EUR/USD cautious before US CPI release - SHORT IDEAAfter reaching multi-week highs near 1.0750 earlier this week, the euro currency is losing momentum and pushing the EUR/USD pair back to the 1.0680/75 area. The recent moderate recovery in the greenback is contributing to the currency pair's correction, as well as concerns about the US banking sector and speculations about the Fed's upcoming decisions on interest rates.
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GOLD prices declined slightly after reaching new high of $1,915Yesterday the gold has continued to grow over the 61.8% Fibonacci level without seeing a rebound in that area, but today the price, after reaching the 1915 area, seems ready to have a short impulse to come back inside the bearish channel .
Despite hitting a fresh monthly high around $1,915 the price of gold has slightly declined on the day, primarily due to falling US Treasury bond yields. Gold is well-known for its inverse correlation with US Treasury (UST) bond yields, but its correlation with real UST bond yields is stronger than with nominal yields.
Recently, the fallout of Silicon Valley Bank (SVB) and speculation surrounding the deteriorating US financial system have caused market participants to scale back bets on an aggressive rate-hiking path from the Federal Reserve (Fed). As a result, UST yields have been decreasing upon dwindling expectations of a 50 basis point rate hike from the Fed at the March 22 meeting.
Investors are likely to remain indecisive until the Fed provides more clarity on the spread of the contagion in the US banking sector. Many market forecasters have shifted their view on the Fed's rate-hiking plan, with no consensus view for the March FOMC meeting.
One argument in favor of the Fed's rate-hiking cycles is their urgency to "do whatever it takes" to control inflation. However, the Fed cannot continue to hike rates while underlying issues in the financial system persist.
The US economic calendar features the US Consumer Price Index (CPI) data for February, with attention focusing on the sticky service-led inflationary portion, which is the Fed's focus. If the inflation reading comes in higher than expected, the Fed will face a difficult situation as the service sector is essential to most developed economies and service-led inflation tends to be irreversible.
GBP/USD bounces off daily low post-UK jobs data - SHORTGBP/USD is drawing some dip-buying interest, but the lack of strong follow-through on the intraday uptick is notable. Despite mixed UK jobs data, the British Pound receives some support as it fails to push back against Bank of England (BoE) rate hike expectations. However, the pair faces resistance as the USD demand revives with rebounding US bond yields.
Following the release of UK monthly employment data, GBP/USD has modestly recovered from intraday losses and climbed to the upper end of its daily range during the early European session on Tuesday. Despite this, the spot prices remain below the one-month high of 1.2200 reached on Monday.
The Office for National Statistics reports that the number of people claiming unemployment-related benefits has decreased by 11.2K in February, slightly below the anticipated 12.4K. The previous month's reading has also been revised to a fall of 30.3K in the Claimant Count Change, from the originally estimated 12.9K. Additionally, the jobless rate has held steady at 3.7% during the three months to January, instead of the expected slight increase to 3.8%. These figures, to a larger extent, offset the slowdown in UK wage growth data and do not push back against the market's bets for additional rate hikes by the BoE later this month, lending some support to the British Pound.
However, the USD demand is impeding the GBP/USD pair's upside momentum as the US bond yields recover. The increase in US bond yields is a result of the US authorities' move to limit the fallout from Silicon Valley Bank's (SNB) collapse and is also attributable to some repositioning trades ahead of the US consumer inflation figures. Nevertheless, the expectation that the US central bank will slow or even halt its interest rate-hiking cycle due to the strain on the US banking system could limit any meaningful upside for the US bond yields and restrain the USD bulls from placing aggressive bets.
Traders are likely to remain cautious and await the release of the crucial US CPI report scheduled for the early North American session. This week's US economic docket also features the Producer Price Index (PPI) and monthly Retail Sales figures on Wednesday, which should influence the USD price dynamics and provide some impetus to the GBP/USD pair. However, the focus will remain on next week's key central bank event risks - the outcome of a two-day FOMC meeting on Wednesday, followed by the BoE policy decision on Thursday.
AUD/USD is sliding down from the 0.6700 level. Waiting US CPIAhead of the US CPI release, AUD/USD remains cautious with a downside bias intact. The Fed's next move for a rate hike plan is uncertain, and market forecasters are no longer expecting a significant rate hike.
