EUR/USD:DOWNTREND|FUNDAMENTALS+TECHNICAL ANALYSIS UPDATE 🔔EUR/USD remains depressed below 1.1000 on USD-strength
EUR/USD revisits 1.0970 before attempting a mild bounce.
German 10-y bund yields regain the upside and the 0.50% zone.
Germany, EMU Flash PMIs surprised to the upside in March.
Sellers remain well in control of the sentiment surrounding the single currency, motivating EUR/USD to keep the bearish bias unchanged on Thursday.
EUR/USD meets daily support near 1.0970
EUR/USD loses ground for the third session in a row on Thursday, although it managed to rebound from earlier lows in the wake of better-than-forecast preliminary results from PMIs in both Germany and the broader Euroland.
In the meantime, no news in the geopolitical front appears to keep lending support to the dollar in the very near term, which remains already underpinned by the Fed-ECB divergence in monetary policy and the US-EU economic growth prospects.
The daily pullback in spot came in contrast with the resumption of the uptrend in German 10y benchmark yields, which have retested the 0.50% zone so far on Thursday.
Data wise on the US docket, flash Manufacturing and Services PMIs are due, seconded by Initial Claims, Durable Goods Orders and speeches by FOMC’s Waller, Evans and Bostic.
What to look for around EUR
EUR/USD stays under scrutiny and keeps the downside bias well and sound below the 1.1000 yardstick. So far, pockets of strength in the single currency should appear reinforced by speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a firmer euro for the time being.
Key events in the euro area this week: Germany, EMU Flash PMIs (Thursday) – Germany IFO Business Climate (Friday).
Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the euro area. Speculation of ECB tightening/tapering later in the year. Presidential elections in France in April. Impact of the geopolitical conflict in Ukraine.
Telegramsignal
GOLD:FUNDAMENTALS+TECHNICAL ANALYSIS | LONG VIEW | 🔔Gold prices remain pressured despite recent inaction as Treasury yields renew multi-month top.
Stock futures print mild gains but USD bulls stay cautious ahead of Powell’s speech.
Ukraine-Russia crisis continues to take a toll on sentiment, Western sanctions eyed.
Gold Price Forecast: XAU/USD braces for another hit, with eyes on Powell and yields
Gold (XAU/USD) prices tread water around $1,920-25 heading into Wednesday’s European open. It should be noted that the metal dropped the most since June 2021 the previous week and stays depressed so far during the current week.
In doing so, the bright metal struggles for clear direction as the US dollar refrain from rising despite multi-month high Treasury yields. Also restricting the bullion’s immediate moves is the market’s anxiety ahead of a speech from Fed Chairman Jerome Powell and mixed concerns over the Ukraine-Russia stand-off.
The US Dollar Index (DXY) remains lackluster around 98.50 even as the US Treasury yields rally to a three-year high. The reason could be linked to the hopes that central bankers to return to normal after they’re done fighting the inflation woes. It’s worth noting that the global bond markets print the record loss if counted from 2021 top, per Bloomberg.
Other than the central bank chatters, the indecision over the Kyiv-Moscow story also limits XAU/USD moves. Recently, Ukraine’s easy stand fails to provide any positive impact as Russian ships play hardball in Mariupol. Also challenging the odds of improving are the Western sanctions. The Wall Street Journal (WSJ) signaled that the Biden administration is up for sanctioning over 300 Russian lawmakers while also showing readiness to seize Moscow’s gold with their Treasury.
Amid these plays, the US 10-year Treasury yields renew the highest levels since May 2019, around 2.41% at the latest while the 2-year counterpart prints 2.19% figure by the press time, after renewing three-year top to 2.198% before a few minutes. Also, the stock futures struggle to track Wall Street’s gains by the press time.
To gain more clarity over gold prices move, market players will keep eyes on today’s speech from Fed’s Powell as his early-week comments triggered the bond rout.
NZD/USD: FUNDAMENTALS+TECHNICAL ANALYSIS | POSSIBLE PULLBACK |NZD/USD witnessed modest pullback from the four-month high touched earlier this Wednesday.
