2024-02-29 13:54

US Dollar Index Price and Analysis Core PCE at 2.8% in line with market forecasts. Dollar Index finding support from the 200-day simple moving average. The US Dollar Index slipped a fraction lower earlier after US PCE data met market expectations. The Federal Reserve’s preferred measure of inflation was seen at 2.8% in January, down from 2.9% in December. On a month-on-month basis, Core PCE rose by 0.4% in January compared to a prior month’s 0.2%. Initial jobless also hit the screens at the same time with continuing jobless claims higher than the previous week and market forecasts. The US dollar slipped a fraction post-release but the move was limited and within today’s tight range. The US Dollar Index has arrested its recent slide lower and is currently being propped up by the longer-dated, 200-day simple moving average, currently at 103.75. Below here is the 50% Fibonacci retracement level of the mid-July/early-October rally at 103.41. If these levels are broken convincingly, 103.00 hooves into view. US Dollar Index Daily Chart Charts via TradingView What is your view on the US Dollar – 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-slips-after-core-pce-meets-expectations-usd-still-needs-a-driver-20240229.html

2024-02-29 12:30

Dow drifts down The index continues to edge lower, surrendering some of yesterday’s recovery from the lows. In the short-term, we may finally see a test of the still-rising 50-day simple moving average, something that has not happened since the rally began in October. Before this the price may find support at the rising trendline from mid-January. Should this see a bounce develop, then the previous highs at 39,287 come into play, and could clear the way for a test of 40,000. Dow Daily Chart Source: IG, ProRealTime - prepared by Chris Beauchamp There are three main market conditions: Trending, Ranging and Breakout. Learn how to master them all via our comprehensive guide below: Nasdaq 100 edges down to trendline support Like the Dow, the Nasdaq 100 is easing back from its recent highs, though the declines here are even more muted. Potential trendline support from early January comes into play near 17,600, while below this is the 50-day SMA and last week’s low at 17,320. Daily Nasdaq 100 Chart Source: IG, ProRealTime - prepared by Chris Beauchamp Hang Seng under pressure as rally fades Those waiting for a fresh leg lower in this index’s ongoing downtrend will have been pleased to see the sharp drop on Wednesday that culminated at a close almost at the lows and back below the 100-day SMA. Further losses below last week’s low at 16,065 would reinforce the bearish view and suggest that the downtrend is back in play, targeting the lows of January at 14,755. Bulls will want to see a close back above 16,900 to indicate that the index is continuing its counter-trend bounce. Hang Seng Daily Chart Source: IG, ProRealTime - prepared by Chris Beauchamp https://www.dailyfx.com/news/dow-and-nasdaq-100-ease-back-while-hang-seng-bounce-hits-a-wall-20240229.html

2024-02-29 10:50

EUR/USD News and Analysis German unemployment rate ticks higher EUR/USD rests upon a long-term trend filter ahead of key inflation data IG retail positioning levels out as traders appear undecided on the euro The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library German Unemployment Rate Ticks Higher The country dubbed ‘the sick man of Europe’ has noted a slow but steady rise in unemployment as the continent’s largest economy sheds more jobs. In fact, the Federal Labour Office confirmed that there are 11,000 more people looking for work which beat the estimate of 7,000. The government warned of slowing momentum in the jobs market in the first few months of 2024 and also revised its full year growth forecast from 1.3% to 0.2%. The government agency added that the “weak economic environment is dampening the overall robust labour market “ as only 706,000 job openings were registered with the office, 72,000 fewer than a year ago. At 13:00 today, inflation data for Germany is due. There is an expectation of a drop in the year on year measure but the month on month calculation is anticipated to rise from 0.2% to 0.5%. Subdued economic activity should lead to lower inflation over time but the robust labour market could mean that this may take a lot longer than originally thought. Wage data is pretty high up on the ECB’s list of concerns with its members opting to view Q1 wage data before indicating when exactly it may be appropriate to cut rates. Then later today EUR/USD is likely to see an uptick in intra-day volatility when US PCE data comes out 30 minutes after the inflation print. EUR/USD Rests Upon a Long-Term Trend Filter Ahead of Key Inflation Data The pair has recently seen upside potential capped at the blue 50-day simple moving average (SMA). EUR/USD is surrounded on both sides by moving averages, with the 200 DMA and 1.0830 propping up the pair. There is a lack of conviction around directional moves as the pair consolidates after attempting a bullish reversal. Markets expect the ECB to cut interest rates by a greater magnitude this year and that may weigh on the euro alongside the economic hardships and potential recessionary conditions potentially already under way, according to the Bundesbank. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow IG Retail Positioning Levels Out as Indecision Creeps in IG retail client sentiment offers little help now that positioning is near 50/50. Shorts and longs have converged as markets attempt to make sense of recent moves with an eye on the Fed and ECB. The well-known contrarian indicator works better in strong trending markets. EUR/USD:Retail trader data shows 48.88% of traders are net-long with the ratio of traders short to long at 1.05 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias. https://www.dailyfx.com/news/eur-usd-rests-upon-key-long-term-filter-ahead-of-key-inflation-data-20240229.html