During the early Asian session, AUD/USD is trading flat after reaching 0.6700 in the previous session. The US Dollar Index (DXY) is soft, and the market is anticipating the release of the US Consumer Price Index (CPI) on Tuesday.
Despite the backstop provided by the Fed and US Treasury, AUD/USD has not gained much ground. The Fed unveiled a backstop plan on Sunday to counteract any damage to the US banking system caused by Silicon Valley Bank's fallout, which resulted in a relatively mild risk-on environment during the NY session on Monday.
With the recent events, the market is proceeding with caution ahead of the US CPI data release. Key market forecasters are revising their expectations for a 50 basis points Fed rate hike on March 22.
The banking system is struggling with non-performing assets due to the pressure of higher borrowing costs, which is particularly problematic for high-leverage businesses such as tech companies. A consistently rising interest rate would exacerbate the issue.
Furthermore, elevated inflation levels are creating a double whammy for central banks, placing them in a tricky position.
The upcoming US CPI data will be interesting to watch as it adds further complexity for the Federal Reserve.
GOLD:1890 -1900 Area FIBO Area Resistance - Possible Reversal ?Over the past four days, XAU/USD has been experiencing a notable surge and is currently up by around 1%. This rise in gold price can be attributed to the decreasing US Treasury yields, which are causing the market to be on high alert for any indication of a 50 basis points rate hike during the upcoming March FOMC Meeting.
Earlier in the Asian session, XAU/USD received a boost from the weaker US Dollar following the intervention of the Federal Reserve (Fed) and the US Treasury to rescue banks such as Silicon Valley Bank (SVB) and Signature Bank. However, the recent rise in borrowing costs throughout the US is putting a strain on financial health, resulting in the market facing the fallout from the SVB incident.
Due to its inverse correlation with US Treasury yields, Gold is highly sensitive to fluctuations in the yield curve's shorter end. The significant drop in yields that occurred last Friday, after the Nonfarm Payrolls (NFP) report, has been putting substantial downward pressure on the US Dollar and global equity markets.
In the coming days, the US economic calendar will feature the release of the Consumer Price Index (CPI) data on Tuesday. However, the market is already apprehensive ahead of the event, and the Fed's blackout period, which began recently, is further adding to the market's fragile dynamics. Therefore, it is likely that such sensitivity will continue until the March 22 FOMC Meeting.
Today the GOLD is approaching the 1890.000/1900 area where the Fibonacci levels of 50% and 61.8% in confluence with the resistance area may give a turning point for the price to come back in the bearish direction. This area will be crucial to understanding if the price will continue to grow or if a reversal will happen
USD/CAD:Pullback 50% FIBO on The Support Area - LONG Setup USD/CAD experiences a pullback at the previous support level that coincides with the 50% Fibonacci retracement level, it could potentially create a bullish momentum for the USD in line with the prevailing trend. However, the currency pair may encounter resistance in its attempt to sustain its five-month high, which could lead to a further pullback.
AUD/USD: Dwindling bets for a drop to 0.6500 – UOBHold on to your seats folks! AUD/USD bulls are ecstatic as they celebrate the largest daily gains seen since early February, hovering around the 0.6665-70 hurdle during the early hours of Monday in Europe. However, the Aussie pair's latest inaction has been causing quite a stir in the market as traders scramble to understand what's happening. Could this be linked to its struggle to overcome the five-week-old descending resistance line? And what's with the broadly risk-on mood and the weakened US Dollar? So many questions, so few answers!
The resistance posed by the five-week-old descending resistance line has left traders perplexed and scrambling to make sense of the situation. Will the bullish momentum of the AUD/USD pair continue or is this just a fleeting moment of excitement? The ambiguity surrounding the situation is causing a great deal of uncertainty and unpredictability in the market.
Adding to the burstiness of the situation is the market's overall optimistic sentiment towards risk, coupled with the weakened state of the US Dollar. What could this mean for the future of the AUD/USD pair? Will it continue to experience upward momentum or will the optimism fade away, leaving traders scratching their heads once again?
