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수요일, 2월 24, 2021

The Reserve Bank of New Zealand's governor, Adrian Orr comments are crossing the wires following yesterday's interest rate decision as he speaks to a

The Reserve Bank of New Zealand's governor, Adrian Orr comments are crossing the wires following yesterday's interest rate decision as he speaks to a parliamentary committee: Key comments Uncertainty will constrain investment. Prepared to provide additional stimulus if necessary. The outlook remains uncertain. Uncertainty will constrain investment. Prepared to provide additional stimulus if needed. Need to make sure inflation is sustainable the mind point before moving to tighten conditions.  Need to be patient to get inflation at 2% before considering tightening conditions.  Market reaction Meanwhile, NZD/USD has printed a higher high on Wednesday in the New York session, breaking 0.7400 to 0.7410, but is steady on the comments, so far. 

EUR/JPY was one of the watchlists picks for the week in a technical analysis and price projection illustrated in the following article: The Watch List

EUR/JPY bulls rally to projected highs and forms a daily bearish W-formation. The price has since moved back to test a 38.2% Fibonacci retracement at prior resistance.EUR/JPY was one of the watchlists picks for the week in a technical analysis and price projection illustrated in the following article:The Watch List: Gold, USD/JPY, AUD/USD, EUR crosses and many moreSubsequent to the original analysis, the test of the 128 figure and projected price action to the target was documented as follows:EUR/JPY Price Analysis: Bulls step-up to the plate, breaking the 128 hurdlePrior analysis4-hour chartThe above chart illustrates attempt 1 (1R loss) and attempts 2, which has now moved above the prior closing highs for a breakeven worst-case scenario by moving the stop loss to the entry point.At this juncture, the upside is limited to the target and the downside is limited to 1R loss on a compounded position.  One would caution about moving the stop loss any higher considering that the W-formation is a bearish chart pattern and a correction to at least the neckline to test old resistance would now be expected. Live market, 4-hour chart As seen, the price extended to the target and now consolidates. However, it has since moved back to test a 38.2% Fibonacci retracement at prior resistance and remains in a bullish environment which gives rise to the prospects of an upside continuation: However, the daily chart's bearish M-formation is problematic and hamstrings the prospects of an immediate continuation.  Daily W-formation While a continuation is without a doubt possible, a downside correction from a daily perspective is more convincing at this juncture in order to fully test the daily resistance between a 50% mean reversion and the 38.2% Fibo.

The NZD/USD pair started the day on a firm footing and posted strong gains during the Asian trading hours. After going into a consolidation phase duri

NZD/USD is posting impressive gains on Wednesday, trades above 0.7400.NZD capitalizes on risk flows and RBNZ's upbeat outlook.US Dollar Index looks to close the day little changed.The NZD/USD pair started the day on a firm footing and posted strong gains during the Asian trading hours. After going into a consolidation phase during the European session, the pair regained its traction and touched its highest level in three years at 0.7411. As of writing, the pair was up 0.9% at 0.7405. Following its February policy meeting, the Reserve Bank of New Zealand (RBNZ) left its policy rate unchanged at 0.25% as expected and kept large scale asset purchases steady at NZD100 billion. Although the bank reaffirmed its commitment to take policy action if needed, it revised the GDP growth forecast for 20212 to 4% from 3.6%. The RBNZ's upbeat outlook provided a boost to the kiwi but the renewed USD strength in the second half of the day limited NZD/USD's upside.  DXY remains on track to close flat Supported by a sharp upsurge witnessed in the US Treasury bond yields, the US Dollar Index climbed to a daily high of 90.43. However, the positive shift in market sentiment, as reflected by a decisive rebound in Wall Street's main indexes, made it difficult for the USD to preserve its strength and allowed risk-sensitive NZD to extend its rally. At the moment, the DXY is virtually unchanged on the day at 90.20 and the S&P 500 Index is up 1.15%. On Thursday, the ANZ Business Confidence and Activity Outlook data from New Zealand will be watched closely by market participants. Technical levels to watch for  

Further to the prior analysis, Gold Price Analysis: Bears engaging below firm resistance, targetting $1,750, gold has indeed broken below 1800 and rea

