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Following a thin economic docket last week, the final week of February will see a pick-up in data, particularly out of the US. All in all, it will be a busy week for the markets. US data in the spotlight Stateside, Tuesday’s Consumer Confidence Index (released at 3:00 pm GMT) is expected to have improved in February, swayed by easing inflation and healthy employment. Thursday’s Core Personal Consumption Expenditure (PCE) Price Index data will also be interesting (released at 1:30 pm GMT), specifically after January’s CPI and PPI beats mid-month. Expectations, according to Bloomberg’s median estimate, however, indicate a mixed bag, calling for a +0.4% increase (prior: +0.2%) between December 2023 and January (Est Range: +0.5%/+0.2%) while the year-over-year median estimate suggests core PCE inflation to ease to 2.8% from 2.9% in January (Est Range: +2.9%/+2.6%). The US ISM Manufacturing PMI should be one to watch on Friday at 3:00 pm GMT, albeit markets are not anticipating much change in the headline figure for February, expected to remain at around 49.1. Last week’s S&P Global PMI series saw manufacturing and services indexes remain in expansionary territory. The former rose to 51.5 in February, smashing estimates of 50.5 and comfortably beating… Read More »Week Ahead: What are markets watching this week?

An outstanding earnings report from the tech sector kept Euro afloat. United States’ data indicated continued growth and a still-tight labor market. EUR/USD closed the week with gains, but bulls are still doubtful. The EUR/USD pair ended its losing streak and posted modest weekly gains to settle in the 1.0830 price zone on Friday, as investors continued to drop the Greenback. On the one hand, Euro gains were modest, as local data indicated persistent economic contraction, only backed by an upbeat market mood. On the other hand, the US Dollar was hit by cooling expectations of a change in the Federal Reserve’s (Fed) wait-and-see stance. Data confirmed trouble in Europe The economic downturn in the Eurozone continued in February, according to the Hamburg Commercial Bank (HCOB) Producer Manager Indexes (PMIs). The February surveys showed a deceleration in the rate of contraction thanks to a relatively stable services sector offsetting the sharp decline in manufacturing activity. The HCOB Flash Eurozone Composite PMI rose modestly from 47.9 in January to 48.9 in February, as the manufacturing index contracted to 46.1 from the previous 46.6, while the Services PMI surged to 50 after printing at 48.4 in January. The situation seems even worse… Read More »EUR/USD Weekly Forecast: Tepid recovery does not grant an interim bottom

Pound Sterling staged a comeback on the US Dollar pullback. US economic data and Fedspeak to dominate GBP/USD price action next week. Looking ahead, GBP/USD is set to extend its upswing so long as 200-day SMA holds. The Pound Sterling (GBP) booked the first weekly gain against the US Dollar (USD), snapping a five-week bearish momentum. GBP/USD staged a comeback from weekly lows to hit a fresh three-week high just above 1.2700. Pound Sterling benefits from sustained US Dollar weakness The sentiment around the US Federal Reserve (Fed) interest rate cut expectations drove the GBP/USD price action in the holiday-shortened week. The pair maintained the previous week’s range, trading subdued on Monday, as American traders enjoyed a long weekend on account of the Presidents’ Day holiday. Thereafter, GBP/USD picked up the recovery momentum, as the US Dollar maintained a submissive tone, despite increased bets for delayed Fed rate cuts amid hawkish FOMC Minutes and commentaries from Fed officials. Further, mixed US economic data releases combined with the AI optimism-led tech boost and global stock rally kept the downbeat tone intact around the US Dollar. US S&P Global Manufacturing PMI improved to 51.5 from 50.7 in February, while S&P Global Services… Read More »GBP/USD Weekly Forecast: Pound Sterling rebounds, snapping five straight weeks of weak momentum