Elevated US bond yields acted as a tailwind for the USD and prompted some intraday profit-taking.
The risk-on mood, rising commodity prices should help limit losses for the resources-linked kiwi.
The NZD/USD pair edged lower through the early European session and dropped to a fresh daily low, around mid-0.6900s in the last hour.
The pair witnessed modest retracement slide from the four-month high, around the 0.6975 region touched earlier this Wednesday and eroded a part of the previous day's strong gains. The recent runaway rally in the US Treasury bond yields acted as a tailwind for the US dollar, which, in turn, prompted trades to take some profits off their bullish positions around the NZD/USD pair.
The sell-off in the US bond market picked up pace after Fed Chair Jerome Powell suggested that the US central bank could adopt a more aggressive stance to combat inflation. Moreover, San Francisco Fed President Mary Daly noted that it was time to remove policy accommodation, while St. Louis Fed President James Bullard and Cleveland’s Loretta Mester called for faster hikes.
EUR/USD: Watch Out For Possible Bear Trap | SHORT 🔔The EUR/USD closed as a bear bar closing on its low yesterday. This set up a double top at the low of the 3-month trading range (a possible negative gap for the bears).
Bears are hopeful the double top will lead to a test of the March low or March 14 higher low.
Bulls want a bull breakout of the bear flag. Today, the bulls need to get a strong bull reversal bar to convince traders of a possible bull breakout of a bear flag.
Bulls are hopeful that the bull breakout above the March bear flag is strong enough that the bull can get a measured move up of the bear flag (purple lines on chart). That measured move up would also be a test of the February high.
The odds are still that the 3-month trading range will be a final flag that will lead to sideways to up trading and a likely test of the February high.
Bulls hope they can get a breakout similar to the 4-bar bull breakout that started in the first week of February.
Overall, the bears want a double top bear flag, and the bulls want a bull breakout of the double top bear flag. Also, it is essential to remember that even though today looks like it may reverse up, it could look much different when the bar closes. Double tops usually look like they will fail and reverse; however, in general, 40% of double tops are successful.
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GBP/USD:FUNDAMENTAL NEWS+TECHNICAL ANALYSIS | SHORT SETUP 🔔The Pound US Dollar (GBP/USD) exchange rate has wavered higher today, despite some troubling UK employment data, as risk appetite recovers.
Looking ahead, risk appetite could continue to drive GBP/USD through today’s session, while tomorrow brings the latest US retail sales data.
Pound (GBP) Exchange Rates Recover as Market Mood Improves
The Pound (GBP) initially dipped this morning as market sentiment soured and the UK’s latest jobs data caused concern among GBP investors.
The UK’s latest labour market overview from the Office for National Statistics (ONS) showed a larger-than-expected drop in the UK’s unemployment rate. The rate dropped from 4.1% to 3.9% – beating expectations of 4% – putting it back to pre-pandemic levels. However, total employment remains well below its pre-Covid peak.
In addition, wage growth fell further behind inflation as the UK’s income squeeze deepens. Real wages, which are adjusted for inflation, suffered the biggest fall in over seven years.
This worrying data weighed on Sterling, knocking it lower against the US Dollar (USD).
However, risk appetite began to improve among European investors, thereby boosting the risk-sensitive Pound. Diplomats from Russia and Ukraine will continue peace talks today, following negotiations yesterday.
Although previous discussions have ended without agreement, Ukrainian President Volodymr Zelenskiy said that yesterday’s meeting went ‘pretty good’.
Markets are therefore growing more hopeful that the war in Ukraine can be solved through diplomatic means. With the ongoing invasion posing significant risks to the UK economy, any positive news is likely to boost Sterling.
US Dollar (USD) Exchange Rates Slip amid Risk-On Trade
Meanwhile, the US Dollar is softening as the improving market mood dampens the appeal of the safe-haven currency.
In addition, a lower-than-forecast US PPI failed to provide the ‘Greenback’ with much support.
USD’s downside is limited, however, as growing Covid cases in China keep a cap on risk appetite.
