2024-03-07 08:54

US Dollar Analysis, Price, and Chart Fed Chair Powell remains positive but data dependent. US Dollar Index drifts lower and now looks to Friday’s NFP report for guidance. Gold posts a fresh record high. Fed Chair Jerome Powell gave the market little to work with at the first of his two semi-annual testimonies on Wednesday, bar reiterating that interest rates are likely to move lower later this year if economic data permits. Chair Powell told the House that rate cuts will "likely be appropriate" later this year… "if the economy evolves broadly as expected", and that inflation is expected to continue falling going forward. Day two of Powell’s testimony starts at 15:00 UK today and it is not expected to provide any further insights into the future path of US interest rates. A more likely driver of US dollar volatility will be Friday’s monthly US Jobs Report (NFPs) which hit the screens at 13:30 UK. A further 200k new jobs are expected to be announced, sharply lower than last month’s blockbuster 353k, while the unemployment rate is seen steady at 3.7%. The US dollar slipped lower on Chair Powell’s testimony yesterday and remains on the defensive in early European turnover. The yield on the rate-sensitive US 2-year continues to move lower after hitting a recent 4.76% peak on February 23rd and may soon test 4.50%. The 200-day simple moving is acting as resistance for now and is likely to keep yields capped. US Two-Year Treasury Yield Daily Chart The US dollar index today opened below all three simple moving averages for the first time since early January, highlighting the current weakness of the greenback. A further sell-off would eye 103.00 before the 61.8% Fibonacci retracement level at 102.49 comes into focus. The CCI indicator shows the US dollar in heavily oversold territory. US Dollar Index Daily Chart Learn how to trade gold with our free Gold Trading Guide One beneficiary of recent US dollar weakness is gold, with the precious metal posting a fresh all-time high earlier today. Gold has rallied by nearly 9% since the February 14th low and looks set to move higher in the weeks ahead although a heavily overbought CCI reading may see the precious metal consolidate recent gains before pushing further ahead. Gold Daily Price Chart All Charts via TradingView IG Retail trader data shows 43.06% of traders are net-long with the ratio of traders short to long at 1.32 to 1.The number of traders net-long is 7.09% lower than yesterday and 15.59% lower than last week, while the number of traders net-short is 2.11% higher than yesterday and 48.39% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Gold prices may continue to rise. What is your view on the US Dollar and Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-drifts-lower-gold-rally-continues-us-nfps-on-the-horizon-20240307.html