In conclusion, the AUD/USD pair's recent activity has left the market in a state of perplexity and burstiness. The resistance posed by the five-week-old descending resistance line, coupled with the broadly risk-on mood and the weakened US Dollar, has traders scrambling for answers. The future of the AUD/USD pair remains uncertain, leaving traders on the edge of their seats, waiting to see what will happen next.
APPLE:FUNDAMENTAL ANALYSIS + TECHNICAL ANALYSIS. Apple is a technology company that was founded in 1976, almost half a century ago. Today, it is the world's most valuable company, with a market value of $2.43 trillion. Despite a difficult 2022, where its stock price fell 27 percent along with other tech companies, Apple's stock has grown more than 20% since the beginning of this year as tech stocks make a comeback on Wall Street. Despite this growth, Apple's price-to-earnings (P/E) ratio of 26 is fairly low compared to competitors like Amazon and Walt Disney.
If you're an investor looking to invest in Apple, it's important to consider some key aspects of the company. One of the most important factors to consider is the company's focus on developing exceptional products. By maintaining high standards and focusing on product development, Apple has been able to charge premium prices and foster consumer loyalty. In fact, as of September 2022, Apple has exceeded a 50% market share for smartphones, outpacing Alphabet's Android operating system. This is a significant accomplishment, as consumers tend to stick with their preferred operating system for extended periods. Additionally, expanding market share enables Apple to cross-promote its product line, providing users with complementary products that share a similar design language.
Apple's strong product line has propelled the company's stock up by 248% over the past five years and 911% over the past decade. Furthermore, Apple's revenue has increased by 48% to $394 billion since 2018, while operating income has surged by 68% to $119 billion.
Another important factor to consider is the company's focus on maximizing iPhone profits. The iPhone segment earned 52% of the company's total revenue last year, earning $205.4 billion and up 7% YoY. As such, Apple's smartphone business is critical to the company's success, making upcoming changes in iPhone production promising for long-term profits. For instance, Bloomberg recently reported that Apple plans to replace telecom and WiFi/Bluetooth chips from companies such as Qualcomm and Broadcom with its own versions by 2025. Additionally, the media site reported that Apple plans to stop using iPhone displays from Samsung and LG as early as 2024 and switch to its own versions. Ending costly partnerships in favor of in-house designed components will likely boost iPhone profit margins and strengthen the business by reducing Apple's reliance on outside technology companies.
Apple is also strengthening its business by expanding into other areas, such as its subscription-based services business. Apple Music, TV+, iCloud, News+, Fitness+, and Arcade are thriving offerings that have doubled revenue growth, up 14% YoY to $78.1 billion, in fiscal 2022. The segment's 71.7% profit margin confirms the profitability of the digital business, while the same figure for products was 36.3% for the year.
It is also reported that Apple is diversifying its product line by entering the augmented/virtual reality (AR/VR) market this year and launching a new headset. According to Grand View Research, the AR market will grow at a compound annual growth rate (CAGR) of 40.9% through at least 2030, while the VR market will grow by 15% in the same time frame. Thus, Apple's new headset could bring significant profits as the markets evolve.
Overall, Apple has established itself as a solid growth stock over the years, and upcoming events make it a screaming buy this month. If you're considering investing in Apple, be sure to keep these key factors in mind. By focusing on product development, maximizing iPhone profits, and expanding into other areas, Apple has positioned itself for continued success in the future.
EUR/USD:UOB Group believe that EUR may fall back below 1.0500Before the European market opens, the EUR/USD pair is maintaining its position just below 1.0600. Despite a slight rebound in the US Dollar, the pair is holding onto modest gains. However, market sentiment is turning negative in anticipation of the crucial US Nonfarm Payrolls report and a speech from ECB Chief Lagarde.
Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group believe that EUR/USD may fall back below the 1.0500 level.
Key Quotes
24-hour view: "Yesterday, we predicted that EUR/USD would trade between 1.0520 and 1.0590, but it rose to a high of 1.0590 before settling at 1.0580 (+0.34%). It may continue to rise slightly today, but it is unlikely to break through strong resistance at 1.0630 (with minor resistance at 1.0605). Support is at 1.0560, and a drop below 1.0540 would suggest that the mild upward pressure has eased."