In response to a recent coronavirus outbreak, China has been imposing increasingly widespread restrictions in an attempt to curb the spread of the virus.
Yesterday, China quarantined the entire province of Jilin – home to 24 million people. This is the first time China has locked down a whole province since the Hubei province, which contains Wuhan, was locked down at the beginning of the pandemic.
Markets are concerned that the restrictions could dent growth in the world’s second-largest economy while also disrupting global supply chains.
This is keeping a lid on market optimism today, thereby limiting USD’s losses.
USD/CAD:FUNDAMENTAL NEWS+TECHNICAL ANALYSIS |U MUST READ|LONG 🔔USD/CAD struggles to defend 1.2600 as Ukraine-Russia crisis favors oil buyers
USD/CAD remains pressured around two-week low after declining for the last four days.
Geopolitical tussles between Russia and Ukraine recently escalated over Mariupol.
WTI crude oil consolidates two-week losses as news from Saudi oil plants joins Ukraine-Russia headlines.
Qualitative catalysts will be the key to watch, Fed’s Powell, Biden’s NATO meet will be crucial events.
USD/CAD sellers attack 1.2600 during Monday’s Asian session, after posting the biggest weekly loss since late December 2021. In doing so, the Loonie (Canadian dollar) cheers firmer prices of Canada’s key export item, WTI crude oil, amid supply crunch fears due to the latest geopolitical tensions.
Among them, escalated geopolitical tensions in Mariupol of Ukraine and the recent attack on Saudi Arabian oil facilities by Yemeni Houthis were the major catalysts.
As per the latest headlines from Kyiv Independent, “Ukraine rejects Russia's demand to surrender Mariupol.” During the weekend, Ukrainian President Volodymyr Zelenskyy appealed to Israel for help in pushing back the Russian assault on his country, per Reuters.
It’s worth noting that the telephonic talks between US President Joe Biden and his Chinese counterpart Xi Jinping couldn’t offer any positives over the Ukraine-Russia issue. On the contrary, mentioning Taiwan raised fresh geopolitical fears.
On the other hand, Saudi oil plants were attacked by Yemen’s Houthis during the weekend. However, no major challenges to oil supplies could be known.
Elsewhere, the US Federal Reserve’s (Fed) rate-hike couldn’t help the US dollar bulls as Fed Chairman Jerome Powell tried placating reflation woes.
Amid these plays, S&P 500 Futures pause four-day uptrend and the US 10-year Treasury yields pick-up bids near 2.15% of late. Further, WTI crude oil prices rise 1.20% intraday while flashing $104.50 as a quote by the press time.
Looking forward, risk catalysts are likely to remain on the driver’s seat with Ukraine-Russia tensions likely escalating. As a result, the oil prices may witness further upside and can keep USD/CAD sellers hopeful.
USD/CAD:FUNDAMENTAL INFOs + TECHNICAL PATTERN ANALYSIS|MUST READUSD/CAD rebounds from two-week low, inches back closer to mid-1.2600s amid stronger USD
USD/CAD reversed an intraday dip to sub-1.2600 levels, or over a two-week low.
Resurgent USD demand turned out to be a key factor that extended some support.
Steady oil prices, upbeat Canadian data underpinned the loonie and capped gains.
The USD/CAD pair built on its steady intraday recovery move from over a two-week low and climbed to a fresh daily top, around the 1.2635-1.2640 region during the early North American session.
A combination of factors assisted the USD/CAD pair to attract some buying on the last day of the week and reverse the early dip to sub-1.2600 levels. A goodish pickup in demand for the US dollar acted as a tailwind for spot prices. Apart from this, an intraday pullback in crude oil prices undermined the commodity-linked loonie and provided modest lift to the major.
Investors turned caution amid the lack of progress in the Russia-Ukraine peace negotiations. In fact, Ukrainian Presidential aide Ihor Zhovkva said that talks with Russia are progressing very slowly. Russia accused Ukraine of slowing down peace talks and said that it wants to go at a faster pace, though the Ukraine delegation has not shown readiness to speed talks.