2024-03-07 01:35

Most Read: US Dollar Falls, Fed’s Resolve in Question; USD/JPY, USD/CAD Setups Before NFP The European Central Bank's Thursday meeting is likely to be a subdued affair, with markets widely expecting interest rates to remain unchanged for the fourth consecutive gathering. For this reason, investors should closely monitor President Lagarde's press conference - her statements may provide valuable insights into the monetary policy outlook. Lagarde is likely to embrace a neutral stance, refraining from sending signals that could inadvertently create unrealistic expectations in either direction. Although disappointing growth data over the past couple of months may argue for a more dovish position, policymakers may opt for caution in the face of stalled progress on disinflation. To provide some context, January’s CPI in the Eurozone topped estimates, reinforcing the argument that consumer prices are not yet on a sustained downward trend, with rapid wage growth keeping service sector inflation stickier than anticipated. Against this backdrop, the ECB will avoid any commitment to a pre-set course that could raise premature market hopes, stressing that decisions will be data-dependent. In terms of potential scenarios for the euro, any indication that the ECB's easing measures are not imminent and could be delayed to the latter half of the year could spark a hawkish repricing of interest rate expectations. This would be bullish for the common currency. Conversely, any hint of potential early rate cuts could elicit an opposite response, weighing on the euro. Want to know where the euro is headed over a longer-term horizon? Explore key insights in our quarterly forecast. Request your complimentary guide today! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD rallied on Wednesday, breaking above its 50-day simple moving average, and reclaiming the 1.0900 handle. If this bullish move is sustained in the coming days, buyers may gain confidence to launch an attack on 1.0950, with a potential focus on 1.1020 thereafter. On the flip side, if the pair loses vigor and retreats back below the 1.0900 mark, attention is likely to shift to confluence support at 1.0850. Bulls need to vigorously defend this floor; failure to do so might precipitate a pullback towards 1.0790. On further weakness, all eyes will be on 1.0725. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Eager to discover how retail positioning can influence EUR/GBP’s short-term trajectory? Our sentiment guide has valuable insights about this topic. Grab a free copy now! EUR/GBP FORECAST - TECHNICAL ANALYSIS EUR/GBP has been in a downtrend since November, but the intensity of the selloff has eased, with prices perking up and approaching resistance near 0.8575. To enhance sentiment towards the euro, bulls need to convincingly breach this barrier – achieving this could trigger a rally towards 0.8610, followed by 0.8640. Conversely, if EUR/GBP is rejected at current levels and begins to reverse, support thresholds will come into play at 0.8530 and subsequently at 0.8500. Prices are expected to stabilize around this area during a downturn before a potential reversal, but a breakdown could lead to a decline toward 0.8450. EUR/GBP PRICE ACTION CHART EUR/GBP Char Creating Using TradingView Disappointed by trading losses? Equip yourself with knowledge to improve your strategy with our "Traits of Successful Traders” guide. Unlock crucial insights to avoid common pitfalls & costly errors. EUR/JPY FORECAST – TECHNICAL ANALYSIS EUR/JPY has lost ground in recent days after failing to clear trendline resistance at 163.50 earlier in the week. If losses accelerate in the coming trading sessions, confluence support emerges around 161.50. Should this technical floor fail, the spotlight will be on the 160.40-160.00 range, followed by 159.00. Alternatively, if buyers regain control and trigger a meaningful rebound, primary resistance can be identified at 163.50, as previously noted. It's too early to determine if bulls will gather the strength to take out this barrier, but if they do, a potential move towards last year’s peak near 164.30 could be in the cards. EUR/JPY PRICE ACTION CHART EUR/JPY Chart Created Using TradingView https://www.dailyfx.com/news/euro-outlook-hinges-on-ecb-guidance-trade-setups-on-eur-usd-eur-gbp-eur-jpy-20240307.html

2024-03-06 17:45

Most Read: GBP Update - Hunt Decides on National Insurance Reduction Over Tax Cuts The U.S. dollar trended lower on Wednesday, pressured by falling U.S. Treasury rates. This occurred despite Federal Reserve Chair Jerome Powell indicating during his Semiannual monetary policy report to Congress that policymakers are in no rush to start lowering borrowing costs. In this appearance before the House Financial Services Committee, the FOMC chief reiterated that the Fed does not believe it would be appropriate to cut rates until it has gained greater confidence that inflation is moving sustainably toward 2.0%. Although Powell's remarks leaned towards the hawkish side, they were nothing new: they merely echoed the sentiment expressed in the previous central bank meeting. In this context, traders took today’s developments as “no news is good news”, giving little incentive to yields and greenback’s bulls to charge. Curious about the U.S. dollar’s near-term prospects? Explore all the insights available in our quarterly forecast. Request your complimentary guide today! With Powell's testimony in the rearview mirror, the focus now shifts to Friday's highly anticipated U.S. jobs report. Expectations suggest that U.S. employers added 200,000 workers in February, but an upside surprise should not be ruled out; after all, recent employment data have tended to beat estimates. A surprisingly strong NFP report could trigger a shift in market pricing, convincing skeptical traders that the Fed will indeed wait longer before removing policy restriction. The possibility of a delayed easing cycle could lead to an upward move in the U.S. dollar and yields, reversing today's market direction. Want to stay ahead of the yen’s next major move? Access our quarterly forecast for comprehensive insights. Request your complimentary guide now to stay informed on market trends! USD/JPY FORECAST - TECHNICAL ANALYSIS Following a short phase of sideways consolidation, USD/JPY broke down to the downside, dipping beneath support at 149.70. Should this breakdown be validated by a daily candlestick, sellers are likely to set their sights on 148.90. Further weakness could draw attention to 147.50. Conversely, should buyers stage a comeback and reclaim the 149.70 region, upward momentum could pick up traction, paving the way for an advance towards the horizontal resistance at 150.85. Although overcoming this barrier might pose a challenge for bulls, a breakout could signal a rally towards 152.00. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView USD/CAD FORECAST - TECHNICAL ANALYSIS USD/CAD suffered an important setback, plunging sharply on Wednesday and breaching a critical support zone extending from 1.3545 to 1.3535. If prices finish the week below this range, a potential move towards the 200-day SMA at 1.3475 may be in store, with a focus thereafter on the 1.3450 level. On the flip side, if prices unexpectedly reverse course and push past the 1.3535/1.3555 area, heightened buying interest may reemerge, laying the groundwork for a possible rally towards 1.3600. Further gains could bring 1.3620 into play, the 61.8% Fibonacci retracement of the November/December 2023 slump. USD/CAD PRICE ACTION CHART USD/CAD Chart Created Using TradingView https://www.dailyfx.com/news/usd-dollar-falls-fed-s-resolve-in-question-usd-jpy-usd-cad-setups-before-nfp-20240306.html

