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When EUR/USD dropped 8 weeks ago on December 23 from 1.1138, the 5 year average was located at 1.1160. The initial respomse for the next 2 weeks was trade lower by 134 then 162 pips. The week of January 6 began and for the next 6 weeks, EUR/USD ranges severely compressed. EUR/USD traded its best week at 123 pips during the week of January 13. EUR/USD traded 110 pips last week and  73 for the prior week. For the past 8 weeks, EUR/USD averaged 115 pips per week and 105 pips for the last 6 weeks. DXY from the 100.00 bottom 8 weeks ago traveled higher for the next 2 weeks by 115 then 176 pips then ranges assumed severe compression.  For the past 8 weeks, DXY averaged 111 pips per week and 100 pips for the last 6 weeks. EUR/USD traded 500 pips lower and straight down while DXY progressed 500 pips higher. EUR/USD achieved its destination but at a much slower pace than normal as 100 pip weeks for EUR/USD is far outside the 150 and 200 pip norm. Posted December 21 and 24 to EUR/USD levels. 1.0590, 1.0680, 1.0828, 1.0878, , 1.1056, 1.1160, 1.1273, 1.1521. EUR/USD’ s… Read More »FX weekly — EUR/USD and 14 currency pair levels and targets

The United States Consumer Price Index rose by more than anticipated in January. The European Central Bank keeps cooling down rate cut expectations. EUR/USD keeps posting lower lows, anticipating more slides in the coming days. The EUR/USD pair is ending a second consecutive week little changed at around 1.0750, although it posted a fresh low for 2024 of 1.0694. The US Dollar soared on Tuesday as the United States (US) reported an uptick in inflation at the beginning of the year. Hot CPI reaffirms Federal Reserve’s caution The US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) increased 0.3% MoM and 3.1% YoY in January, surpassing the market expectations. Core figures came in at 0.4% and 3.9%, respectively, higher than anticipated. Market participants entered panic mode with the news, as combined with the latest solid Nonfarm Payrolls (NFP) report, inflation numbers confirmed the Federal Reserve’s (Fed) stance of maintaining interest rates at record highs for longer and taking more time to process data before loosening monetary policy by trimming interest rates. In its latest monetary policy meeting, the central bank clarified that there is no rush to cut rates. Chair Jerome Powell disregarded a March cut,… Read More »EUR/USD Weekly Forecast: Bears encouraged by price pressure heating up

Pound Sterling hit fresh weekly low on sustained US Dollar demand. GBP/USD traders look to S&P Global US and UK PMI data in the week ahead.                    Looking ahead, GBP/USD seems poised for a rebound but bearish potential remains intact. The Pound Sterling (GBP) continued to remain in the back seat against the US Dollar (USD), as GBP/USD extended its bearish momentum into the fifth week in a row. UK economic data fail to lift the Pound Sterling The price action around the GBP/USD pair was mainly driven by a host of top-tier economic data releases from the United States (US) and the United Kingdom (UK), which helped reprice the markets’ expectations of a dovish policy pivot by the US Federal Reserve (Fed) and the Bank of England (BoE). The pair traded directionless at the start of the week on Monday, as traders moved on the sidelines and refrained from placing any fresh positional bets, in anticipation of the all-important US Consumer Price Index (CPI) data due on Tuesday. The UK labor market report was also published on Tuesday, which put a fresh bid under the Pound Sterling. Data released by the… Read More »GBP/USD Weekly Forecast: Pound Sterling could stage a comeback but will it last?

Gold registered losses for the second consecutive week. The technical outlook suggests that the bearish bias remains intact. Sellers could take retain control in case $2,000 is confirmed as resistance. Gold declined for the second consecutive week, pressured by the recovering US Treasury bond yields and renewed US Dollar (USD) strength. Next week’s economic calendar will feature February PMI data and FOMC Minutes. Whether or not $2,000 holds as resistance will also be key for XAU/USD’s next directional action. Gold price turned south following hot US inflation data Gold edged lower at the beginning of the week and registered small losses on Monday. As investors refrained from taking large positions ahead of the key inflation data from the US, however, XAU/USD’s action remained limited. The US Bureau of Labor Statistics reported on Tuesday that the Consumer Price Index rose 3.1% on a yearly basis in January. This reading came in above the market expectation of 2.9%. Additionally, the Core CPI, which excludes volatile food and energy prices, increased 3.9% to match December’s print. As the CME FedWatch Tool probability of the Federal Reserve (Fed) leaving the policy rate unchanged in the next two policy meetings climbed above 60% after the… Read More »Gold Weekly Forecast: Sellers could be encouraged in case $2,000 holds as resistance

Markets on the rise as S&P 500 looks to close out sixth consecutive gain. UK retail sales helps allay fears after yesterday’s GDP drop. US PPI in view, with jump in import prices highlighting risk of a secondary inflation push. European markets are in the green once again this morning with the German DAX hitting another fresh record high in early trade. The UK remains a key focus as retail sales data provides yet another consideration for traders that continue to process yesterday’s slump into a technical recession. The release of inflation data out of the US earlier in the week provided an uphill battle for those hoping to see the S&P 500 clock in a sixth consecutive weekly gain. However, we are once again seeing investors buy the dip, with US indices looking primed for a positive end to the week. UK retail sales staged a dramatic bounceback in January, posting the largest monthly rise in trade since April 2021. Coming off the back of a concerning -3.3% December slump, this helps build a story that might justify yesterday’s -0.3% Q4 GDP reading. Instead, it seems to be a case that we are seeing a shift in UK consumption,… Read More »US PPI in view, with jump in import prices highlighting risk of a secondary inflation push