This, in turn, tempered investors' appetite for perceived riskier assets ahead of a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping. The market nervousness was evident from a softer tone around the equity markets, which drove some haven flows towards the greenback. Apart from this, the Fed's hawkish outlook further underpinned the buck.
Apart from the anti-risk flow, concerns about reduced fuel demand - amid the resurgent of COVID-19 cases in China, Europe and New Zealand - weighed on crude oil prices. That said, the intraday downtick in the black liquid remained limited. This, along with better-than-expected Canadian macro data, benefitted the domestic currency and capped the USD/CAD pair.
According to the data released by Statistics Canada, the headline Retail Sales rose at a pace of 3.2% MoM in January as against the consensus estimate for a growth of 2.4%. This comes on the back of hotter-than-expected Canadian consumer inflation figures, which should further add pressure on the Bank of Canada to accelerate rate hikes.
The fundamental backdrop warrants some caution before confirming that the USD/CAD pair has bottomed out or positioning for any meaningful appreciating move. That said, bearish traders are likely to wait for sustained break below the 200-day SMA. Some follow-through selling below the monthly low, around the 1.2585 region, will set the stage for additional losses.
GOLD:FUNDAMENTAL INFOS+TECHNICAL ANALYSIS | WE ARE LONG √Modest USD strength prompted fresh selling around gold on the last day of the week.
The Fed’s hawkish outlook was seen as a key factor that assisted the USD to gain traction.
A generally weaker risk tone extended some support to the safe-haven precious metal.
Gold witnessed some selling during the Asian session on Friday and for now, seems to have stalled its recent goodish rebound from sub-$1,900 levels, or the monthly low touched earlier this week. The downtick was sponsored by modest US dollar strength, which tends to undermine demand for the dollar-denominated commodity. The greenback lost traction after the Fed on Wednesday hiked its target fund rate by 25 bps and disappointed some investors expecting a more aggressive increase in borrowing costs. That said, the start of the policy tightening cycle, along with the Fed's hawkish outlook, helped limit deeper losses for the buck.
In fact, the so-called dot plot indicated that the Fed could raise rates at all the six remaining meetings in 2022 to combat stubbornly high inflation. Adding to this, Fed Chair Jerome Powell said that the US central bank could start shrinking its near $9 trillion balance sheet as soon as the next meeting in May. Powell further emphasised that the economy was strong enough to withstand tighter monetary policy and financial conditions. This, in turn, allowed the yield on the benchmark 10-year US government bond to hold steady near its highest point since 2019, which was seen as another factor that acted as a headwind for the non-yielding gold.
The downside, however, remains cushioned, at least for the time being, amid worries about the lack of progress in the Russia-Ukraine peace negotiations. This kept a lid on the recent optimistic move in the markets, instead triggered a fresh leg down in the equity markets and extended some support to the safe-haven XAU/USD. Hence, it will be prudent to wait for some follow-through selling before traders start positioning for the resumption of the recent sharp pullback from the $2,070 area, or the highest level since August 2020. Nevertheless, gold, for now, seems to have snapped two days of the winning streak and remains on track to record its first down week in three.
In the absence of any major market-moving economic releases, the USD price dynamics will continue to play a key role in influencing gold prices. Apart from this, traders will take cues from fresh developments surrounding the Russia-Ukraine saga. The incoming geopolitical headlines, along with a meeting between US President Joe Biden and Chinese leader Xi Jinping would drive the broader market risk sentiment. This, in turn, should provide some impetus to the precious metal and allow traders to grab some short-term opportunities on the last day of the week.
EUR/USD:FUNDAMENTAL INFOs + TECHNICAL ANALYSIS | SHORT SETUP 🔔EUR/USD wanes back under 1.1100 but still holds on to solid post-Fed policy announcement gains
EUR/USD has been waning from earlier session highs in recent trade and is now back below the 1.1100 level.
Since Wednesday’s Fed hawkish policy announcement, EUR/USD has gained about 1.0%, flummoxing some analysts.
Markets seem to currently be being driven by “hopes” for a Russo-Ukraine peace deal, meaning geopolitics remains a key theme.