2024-03-06 14:19

UK Spring Statement and Sterling Updates Hunt confirms additional 2 percent cut to NI contributions, no tax cut UK asset reaction (GBP/USD, FTSE, GBP/JPY) GBP/USD largely dependent on Powell, US hobs data this week The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Hunt Confirms Additional 2 Percent Cut to NI Contributions, No Tax Cut There has been a large degree of political importance surrounding what is essentially a pre-election budget – with Jeremy Hunt given the near impossible task of appealing to the voter base and balancing the books at the same time. In the lead up to the UK budget announcement a tax cut was widely anticipated until Jeremy Hunt, by his own admission, highlighted that forecasts ‘have gone against us’, leaving very little headroom for the Chancellor of the Exchequer to maneuver with. Hunt announced increased duties on: vaping, air travel on non-economy class and scrapped tax breaks on holiday lets as well as abolishing multiple dwelling relief. He also reduced the higher rate of capital gains tax from 28% to 24%, extended the oil and gas windfall for another year and upped the child benefit threshold. Looking at the general election poll tracker below, it is clear to see the Tory drop off during the brief Liz Truss’ government. At the same time, support for the Labour party grew and currently the gap appears insurmountable ahead of the general election to take place later this year. Source: Financial Times UK Asset Reaction (GBP/USD, FTSE 100, GBP/JPY) UK assets were little changed throughout the duration of the speech, seeing a minor drop at the start which recovered to levels seen before the formalities got under way. The British Pound is marginally negative against the dollar, year-to-date, but has enjoyed somewhat of a lift in the lead up to the Spring Statement, mainly due to softer US data. Tuesday’s services PMI data eased a tad, building on early concerns revealed in Friday’s manufacturing data that flagged the ‘new orders’ sub-index – a forward looking indicator. The Pound Sterling is among the top performers against the dollar this year so far and that is despite being down ever so slightly (-0.2%). Source: Reuters, prepared by Richard Snow GBP/USD largely dependent on Powell, US jobs data this week GBP/USD tests the November high around 1.2736, with channel resistance at 1.2800 in sight. The Bank of England is expected to hold interest rates until August which suggests its peers (Fed and ECB) will both cut before it, providing sterling with a slight edge when considering interest rate differentials. The RSI is yet to approach overbought territory meaning if US jobs data comes in softer this week, GBP/USD could test channel resistance. On the other hand, if US jobs data beats estimates again, we could see cable pressure return, sending the pair towards channel support. Today and tomorrow also sees the Fed Chair Jerome Powell giving testimony in front of Congress with markets looking for any clues around rate cuts or general dovish sentiment from the head of the Fed. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/gbp-update-hunt-decides-on-national-insurance-reduction-over-tax-cuts-20240306.html