2024-02-29 08:41

USD/JPY Analysis, Charts, and Prices Japanese Yen Prices, Charts, and Analysis Verbal central bank intervention boosts the Japanese Yen. US PCE (13:30 UK) will be the next driver of US dollar price action. Bank of Japan board member Hajime Takata said today that the central banks’ goal of 2% inflation is ‘finally in sight’, that it is ‘necessary to consider shifting gears from extremely powerful monetary easing’, and that the BoJ should ‘respond nimbly and flexibly toward an exit.’ This hawkish, verbal intervention sent the Japanese Yen higher on the session, with USD/JPY hitting a near two-week low. Market pricing now shows a 61.5% chance of a 10 basis point rate hike at the April BoJ meeting, a 72% chance of a hike at the June meeting, and a 84% chance at the July meeting. While the Japanese Yen has picked up a bid, the US dollar remains in a holding pattern ahead of today’s PCE inflation report. Core PCE y/y is seen nudging 0.1% lower to 2.8% in January, while PCE price index is seen at 2.4%compared to 2.6% in December. Core PCE is the Fed’s preferred measure of price pressures and any move higher in either of the headline figures will add weight to the Federal Reserve’s current stance of keeping rates at their current levels for longer. The US central bank has been successful this year in tempering aggressive rate cut expectations with the market now in line with the Fed’s thinking of three 25 basis point rate cuts, with the first move fully priced in at the July meeting. Today’s verbal intervention has likely capped USD/JPY at the 151 level for the immediate future. Lower USD/JPY was one of the market’s consensus trades for 2024 and while the pair have moved higher so far this year, it is looking likely that the path of least resistance is lower. Today’s PCE report may move the US dollar higher if inflationary pressures remain, but this is likely to be a short-term move, especially now that the market has re-priced US rate cuts. Below 149.00 there is a cluster of recent highs and lows and both the 50- and 200-day simple moving averages guarding the 145 level. USD/JPY Daily Price Chart Retail trader data shows 25.73% of traders are net-long with the ratio of traders short to long at 2.89 to 1.The number of traders net-long is 1.43% lower than yesterday and 2.28% lower than last week, while the number of traders net-short is 5.35% lower than yesterday and 3.41% lower than last week. What is your view on the Japanese Yen – 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/japanese-yen-grabs-a-bid-emboldened-by-bank-of-japan-talk-20240229.html

2024-02-28 23:35

Most Read: British Pound Technical Analysis & Trade Setups: GBP/USD, EUR/GBP, GBP/JPY The U.S. dollar edged higher today, but displayed measured strength amid subdued U.S. Treasury yields. A sense of caution permeated markets as traders anxiously awaited the looming release of the core PCE deflator, the Federal Reserve’s preferred inflation gauge. This economic report can greatly influence the central bank’s monetary policy outlook so it could bring volatility in the days ahead. Forecasts suggest that January's core CPI rose 0.4% m-o-m, resulting in a slight deceleration in the yearly print from 2.9% to 2.8%, a baby step in the right direction. In any case, the substantially higher-than-anticipated CPI and PPI readings for the same period underscore a key point: investors may be underestimating inflation risks, leaving them vulnerable to an upside surprise in tomorrow’s data. A hot PCE report indicating minimal progress on disinflation may prompt Wall Street to scale back bets on the number of rate cuts envisioned for 2024, while increasing the odds of the FOMC delaying its easing cycle to the second half of the year. A hawkish repricing of interest rate expectations should exert upward pressure on U.S. Treasury yields, boosting the U.S. dollar but weighing on gold prices. The following table shows FOMC meeting probabilities as of February 28. Source: CME Group You May Also Like: Euro Price Action Setups - EUR/USD, EUR/GBP and EUR/JPY Transitioning from fundamental analysis, the remainder of this article will focus on assessing the technical outlook for EUR/USD, USD/JPY, GBP/USD and gold prices. Here, we’ll scrutinize recent price behavior and dissect essential levels where historically there has been strong buying or selling pressure and which could be used for risk management when establishing positions. Want to know where the euro is headed over the coming months? Explore all the insights available in our quarterly forecast. Request your complimentary guide today! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD experienced a minor downtick on Wednesday, yet managed to find support above the 1.0835 area, where trendline support converges with the 200-day moving average. Bulls must vigorously defend this pivotal zone; any failure to do so could prompt a downward reversal towards 1.0725. If weakness persists, market attention will likely shift towards the 1.0700 handle. Conversely, if buyers regain control and drive prices higher in the upcoming sessions, resistance is anticipated near 1.0890, aligned with the 50-day simple moving average. A sustained advance beyond this threshold could strengthen upward impetus, paving the way for an ascent towards 1.0950. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Curious about what lies ahead for the Japanese yen? Find comprehensive answers in our quarterly trading forecast. Claim your free copy now! USD/JPY FORECAST - TECHNICAL ANALYSIS USD/JPY made modest gains on Wednesday, flirting with overhead resistance at 150.85. Traders should closely monitor this technical ceiling throughout the week, as a bullish breakout could ignite buying pressure and potentially lead to a retest of the 152.00 mark. On the contrary, if sellers unexpectedly seize control and drive the pair lower, support levels are identified at 149.70 and 148.90. A sustained decline below these key thresholds may trigger a retreat towards the 100-day simple moving average, situated slightly above 147.50. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView Interested in learning how retail positioning can offer clues about GBP/USD’s directional bias? Our sentiment guide contains valuable insights into market psychology as a trend indicator. Request a free copy now! GBP/USD FORECAST - TECHNICAL ANALYSIS GBP/USD suffered a setback on Wednesday, sliding below its 50-day simple moving average. If the bearish swing is sustained in the coming days, we could soon see prices heading towards the 1.2600 handle. Further losses could attract attention towards the 200-day simple moving average near 1.2570. On the flip side, if bulls mount a comeback and propel cable upwards, the 50-day SMA will be the first obstacle on the road to recovery. Above this technical ceiling, all eyes will be on trendline resistance located in the vicinity of 1.2720, followed by 1.2830. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView Wondering how retail positioning can shape gold prices in the near term? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD PRICE TECHNICAL ANALYSIS Gold rose on Wednesday but encountered resistance around the $2,035 mark, a key technical roadblock where a downtrend line converges with the 50-day simple moving average. Sellers need to firmly protect this ceiling to thwart bullish momentum; any lapse could trigger an upward surge towards $2,065. Alternatively, if sentiment shifts back in favor of sellers and XAU/USD takes a turn to the downside, the first key floor to watch emerges at $2,005, near the 100-day simple moving average. Should selling pressure continue, traders may eye $1,990, followed by $1,995 as potential support levels. GOLD PRICE (XAU/USD) TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/markets-on-edge-before-us-pce-data-outlook-gold-eur-usd-usd-jpy-gbp-usd-20240228.html