Gold is having a tough time gathering directional momentum. US PCE inflation data from the US next week could help XAU/USD break out of its range. Key near-term resistance for the pair seems to have formed at $2,030. Gold (XAU/USD) fluctuated in a relatively narrow channel as it failed to benefit from the broad-based selling pressure surrounding the US Dollar (USD) this week. Nevertheless, XAU/USD ended up posting small weekly gains. Inflation data from the US will be watched closely by investors, but buyers could remain hesitant to bet on a steady uptrend until the pair stabilizes above $2,030. Gold price struggles to gather bullish momentum Gold edged higher on Monday but the yellow metal’s gains were limited, with trading conditions remaining thin due to the Presidents’ Day holiday in the US. Improving risk mood on Tuesday made it difficult for the USD to find demand and XAU/USD managed to post small daily gains. The Federal Reserve (Fed) said in the minutes of the January policy meeting on Wednesday that most policymakers noted the risks associated with moving too quickly to ease the policy. Furthermore, the publication showed that officials highlighted uncertainty around how long the restrictive policy stance would… Read More »Gold Weekly Forecast: XAU/USD needs to stabilize above $2,030 to attract buyers

EUR/USD holds steady above 1.0800 following Thursday’s volatile action. Near-term technical outlook suggests that buyers remain interested. The US economic docket will not offer any high-impact data releases. EUR/USD reversed its direction after climbing toward 1.0900 on Thursday and closed the day virtually unchanged below 1.0850. The pair holds steady above 1.0800 in the European morning on Friday and the technical picture does not point to a buildup of bearish momentum. The positive shift seen in risk mood caused the US Dollar (USD) to weaken against its rivals in the first half of the day on Thursday. The data from the US, however, helped the US Treasury bond yields edge higher and supported the currency. The number of first-time applications for unemployment benefits declined to its lowest level since early January at 201,000 in the week ending February 17, down from 213,000 in the previous week. Additionally, S&P Global Composite PMI came in at 51.4 in February’s advanced estimate. Although this reading was lower than January’s 52, it showed that the private sector’s economic activity remained in the expansion territory. Later in the European session, IFO will release the findings of the German business sentiment survey. Several European Central Bank… Read More »EUR/USD Forecast: Sellers struggle to retake control

Rally from 10.3.2023 low in EURUSD is ongoing as a 5 waves impulse Elliott Wave Structure. Up from 10.3.2023 low, wave (1) ended at 1.11395 and pullback in wave (2) ended at 1.0694. Pair has turned higher in wave (3), but it needs to break above wave (1) at 1.11395 to rule out a double correction. Up from wave (2), wave (i) ended at 1.0785 and wave (ii) ended at 1.0731. Pair rallies higher in wave (iii) towards 1.0839 and pullback in wave (iv) ended at 1.0789. Final leg wave (v) ended at 1.088 which completed wave ((i)) in higher degree. EUR/USD 45 Minutes Elliott Wave chart Wave ((ii)) pullback is now in progress as a zigzag structure to correct cycle from 2.14.2024 low before pair resumes higher. Down from wave ((i)), wave (a) ended at 1.0802. Expect pair to rally in wave (b) then it should turn lower in wave (c) to finish wave ((ii)) in higher degree before pair resumes higher. As far as pivot at 1.0694 low stays intact, expect pullback to find support in 3, 7, or 11 swing for further upside. Due to the 5 swing structure from 2.14.2024, at minimum we should get another… Read More »EUR/USD five swing rally ravors more upside [Video]

Outside of the Tech ramp, local investors will take an interest in China’s housing data. Investors in Asia are entering Friday’s trading session riding the bull of optimism, buoyed by the U.S.-led surge in mega tech stocks that has fueled a global stock market boom. The remarkable ascent witnessed across global markets on Thursday, driven by Nvidia’s impressive 16.5% surge, is expected to set a positive tone for Asian markets on Friday. Investors will closely monitor market dynamics and potential profit-taking activities amidst bullish sentiment. And not to be overlooked, Chinese stocks have been on an impressive upward trajectory lately despite being far from their all-time highs. After hitting five-year lows a few weeks ago, they have rebounded soundly and are currently experiencing their longest winning streak in eons. According to the charts, If the CSI 300 index closes in positive territory on Friday, it will mark its best run in over six years. The improved sentiment towards China can be mainly attributed to the measures implemented by authorities in Beijing aimed at revitalizing economic activity and supporting markets, particularly the beleaguered housing market. Among these measures is a reduction in the benchmark 5-year lending rate, which is crucial in… Read More »Asia open: Riding the bull of optimism