Next 1-3 weeks: "Our update from two days ago (March 8, when the spot was at 1.0550) is still valid. As we mentioned, downward momentum has improved somewhat after Tuesday's sharp drop. Overall, as long as EUR/USD does not rise above 1.0630 (with no change in 'strong resistance' from yesterday), it is expected to move lower towards 1.0485."
GOLD: US NFP in focus - Possible New Short Setup - READ!The price of gold has dropped to its intraday low and has given up its biggest daily gain in a week due to a volatile trading session. The Bank of Japan's inaction regarding inflation concerns has failed to calm the markets, while geopolitical worries and the US dollar's recovery from its intraday low have also put pressure on XAU/USD. Key central bank announcements and the US employment data for February will be significant in providing fresh impetus for the market.
Gold price (XAU/USD) is currently experiencing downward pressure, trading near $1,828, as investors anticipate the US jobs report after a tumultuous move on the Bank of Japan's inaction on Friday. The latest weakness in the price of gold is linked to the risk-off sentiment rather than the US Treasury bond yield and the US dollar, which have both rebounded recently.
The Bank of Japan has expressed inflation concerns and is joining the New York Fed in challenging policy doves, suggesting more rate hikes and questioning economic growth, which is teasing gold sellers.
The US Dollar has remained weak due to mixed signals from the previous day's US employment data, which has supported the price of gold. Additionally, positive news from Bloomberg regarding China's consumer spending showing signs of a strong rebound, along with hopes for more stimulus from China and the US, could be beneficial for the gold price.
However, the cautious sentiment ahead of the Nonfarm Payrolls (NFP) and the latest risk-off mood, coupled with geopolitical fears, are weighing on market sentiment. Among them, US President Joe Biden's budget proposal for 2024 and the US partnership with the UK and Australia for nuclear submarines are affecting risk appetite and the XAU/USD.
The market will closely observe the US jobs report for February as traders have recently lowered their bets on a 50 bps rate hike in March.
NZD/USD:Price will continue to Drop After NFP - SHORTInvestor anxiety ahead of the release of US Nonfarm Payrolls (NFP) data has caused the NZD/USD currency pair to fall below 0.6100. The USD Index has rebounded strongly, indicating a recovery in the risk-off sentiment after correcting near 105.13. An increase in the labor cost index could confirm Federal Reserve (Fed) Chair Jerome Powell's fears of persistent inflation and signal more aggressive rate hikes in the future.
As the FX market awaits the NFP data, projections suggest that the US economy added 203K payrolls in February, while the unemployment rate is expected to remain unchanged at 3.4%. The Average Hourly Earnings data could potentially impact market sentiment. Higher wages offered by US firms due to a labor shortage are offsetting the impact of rate hikes from the Fed, and the labor cost index is expected to rise further to 4.7% from the previous release of 4.4%.
On the New Zealand front, weak Consumer Price Index (CPI) data from China indicates that the expected recovery in domestic demand has not materialized despite reopening measures. New Zealand is one of China's major trading partners, and lower demand could weaken NZ exports and affect the New Zealand Dollar.
The USD/JPY currency pair is expected to continue its upward..The USD/JPY currency pair is expected to continue its upward trend above 137.00 as the Bank of Japan maintains an ultra-loose monetary policy.
The USD/JPY currency pair is currently experiencing reduced volatility around 136.65, following a period of heightened volatility due to the Bank of Japan's (BoJ) decision to maintain an ultra-easy monetary policy. BoJ Governor Haruhiko Kuroda has implemented this policy in response to the lack of inflationary pressure caused by stagnant domestic demand and wages in the Japanese economy.
EUR/USD risks a gradual decline to 1.0485 – UOBUOB Group's Economist Lee Sue Ann and Markets Strategist Quek Ser Leang believe that EUR/USD may decline further in the coming weeks and could reach the 1.0485 level.