2024-02-28 15:43

Euro (EUR/USD, EUR/JPY) Analysis EUR/USD shows signs of bullish fatigue after respecting dynamic resistance Recent euro positioning accumulates on the short side but longs look unfazed EUR/JPY seeing signs of consolidation ahead of resistance but the yen remains vulnerable The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library EUR/USD Showing Signs of Bullish Fatigue EUR/USD has taken advantage of the hawkish repricing in the dollar after markets realigned their rate cut expectations with the Fed. Not too long ago, markets were pricing in six 25 basis point cuts to the Fed funds rate and now envision no more than the three the Fed originally communicated to the market at the December FOMC meeting. Last week prices attempted to trade above the blue 50-day simple moving average (SMA) but ultimately failed. Again, on Tuesday, an attempt was made to retest the dynamic level of resistance and failed, opening the door to a deeper pullback. The second estimate of US GDP for the fourth quarter was revised 0.1% lower to 3.2% which has seen the pair attempts to recover lost ground from earlier in the day. According to rates markets, the ECB will likely have to shave 100 basis points off the benchmark interest rate which would create a wider interest rate differential with the US. However, the euro has managed to arrest the decline that ensued at the end of December and remains around 1.0831. Any further declines might bring into focus the 1.0700 level but that may be difficult to come by as the ECB governing council is likely to reject any talk of imminent rate cuts. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow Euro positioning according to the CFTC’s Commitment of Traders report now sees a pick up in short positioning (blue line) but interestingly enough, longs have held relatively steady. The sharp rise in shorts suggests the euro may soon come under pressure. Euro Positioning via Commitment of Traders Report (net-long positioning subsides) Source: TradingView, prepared by Richard Snow EUR/JPY Showing Signs of Consolidation Ahead of Resistance but the Yen Remains Vulnerable The EUR/JPY uptrend remains in tact but recent price action hints at a potential slow down ahead of 164.31. The yen remains vulnerable in the absence of direct FX intervention form Japanese officials as the carry trade continues. A pullback in EUR/JPY towards the zone of support around 161.70 will be a challenge and would rely on a weaker euro across the board. Temporary consolidation appears more likely and a retest of the 164.31 level is not out of the question, particularly if Japan’s top currency official avoids deploying FX reserves to strengthen the yen. EUR/GBP Daily Chart Source: TradingView, prepared by Richard Snow Euro Data Picks up in the Coming Week EU core inflation and the March ECB meeting make up the core of incoming EU scheduled risk but there is plenty of ‘high importance’ US data to consider as well. Markets will be looking for much of the same from ISM services data which maintains a 13-month streak above the 50 mark and next Friday sees a rather late US non-farm payroll report. https://www.dailyfx.com/news/euro-outlook-signs-of-fatigue-appear-ahead-of-next-week-s-ecb-meeting-20240228.html