EUR/USD has been waning in recent trade and recently fell back under the 1.1100 level, meaning that the pair has, for now, failed to break above its 21-Day Moving Average at 1.1108. Nonetheless, the pair is still trading with gains of about 0.6% on the day, as the dollar succumbs to broad weakness despite strong US weekly jobless claims numbers and a better-than-expected Philly Fed Manufacturing Survey released earlier in the session.
Since Wednesday’s Fed policy announcement EUR/USD has gained about 1.0%, despite the fact that the Fed signaled its intention to hike interest rates at all of its remaining rate decisions this year, which was more hawkish than market participants had been expecting. Fed Chair Jerome Powell even warned that the pace of rate increases might be accelerated if deemed necessary and that the Fed could decide to take interest rates well beyond the so-called “neutral” level (in the 2.0-2.5% area) if inflation fails to abate as expected.
Despite all this hawkishness, the buck has failed to benefit, flummoxing some analysts. Clearly, markets are more focused right now on geopolitics and the apparent hope that Russia and Ukraine might reach some sort of peace deal in the near future. Reporting on this front over the last few days has been mixed and conflicting, making it difficult to assign a probability to a peace deal being reached.
But traders have nonetheless used “hope” as an excuse to pair US dollar longs, just as they have used this as an excuse to bid up equities in recent sessions. Whether this momentum can last is the big question and markets are very much expected to remain choppy and headline-driven with a focus on geopolitical headlines in the coming weeks.
Ultimately, while a peace deal might offer EUR/USD some near-term respite, the theme of West/Russia economic decoupling is not going anywhere. A ceasefire in Ukraine doesn’t mean the massive hit to the Eurozone economy as a result of Western sanctions on Russia for its invasion will be magically and immediately negated. 1.1100 is actually a key level of support turned resistance for EUR/USD, and its failure on Thursday to hold above this level might herald some near-term profit taking that could see the pair move back towards 1.10.
EUR/USD:FUNDAMENTAL NEWS+TECHNICAL ANALYSIS | MUST READ | SHORTEUR/USD: At risk of falling to 2020 lows at 1.0635/40 despite shift in EU and ECB coordination – Westpac
European Central Bank's (ECB) hawkish taper twist suggests that it will act on a “whatever it takes” basis to contain inflation and so EUR may find sound support if the Ukraine conflict is contained. However, a spike towards 2020’s 1.0635/40 low cannot be ruled out, economists at Westpac report.
The shift in EU and ECB coordination is likely to provide EUR support
“ECB President Lagarde stated that greater ‘optionality’, or flexibility, was needed to deal with rising risks (of stagflation). This clear hawkish tilt reflects an equally dramatic, if less overt, shift in EU and Eurozone finance ministers. They are now open to coordinated regional fiscal support to support households deal with surging energy prices, accelerate energy transition, lift security spending and support regional economies. This ‘whatever it takes’ approach from EU/Eurozone if conflict is contained, may have put a floor under the vulnerable EUR.”
“Even if flash PMI and IFO data reflect the ZEW surveys, the shift in EU and ECB coordination is likely to provide EUR support.”
“EUR/USD remains vulnerable to a retest of 1.08 and a spike towards the 2020’s 1.0635/40 low cannot be ruled out, but risks appear more balanced and a close above 1.11 could establish a firmer range for EUR/USD.”
AUD/CAD: RETEST SMA AND STRONG LEVEL | PRICE FALL Hello Everyone, I hope you'll Appreciate our Price action Analysis !
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EUR/USD:DWONTREND | SHORT SETUP TRIGGER.Hello Everyone, I hope you'll Appreciate our Price action Analysis !
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EUR/USD – US Dollar Strength Remains the Prime Driver | SHORT Federal Reserve chair Jerome Powell is expected to announce the first in a series of 0.25% interest rate hikes at tomorrow’s FOMC meeting. According to market thinking, this will be the first of seven quarter-point hikes this year with four more expected in 2023. These expectations have boosted the value of the US dollar over the last few weeks and traders will be looking, and listening, to chair Powell’s post-decision statement to see if he has turned further hawkish in the face of rampant inflation. US headline inflation touched 7.9% last week, a fresh 40-year high.