Gold price makes another run toward the $2,033 barrier amid an upbeat mood on Friday. US Dollar sellers ignore positive US Treasury bond yields and hawkish Fedspeak. Gold price remains poised for a firm break above $2,033, as a falling wedge breakout remains in play. Gold price is replicating the same moves seen in Thursday’s Asian trading, as buyers attempt another run toward the key contention level of $2,033 early Friday. The US Dollar continues to display a subdued momentum, despite the hawkish Fedspeak and positive US Treasury bond yields, as Gold traders await the US Federal Reserve’s (Fed) semi-annual Monetary Policy Report (MPR) due later on Friday. Gold price eyes more Fedspeak and Fed’s Monetary Policy Report The Asian stock markets continue to cheer the overnight AI optimism wave seen on the Wall Street indices, in the wake of the encouraging earnings report from the US chipmaker Nvidia. The safe-haven US Dollar bears the brunt of the risk-on market profile, motivating Gold buyers to regain upside traction. However, the continued downfall in China’s House Price Index combined with mixed global business PMI data and hawkish Fedspeak seem to take the wind out of the ongoing risk rally. S&P Global Manufacturing… Read More »Gold Price Forecast: XAU/USD focuses on weekly close above $2,033, Fed’s Monetary Policy Report eyed

AUD/USD’s upside momentum faltered ahead of 0.6600. Extra gains appear on the cards above the 200-day SMA. Australian flash PMIs came in mixed for the month of February. The upward momentum of the Australian dollar paused as it faced selling pressure upon approaching the key 0.6600 hurdle vs. its American counterpart on Thursday. In fact, the pair reversed six consecutive sessions of gains on the back of the tepid rebound in the Greenback, which was reinvigorated once again after further signs of tightness in the US labour market, this time via firm prints from weekly Initial Jobless Claims. The day’s fluctuation in spot coincided with a lacklustre performance for the US Dollar (USD), as investors continued to evaluate the timing of potential monetary easing by the Federal Reserve (Fed). This sentiment gained traction following resilient US inflation data reported by the Consumer Price Index (CPI) and Producer Price Index (PPI) for January, as well as persistent hawkish narrative from some Fed officials. Meanwhile, on the calendar, advanced prints showed the Manufacturing PMI eased to 47.7 in February and the Services PMI improved to 52.8 in the same period. Despite the ongoing recovery of AUD/USD, investors are anticipated to monitor developments… Read More »AUD/USD Forecast: Some consolidation likely near term

Markets The S&P 500 surged to an all-time high on Thursday following Nvidia’s much stronger-than-expected quarterly results, which buoyed the broader tech sector. Nvidia’s stock soared more than 14.5% to reach an all-time high after the company reported a remarkable 265% year-over-year increase in total revenue, driven primarily by its booming artificial intelligence business. Nvidia, the world’s most important stock and, increasingly, the market’s most crucial wealth-generating company, also forecasted another substantial revenue gain for the current quarter, surpassing already high expectations for substantial growth. Other tech giants also saw gains, with Meta (formerly Facebook) and Amazon climbing more than 4% and 2.5%, respectively. Microsoft and Netflix also experienced increases of more than 1%. As one of the Mag 7 goes, the rest will assuredly follow.  Still, over the past year, the unbridled enthusiasm for artificial intelligence has been a critical driver behind Nvidia’s jaw-dropping rally and other major tech company’s performances. Nvidia’s outstanding quarterly performance will likely instill further confidence in the tech sector, benefiting the broader market sentiment. The rapid ascent overnight has also been a function of call options, some of which we alluded to in yesterday’s note, that have led to dealer short gamma positioning in certain upside strike… Read More »Big tech rises on a promising AI future