Gold is ripening for a sort side trade setup given the recent price action. Bears can target a measured target of $1,745.80 once 4-hour conditions confirm the bearish bias. Further to the prior analysis, Gold Price Analysis: Bears engaging below firm resistance, targetting $1,750, gold has indeed broken below 1800 and reached the $1,790 target, in fact printing a low beyond there at $1,782.50. Prior analysis, daily chartThe market at this juncture would now be expected to move deeper into test $1,790. In doing so, the focus will be on a downside extension towards $1,750 in a continuation of the daily downtrend and bearish late summer 2020 cycle:Live market The daily chart shows that the price has started to carve out the road to the downside. At this juncture, bears can start to monitor for bearish structure from the 4-hour chart and engage at an optimal entry point once higher probability conditions have been met: 4-hour price action  The price structure is still too neutral until the resistance at the bullish M-formation's neckline proves resilient because. On the next test, the price can easily move higher.  However, on repeated failures at the resistance, MACD will turn negative confirming the bullish bias and technical environment. Bears will then have the additional conviction needed to engage with the downtrend and target a measured -272% Fibonacci retracement of te daily correction and target of $1,745.80.

OPEC+ oil producers will discuss a 500,000 barrels per day (bpd) increase in the oil output from April, Reuters reported on Wednesday, citing OPEC+ so

OPEC+ oil producers will discuss a 500,000 barrels per day (bpd) increase in the oil output from April, Reuters reported on Wednesday, citing OPEC+ sources familiar with the matter. Sources further noted that they expect Saudi Arabia to end the voluntary cut of 1 million bpd from April. "Some in OPEC+ urge group to hold output steady if the entire Saudi cut is returned to market from April," they added. Market reaction Crude oil prices showed no immediate reaction to this headline. As of writing, the barrel of West Texas Intermediate (WTI) was up 3.2% on the day at $63.15.

US equity markets have picked up where they left off in the second half of Tuesday’s session and continue to grind higher, with the S&P 500 up about 0

The S&P 500 is grinding higher and now back above the 3900 mark.Positive vaccine news and dovish Fed speak is supporting equity markets.Value continues to outperform growth amid ongoing concern about rising long-term bond yields.US equity markets have picked up where they left off in the second half of Tuesday’s session and continue to grind higher, with the S&P 500 up about 0.8% on the day and has now reclaimed the 3900 level, marking a now more than 100-point turnaround from Tuesday’s low. Having recovered more than 3% from Tuesday’s lows, a further 0.8% rally required to get back to all-time highs at 3950 does not seem too far-fetched a goal for the end of the week. The Dow is seeing an even stronger performance, up 1.0%, while big tech continues to struggle amid rising yields, meaning the Nasdaq 100 is up just 0.15%.   Positives news helps power recovery back to all-time high levels Positives news on vaccines, falling Covid-19 infection rates, strong housing data and more dovish Fed speak are giving equity market investors plenty of reasons to buy on Wednesday. Starting with positive vaccine news; the FDA published a positive document on the Johnson & Johnson vaccine, teeing it up for EUA. The White House says it is ready to rollout the vaccine immediately once FDA approval has been granted. This comes on the back of news that the White House had managed to secure 100s of millions of additional vaccine doses for delivery in the coming weeks from AstraZeneca and Pfizer/BioNTech. Subsequently, the White House Covid-19 vaccine coordinator said that the vaccination rate is likely to accelerate markedly in the coming weeks. Turning to falling infection rates; the US Centre for Disease Control said that the average daily death toll due to Covid-19 had declined 35% WoW, while cases had dropped around 5% WoW to around 64K per day in its latest update on the state of the outbreak. An accelerating vaccination drive combined with falling infection rates continues to be a bullish combination for stock markets. Meanwhile, Fed Chair Jerome Powell has finished the second and final day of his semi-annual testimony before Congress. As expected, his message on Wednesday was much the same as that on Tuesday and was resolutely dovish; though the outlook for the US economy might have improved markedly in recent weeks, the Fed is still a long way from its goals, Powell was eager to impress. Seemingly keen to hammer home the message that the Fed will be on hold for a very long time, Powell dovishly noted that it may take more than three years to attain its inflation goal. Meanwhile, he reiterated that bond-buying will continue at the current pace until actual data shows that the economy is moving closer to the Fed dual inflation/employment mandate goals. Fed Vice Chair Richard Clarida, also speaking on Wednesday, delivered a very similar message and, following in Powell’s footsteps on Tuesday, implied that he is not worried about the recent rise in US borrowing costs; he said he sees asset market pricing as consistent with expectations for robust growth. Elsewhere, another influential FOMC member Lael Brainard was on the wires; she was also dovish, saying that monetary policy will continue to provide support by keeping borrowing costs low. Looking ahead, stock markets look set to remain underpinned by positive vaccine news and assurances of continued central bank support. Focus is likely to turn back towards the theme of US fiscal stimulus in the coming days/weeks, with the House set to vote in favour of US President Joe Biden’s $1.9T fiscal stimulus package and chatter already starting regarding Biden’s follow up “recovery” package, which could potentially invest up to $3T in US infrastructure. This is likely to be an equity market positive. Value continues to outperform growth The “post-Covid-19 reopening” trade remains evident in US equity markets, as the S&P 500 value index (up more than 1.5%) outperforms the S&P 500 growth index (up around 0.5%). The growth to value ratio, which peaked at 2.172 in September 2020, has now slipped back to 1.928 and has taken a beating in recent weeks; over the same period of time, the yield on the US 10-year bond has risen from about 0.7% to near 1.4% and the yield on the 30-year bond has rallied from around 1.4% to close above 2.2%. High price to earnings (P/E) ratio stocks have suffered from a disproportionately larger multiple contraction amid rising long-term interest rates compared to low (P/E) ratio stocks. Since September, the S&P 500 tech index (which disproportionately contains stocks with high P/E ratios) is up just 5%, versus the S&P 500 energy and financials indices (both containing predominantly low P/E ratio stocks), which are up 33% and 42% respectively. Whilst rising rates is one factor, stock market investors are also anticipating a shift in consumer spending patterns towards socialising and out-of-home experiences (which is set to benefit tourism, hospitality and leisure sector company earnings), as they spend less time at home once the pandemic subsides (hurting stay-at-home stocks such as Big Tech and home-delivery stocks). This is another headwind for S&P 500 growth stocks, which primarily fall into the latter category.