EUR/USD is trying to edge higher but the move looks limited and vulnerable to another leg lower. The pair will continue to be driven by the US dollar, while the euro will remain under constant pressure as the ECB wrestles with stagnating growth and rampant inflation. A hawkish outtake from chair Powell tomorrow will test the pair’s resolve and leave 1.0900 vulnerable. Below here the recent 1.0806 print guards a cluster of prior lows on either side of 1.0770.
GBP/USD Forecast: Technicals reveal lack of recovery momentum GBP/USD has struggled to extend rebound beyond 1.3050.
Risk-averse market environment caps the pair's upside on Tuesday.
Sellers could take action in case pound drops below 1.3000.
GBP/USD has staged a rebound after having tested 1.3000 support but has struggled to preserve its bullish momentum. The pair clings to modest daily gains below 1.3050 in the early European session but the negative shift witnessed in market mood is making it difficult for the British pound to continue to gather strength against the greenback.
Late Monday, the Ukrainian presidential adviser said that they were hoping to reach a peace deal with Russia by May at the latest. Although this development revived hopes for a de-escalation of the conflict, the adviser noted early Tuesday that there would either be an agreement or Russia would "go on the offensive."
Additionally, newly imposed lockdowns in China due to the surging number of coronavirus cases revived fears over supply chain bottlenecks, further weighing on the market mood. Reflecting the risk-averse atmosphere, the UK's FTSE 100 Index is losing more than 1% on Tuesday and the S&P Futures are down 0.5%.
On the flip side, the greenback stays on the back foot amid falling US Treasury bond yields and helps GBP/USD stay afloat in positive territory.
Earlier in the day, the data from the UK showed that ILO Unemployment Rate declined to 3.9% in three months to January from 4.1% but this print failed to trigger a noticeable market reaction.
The US economic docket will feature February Producer Price Index (PPI) on Tuesday. Nevertheless, the risk perception is likely to continue to impact the pair's action in the near term.
GOLD: UPDATE | DOWNTREND | PRICE WILL FALL MORE TO 61.8% FIBOHello Everyone, I hope you'll Appreciate our Price action Analysis !
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AUD/CHF:DOUBLE TOP PATTERN | PRICE MAY FALL !Hello Everyone, I hope you'll Appreciate our Price action Analysis !
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GBP/JPY:HARMONIC TRADING | REVERSAL COMING SOON | SHORTHello Everyone, I hope you'll Appreciate our Price action Analysis !
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NZD/USD:PRICE ACTION | PRICE MAY FALL | SHORT PREDICTIONHello Everyone, I hope you'll Appreciate our Price action Analysis !
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GBP/AUD : DOWNTREND | PRICE IS SIDEWAYS AREA | FALL SETUPHello Everyone, I hope you'll Appreciate our Price action Analysis !
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EUR/USD: DOWNTREND | PRICE ACTION | SHORT SETUP 🔔Hello Everyone, I hope you'll Appreciate our Price action Analysis !
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GOLD: UPDATE FORECAST SHORT | PRICE IS FALL LIKE PREDICTED...Hello Everyone, I hope you'll Appreciate our Price action Analysis !
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GOLD: FUNDAMENTAL INFOs + TECHNICAL ANALYSIS | SHORT SETUP 🔔Gold price is deep in the red amid risk-on mood, rallying US Treasury yields.
Russia-Ukraine updates will continue to dictate risk sentiment, dollar trades.
Gold Price appears vulnerable below $1,994, focus on yields, Ukraine updates.
Gold price is facing a double whammy from an improved market mood on hopes for diplomacy on the Ukraine crisis. While the expected 25 bps Fed rate hike this week is keeping the US Treasury yields on a stronger footing, The risk-on flows seem to be weighing down the US dollar, which cushions the downside in gold price. Looking ahead, the Russia-Ukraine war-related updates and risk sentiment will lead the way, in absence of first-tier economic data. Also, the US-Sino high-level talks to discuss Ukraine will be also closely followed.