2024-03-06 12:30

Euro (EUR/USD) Price, Analysis, and Chart • EUR/USD looks more comfortable above 1.08 • The ECB is expected to remain ‘in no hurry’ to lower record-high borrowing costs • Fed Chair Jerome Powell is off to Congress for scheduled testimony The Euro rose against the United States Dollar yet again on Wednesday and seems set for a fourth straight session of gains as the market looks ahead to the European Central Bank’s next monetary-policy announcement which is due on Thursday. The ECB is expected to leave interest rates alone at record highs for the fourth straight meeting thanks to stubbornly high inflationary pressures in the Eurozone. This is even though some of its national economies, notably Germany, look as if they could do with a bit of stimulus. Still, core inflation remains at an annualized 3.9% and hasn’t moved for four months. This will concern the ECB, of course, and likely mean that the central bank remains in President Christine Lagarde’s recent words, ‘in no hurry’ to cut borrowing costs. Still, markets are becoming more certain that the Federal Reserve will be in a position to cut its rates by mid-year. Given that it’s perhaps unsurprising that the Euro should be seeing a bit of support. The Dollar is likely to command most of the attention on Wednesday as Fed Chair Jerome Powell will shortly begin two days of scheduled testimony before Congress. According to the Chicago Mercantile Exchange’s ‘FedWatch’ tool, the markets believe a June rate cut is pretty certain but that March and May are unlikely to see action. The extent to which Powell is thought to have confirmed this thesis will dictate short-term direction for EUR/USD. Learn how to trade FX news and events with our complimentary guide EUR/USD Technical Analysis EUR/USD Daily Chart Compiled Using TradingView The past week’s gains have seen EUR/USD nose above its 200-day moving average, a point which offers support Wednesday at 1.08244. February 14’s bounce appears to confirm the longer-term uptrend line in place from the ten-month lows of October 3, 2023, all the way down at 1.0448, however, that line has rarely faced a test since and probably shouldn’t be relied upon too heavily as meaningful support now. It now comes in at 1.07306, some way below the current market. Bulls are edging the Euro up to its current broad range top at 1.08985. That was the intraday peak of February 2, most recently, but it also capped the market on two occasions back in December.A rise to that level might bring out the sellers again, but a durable move above it would probably bring January 11’s top of 1.09989 back into focus ahead of late December’s significant peaks. To the downside lies the psychological prop of 1.08, with February 29’s intraday low of 1.07960 in easy range should that break. The Euro has effectively been in a new. shallow uptrend since February 14. That said it still doesn’t look drastically overbought according to its Relative Strength Indicator and, technically speaking, the bulls still appear to be in charge. --by David Cottle for DailyFX https://www.dailyfx.com/news/euro-gains-again-as-markets-look-to-big-ecb-powell-double-bill-20240306.html

2024-03-06 08:40

Gold (XAU/USD) Price Analysis and Chart Gold readying for another shot at the December 4th spike high. Will Chair Powell give anything away later today? Most Read: Silver Tumbles Back Into Multi-Month Support Zone Gold’s recent rally accelerated last Friday, driven higher by weak US economic data, and the rally back towards a new all-time high has continued this week with the precious metal posting a $2,141.8/oz. peak yesterday. This left gold just $3 short of printing a new ATH. The technical outlook for gold remains positive and suggests that the precious metal will continue to move higher. The drivers for the latest move higher in gold remain the same, the upcoming series of US interest rate cuts – three 25 basis point moves seen this year, starting at the June FOMC meeting – ongoing haven buying on geopolitical fears in Ukraine and the Middle East, and heavy central bank buying as bankers diversify away from the US dollar. Later today, Fed Chair Jerome Powell will testify to the House Financial Services Committee (15:00 UK). Mr. Powell is not expected to lay out any timetable for interest rate cuts just yet, although any discussions about inflation, or the US labor market, will be keenly followed. The next FOMC meeting is on March 20th and this may be a more appropriate setting for official rate cut discussions. Learn how to trade economic data and events with our complimentary guide The daily gold chart remains positive with a prior level of resistance at $2,081/oz. now turning into support. Before that, the $2,114/oz level may act as a buffer after closing there on Monday and opening there on Tuesday. The CCI indicator at the bottom of the chart does show gold to be extremely overbought although this reading is starting to move lower. There may be a short period of consolidation ahead but overall the path of least resistance for gold is higher. Gold Daily Price Chart Retail trader data show 44.00% of traders are net-long with the ratio of traders short to long at 1.27 to 1.The number of traders net-long is 3.42% higher than yesterday and 18.14% lower than last week, while the number of traders net-short is 5.01% higher than yesterday and 65.42% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Gold prices may continue to rise. See what these swings in positioning mean for the price of gold What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-price-latest-all-time-high-remains-within-touching-distance-20240306.html