks unsustainable. This is not surprising, considering a widespread investor optimism over trade talks in Beijing and arrangements in Congress to avoid another shutdown. The bullion stays above the $1,300 psychological support but fails to make a sustained break above $1,315. The dollar saw the biggest one-day losses in nearly two weeks yesterday, which partially supported the precious metal. Besides, the downside pressure on the bullion is limited as some investors remain cautious despite the growing optimism on US-China trade relations. The lingering concerns over the global growth that took a back seat for now, could reemerge at any moment and lift demand for safe-haven gold. This also helps the metal to stay afloat. In the short term, the prices will likely remain in a familiar range, though short-lived spikes could take place as well. The risk of losing the $1,300 handle is limited but the chance that gold will make a decisive break above $1,315 is not strong either.
TVC:GOLD
by HelenRush
RBNZ will turn more dovish The Reserve Bank of New Zealand rate decision on Wednesday will attract market attention, as NZDUSD has been trading at three-week lows marginally above the 0.67 figure. It is widely expected that the central bank will take a more dovish tone, citing risks at home and abroad. RBNZ survey for the first quarter of 2019 showed that 1-year inflation expectations declined below 2%. Last week’s labor market report was extremely bearish, with unemployment spiked sharply, rising to 4.3% against 4.1% expected. Employment rose by just 0.1% in Q4, while the labor cost index in-creased by only 0.5%, also short of expectations. Considering the slowing growth and inflation at home, as well as external risks, including US-China trade tensions and worrying signals from the global economy, the monetary authorities will likely take a more downbeat rhetoric during the first meeting in 2019 and will keep rates on hold at record low. For NZDUSD, such a scenario implies further downside pressure. However, a dovish tone won’t be a surprise for traders as it is likely prices in already. So the bearish risks for the kiwi are limited from this event. In the short term, the pair could manage to hold above the 0.67 support as dollar demand seems to be easing after a spectacular rally since early February, though downside risks persist.
by HelenRush
Dollar still has advantages over its rivals The greenback had a fruitful week, with the US currency has decently appreciated against most rivals. Safe haven demand was the key driver as investors continue to assess global growth prospects and further price in lower activity in major countries. The trade-related fears reemerged as well, which gave the additional lift to the dollar. Despite the recent Fed’s dovish shift, the monetary policy divergence is still there as other major cen-tral banks won’t proceed to policy normalization against the backdrop of dismal economic reports. Therefore, the greenback remains attractive in this context due to higher rates in the US even as the Federal Reserve decided to take a pause in its tightening cycle. Considering that the US economy feels better than others, and the rising concerns over the US-China trade relations, the dollar could remain elevated in the medium term. As for the immediate outlook, the risk for the US currency is the political landscape in Washington. Another government shutdown looks increasingly likely. The border security talks stalled on Saturday, and should the lawmakers fail to find a middle ground before a February 15 deadline, the government will shut down again.
NSE:DOLLAR
by HelenRush
Brent threatens $60 again Crude oil prices resumed the downside move after a brief pause and could threaten the psychological support of $60 should the selling pressure persist. Brent is attempting to cling to the $61 handle but considering the general risk-off tone in the global financial markets, bearish risks could overweight in the short term. Risk appetite soured as a senior US administration official said Trump and China's Xi Jinping are ‘highly unlikely’ to meet before March 1 deadline. Meanwhile, White House economic advisor Larry Kudlow said there's a "pretty sizable distance to go" before the U.S. and China reach a sweeping trade agreement. Not surprisingly, hopes of striking a trade deal before March 1 started to abate quickly, with risk aversion hit the markets across the globe, including commodities. Another source of concerns for oil traders is the slowing global growth. The European Commission cut its outlook for euro zone GDP growth yesterday. Moreover, the Commission also revised the average oil price outlook lower by 20% from estimates made in autumn. Against this backdrop, Brent may lose the $60 level for the first time this month, once the price fails to stay above $61 in the short term. On the other hand, the downside pressure should be limited due to sanctions against Venezuela and Iran. By the way, the US Special Representative for Iran Brian Hook said this week that Iran’s oil customers should not expect new U.S. waivers in May. In the medium term, this factor may support the market.
OANDA:BCOUSD
by HelenRush
Gold faces a stark choice Gold extends losses from last week’s highs and holds at fresh one-week lows registered on Thursday around $1302. As such, the precious metal has settled within striking distance from a psychologically important support at $1300. The bullion now faces a stark choice: to hold above this level or to speed up its bearish correction on a break lower. The selling pressure comes from a stronger dollar. The USD index is hovering around a two-week high today, rising nearly across the board after a deep sell-off amid Fed’s dovish shift last week. Besides, the yellow metal is pressures by lower liquidity in the markets as Chinese markets are closed for the Lunar New Year holiday this week. On the other hand, the downside momentum us capped by the lingering worries over slowing global economic growth, the risk of another US government shutdown, Brexit uncertainty and investor cautious tone ahead of another round of US-China trade talks due next week. The trade negotiations will come into market focus in the days to come, and lack of substantial progress towards a deal could sparkle risk aversion across the global markets. Such scenario will play into gold’s hands. In the short term, however, the downside risks persist. A break below $1300 could fuel a more aggressive profit taking.
TVC:GOLD
by HelenRush
Euro hinges on dollar sentiment  The common currency extends its pullback after the earlier rally above 1.15. EURUSD has been losing ground for a third day in a row. On Tuesday, the prices managed to hold above the important psychological level of 1.14 but today, the sellers pierced this handle, which points to a risk of an even deeper correction.  The euro zone reports continue to disappoint and fuel concerns over German growth. In another sign of slowing economy, German December factory orders declined by 1.6% versus +0.3% expected. Despite the volatile nature of the release, the figure adds to fears over the health of the largest euro area economy.  As such, there are no factors or drivers at the moment that could lift EUR sentiment as the fundamental picture in the region remains gloomy. Therefore, the pair’s dynamics will hinge on the general dollar behavior as well as on risk sentiment in the global financial markets.  Technically, the downside risks have increased after a break below 1.14, to January 25 low of 1.1380. On the other hand, the dollar that has already regained its post-FOMC losses, could lose the upside momentum in the short term. In this case, EURUSD may settle around the 1.14 figure which remains in traders’ focus for now.
by HelenRush