Key Quotes:
In the 24-hour view, the EUR was expected to weaken further, but the major support level at 1.0485 was unlikely to be broken. Another support level at 1.0530 was identified, and the EUR dipped to 1.0523 before trading sideways for the rest of the sessions. The EUR is now in a consolidation phase and is likely to trade within a range of 1.0520 to 1.0575 today.
In the next 1-3 weeks, there is not much to add to yesterday's update, as downward momentum has improved since Tuesday's sharp drop. However, as long as the EUR does not move above 1.0630, it is likely to trend lower towards 1.0485, with strong resistance at 1.0650.
GOLD: Waiting for The Non-Farm Payrolls - SHORTThe XAU/USD remains in a defensive position above the $1,800 mark ahead of the release of the United States Nonfarm Payrolls report. The Gold price forecast suggests that market players are cautious and waiting for more clues before taking any significant action. The hawkish bias of the Federal Reserve, as well as the recent inversion of the US Treasury bond yield curve, are keeping the XAU/USD bears hopeful. However, the absence of any major surprises and the cautious market sentiment could limit any significant moves in the gold market for now. All eyes are now on the Nonfarm Payrolls report, which is expected to have a significant impact on the gold price in the short term.
NZD/USD:Declines towards 0.61 as US Biden wants tax riches More!The NZD/USD pair is facing downward pressure and is currently approaching the round-level support of 0.6100. This is due to US President Joe Biden's recent proposal to increase corporation tax from 21% to 28%, as well as implementing a 25% billionaire tax and levies on rich investors. These measures are expected to contract fiscal policy and restrict the Consumer Price Index (CPI) from further increasing. The proposal has also put pressure on the S&P500 futures, which are currently showing losses in the Asian session.
The USD Index is expected to resume its upside journey, hovering above 105.20 due to the higher taxes proposal. This week, the US Nonfarm Payrolls (NFP) data will be in the spotlight, with a consensus of fresh 203K payrolls added in February. Investors will also be paying attention to the Average Hourly Earnings data, which is expected to increase to 4.8% on an annual basis.
China's Consumer Price Index (CPI) data is also on investors' radar, with a forecasted decline to 1.9% from the prior release of 2.1% on an annual basis. The monthly CPI is likely to trim to 0.2% from the former release of 0.8%. If inflation continues to decrease, it might force China's administration and the people's Bank of China (PBoC) to infuse more liquidity into the economy. This could benefit New Zealand, one of China's leading trading partners, and bring more business for the New Zealand Dollar.
In the Asian session, the NZD/USD pair failed to recapture the critical resistance of 0.6120. This could be due to the proposal of higher taxes from US Biden, as well as rising interest rates by the Federal Reserve (Fed). The Fed's actions, combined with the fiscal policy measures, might have a synergic impact on US inflation, leading to a decrease in consumer spending.
AUD/USD:Bears eye 0.6540 support on downbeat China inflation....The AUD/USD bears are setting their sights on the support level of 0.6540 as a result of the recent downbeat inflation numbers from China and the tax proposal put forth by US President Biden. These factors have contributed to the bearish sentiment surrounding the currency pair, with investors closely monitoring any further developments that may impact its trajectory.
The pair is seeing a downtrend, hitting intraday lows due to weaker inflation numbers from China, which is a significant trade partner for Australia. Additionally, hawkish bets on the Federal Reserve and President Biden's budget proposal are contributing to the downside pressure on the pair, which is considered a risk-barometer. The latest Chinese Consumer Price Index and Producer Price Index came in below market expectations, with the former dropping to 1.0% YoY and the latter declining to -1.4% YoY in February. The risk-off mood in the market and the divergence between the Federal Reserve and the Reserve Bank of Australia's latest policy biases are also contributing to the bearish sentiment. The market's outlook remains uncertain as US data and other risk catalysts can offer immediate directions ahead of the all-important NFP. Investors are waiting for more details to predict Friday's top-tier employment data, which could influence the AUD/USD pair's movement.
EUR/USD: Price May Continue To Fall Down—Short ContinuationAs described yesterday, EUR/USD is dropped inside the bearish channel after the breakout of the bearish flag and retests the 50% FIBO Area following the main trend. The ISOFOREX Indicator continues to be in a downtrend, and we are looking for a bearish continuation. Follows some fundamental news in accord with our forecast.