EUR/USD stabilized above 1.0750 after posting gains for two consecutive days. Strong resistance seems to have formed at 1.0800. Producer inflation and consumer sentiment data will be featured in the US economic docket. EUR/USD stays in a consolidation phase above 1.0750 on Friday after closing the previous two days in positive territory. Although the pair’s near-term technical outlook points to a buildup of bullish momentum, buyers could remain on the sidelines unless 1.0800 is flipped into support. Mixed macroeconomic data releases from the US and the positive shift seen in risk mood made it difficult for the US Dollar (USD) to hold its ground on Thursday and allowed EUR/USD to extend its recovery. Retail Sales in the US declined 0.8% on a monthly basis in January, while the weekly Initial Jobless Claims declined to 212,000 from 220,000.  Later in the day, the US Bureau of Labor Statistics will release the Producer Price Index (PPI) data for January. The PPI is forecast to rise 0.1% on a monthly basis following December’s 0.1% decline. A negative monthly PPI print could weigh on the USD with the immediate reaction. On the other hand, an unexpected increase of 0.3% or bigger could provide a… Read More »EUR/USD Forecast: Euro could face stiff resistance at 1.0800

Gold price pauses its recovery early Friday, awaits key US inflation data. US Dollar bounces with Treasury bond yields, following weak US Retail Sales data-led decline.  Gold price remains a ‘sell the bounce’ trade as the daily RSI turns south below the 50 level.   Gold price is treading water just above $2,000, consolidating its rebound from two-month lows of $1,984 set on Wednesday. The further upside in Gold price appears elusive, as the US Dollar (USD) has regained lost footing amid a modest recovery in the US Treasury bond yields and a cautiously optimistic market environment. Weak US Retail Sales data saves the day for Gold price Markets cheer Thursday’s weak US Retail Sales data for January, which brought early US Federal Reserve (Fed) rate cuts chatter back on the table, accentuating the profit-taking slide in the US Dollar, as well as, the US Treasury bond yields. The market mood remains mixed so far this Thursday’s trading, as investors assess the conflicting messages from US Federal Reserve (Fed) policymakers and its implications on the pricing of the dovish policy pivot this year. The uncertainty around the timing of Fed interest rate cuts, following strong US Nonfarm Payrolls (NFP) and… Read More »Gold Price Forecast: XAU/USD buyers await validation and US inflation data

Asian stocks are on track for their fourth consecutive weekly gain, potentially marking the longest winning streak in over a year unless they experience an unlikely decline of more than 1% on Friday. Despite recent economic setbacks, such as Japan and Britain slipping into recession at the end of last year and U.S. retail sales declining more than expected last month, the regional and global interest rate environment remains supportive for risk markets. Weaker economic indicators could pave the way for relatively looser monetary policy, providing a bullish backdrop for Asian markets, particularly from an interest rate perspective, if not an eventual economic one. Despite initial concerns at the beginning of 2024 regarding a potential equity selloff, investors have remained resilient, defying skeptics and maintaining a positive trajectory. However, market attention is now focused on the upcoming release of the Producer Price Index (PPI) in the U.S. on Friday, which could very well play a significant role in shaping market sentiment. The PPI’s implications for the Federal Reserve’s preferred inflation gauge make it a closely watched indicator. Market participants hope that the PPI data does not signal further discomfort similar to this week’s hotter Consumer Price Index (CPI) readings. Ideally,… Read More »Asia open: All eyes on PPI

US retail sales fell 0.8% in January instead of the expected 0.2% decline. Sales excluding autos fell 0.6% instead of the expected 0.2% rise. This drop took sales back to their lowest level since last July. Fuel sales last month were at their lowest level since October 2021, while building materials sales were at their lowest level since September this year. US retail sales are calculated in nominal terms (not adjusted for inflation) and are now 1.1% higher than a year ago. This is well below the 3.1% year-on-year rise in prices and could be seen as a deflation of consumer activity despite the strong labour market. Today’s industrial production figures also disappointed, with a 0.1% decline in the headline index (expected +0.2% after 0.0% in the previous two months).   The American consumer is the primary driver of the economy, and industrial production, which accounts for around 10% of GDP, is often a leading indicator of the economic cycle. Both of these critical indicators have simultaneously pointed to an alarming and sudden slowdown. This should give pause to those who assume that monetary easing is imminent but are putting a new spin on it. It may no longer be… Read More »Has the US stopped surprising markets with robust macro?

Introduction In the complex world of global finance, the relationship between the US and the EU is crucial, significantly impacting the EURUSD currency market. This article explores how economic policies, geopolitical tensions, and monetary decisions affect this key currency pair, offering insight into global market dynamics. US policies and their influence on forex markets The US economy’s surprising resilience positively impacted the US dollar’s value in the foreign exchange market. An outstanding employment report for early 2024 showed an unexpected rise in non-farm payrolls, leading to a surge in Treasury bond yields and a stronger dollar. This surge and the increase in average hourly wages indicate a solid economic base, negating expectations of an immediate rate cut.  Economic growth of 3.3% annualized in Q4 2023, along with notable growth in consumer spending and private sector wages, has boosted consumer confidence. This synergy of real wage growth and consumer sentiment points to an optimistic outlook for the dollar, indicating solid economic conditions and the potential for tighter monetary policy to manage inflation and economic development. The Federal Reserve’s policy adjustments, including raising the federal funds rate to a range of 4.5% to 4.75%, underscore efforts to stabilize inflation towards the 2%… Read More »Global echoes: US-EU lens on EUR/USD