The Powell-led EUR/USD drop yesterday means that the next key support for the pair is now 1.0500. This level could be broken in the next two days, economists at ING report.
Euro has not got many weapons to fight the Dollar strengthening at the moment
“The Euro hasn’t got many weapons to fight the Dollar strengthening at the moment. The Eurozone’s data calendar lacks market-moving releases and a speech by Lagarde today does not seem to have much to do with monetary policy. Two of the most dovish ECB members – Ignazio Visco and Fabio Panetta – are the other scheduled speakers today, so expect little support to the Euro on that front.”
“Today and tomorrow will offer the best opportunity – in our view – to press below 1.0500, while we favour a EUR/USD rebound on a softer US jobs report on Friday.”
GOLD:bears seem to gather strength for the next push lower SHORTAs described yesterday, the price inside isA bearish channel and pullback on the 61.8% Fibo Area made a new push down in the direction of the main trend. Today the price may continue to drop in accordance with our indicator, ISOFOREX. So, the gold price is looking to extend the downtrend for the third straight day this Wednesday to the next support zone.
AUD/USD:Price May Continue to Drop More After First Take ProfitsUOB Group's Economist Lee Sue Ann and Markets Strategist Quek Ser Leang believe that the AUD/USD may experience further declines in the coming weeks.
In the short term, they expected the AUD to weaken but were surprised when it dropped significantly lower than anticipated. They predict that the AUD may drop to 0.6550 before stabilizing, and any rebound is likely to stay below 0.6665.
Looking ahead, they had previously expected the AUD to trade within a range of 0.6695 and 0.6820. However, if the AUD were to break and stay below 0.6695, it would indicate weakness in the currency. Unfortunately, the AUD has already dropped below several strong support levels and hit a low of 0.6580.
Although they expect the AUD to weaken further, they believe that the decline will be slower and major support at 0.6500 may not be reached anytime soon. The downside risk remains as long as the AUD remains below the "strong resistance" level of 0.6700 over the next few days.
GBP/USD: Price Fall After Breakout Neckline Double TOP - SHORTHey there! So, let me break down what's been happening with the GBP/USD pair in a more friendly way. Basically, the exchange rate had a big drop and hit a low point near 1.1825, which was pretty scary for investors. This was partly because the head of the Federal Reserve, Mr. Powell, made some comments about interest rates that worried people.
Since then, things have been a bit up and down. The GBP/USD pair has been trading around 1.1825 in Asia, but there's still a risk that it could go down more. This is partly because there's some important information coming out about how many people in the US are employed, and that could make the currency markets more volatile.
Investors have also been selling their shares in the S&P500, which is a big index that tracks the US stock market. This is partly because people are worried that the Federal Reserve might raise interest rates too much, which could hurt the economy. As a result, the US Dollar has been getting stronger compared to other currencies.
Overall, it's been a bit of a tough time for investors in the currency markets. Mr. Powell's comments made people feel more cautious, and the GBP/USD pair has been going down since then. But, we'll have to wait and see what happens with the employment data and other economic indicators before we can say for sure where things are headed.
EUR/USD: Price Continue To falling as Predicted Yesterday. SHORTAs we described yesterday, the price had a pullback on the 50% Fibonacci area in confluence with the resistance zones inside a bearish flag and bearish channel. Our previous signal from Isoforex about a new British trend seems to work as a manual, and our idea is about a short continuation. Follows some fundamental news.
EUR/USD climbed to its highest level in nearly two weeks at 1.0700 on Monday. But the pair could edge lower toward 1.06 today, in the view of economists at ING.
European hawks in focus
“Helping EUR/USD yesterday were comments from ECB ultra hawk, Robert Holzmann, that the ECB should deliver four more 50 bps rate hikes. ECB Chief Economist Philip Lane tried to calm things down by suggesting the ECB should not go onto autopilot after what should be a 50 bps hike this month. But the market is more sensitive to the hawks given the sticky inflation data.”
“We do not see any ECB speakers scheduled today. Powell's testimony should dominate today and might nudge EUR/USD back to the lower end of the 1.0600-1.0700 range.”