Federal Reserve's Vice Chairman Richard Clarida said on Wednesday that he sees the asset market pricing as consistent with expectations for robust eco

Federal Reserve's Vice Chairman Richard Clarida said on Wednesday that he sees the asset market pricing as consistent with expectations for robust economic growth, as reported by Reuters. Additional takeaways "Not expecting sustained upward inflation pressures." "The Fed has tools to achieve, keep inflation consistent with the price stability mandate." "Inflation, employment are well below the Fed's goals." "Monetary policy can't eliminate variation in inflation but can keep expectations anchored." "Support from fiscal policy should accelerate the pace of progress toward the Fed's goals." Market reaction The market mood remains upbeat following these remarks and the S&P 500 Index was last seen gaining 0.91% on a daily basis at 3,916.

As per the prior analysis, GBP/USD Price Analysis: Bulls coming up for their last breath?, cable rallied in a fresh daily impulse from the support str

Cable has rallied over 4% in 2020 due to a combination of USD weakness, BoE dialling back on rates and the vaccine roll-out. GBP/USD bears target the 50% mean reversion mark at 1.4036 ahead of the 1.3980s.As per the prior analysis, GBP/USD Price Analysis: Bulls coming up for their last breath?, cable rallied in a fresh daily impulse from the support structure. However, the price extended in five consecutive days of higher highs and lows, coming within touching distance of 1.43 today and sailed through anticipated resistance in the psychological 1.40/41 areas.  The pound has been the best-performing G10 currency this year. Cable was up some 4% for the year so far while the pound was 3.2% higher vs the euro. A combination of the Bank of England pushing back on the need for negative rates, USD weakness and a faster and more effective COVID-19 vaccine rollout has spurred on investment back into sterling.   Equally, the relief of avoiding a no-deal Brexit and fewer immediate complications at the start of the year pertaining to the new regulations has been positive for the British currency.  ''There is speculation in the market that some of the interest in the pound this year has been drawn from pent-up demand,'' analysts at Rabobank explained.  ''There is evidence that investment levels in the UK were lower than they would have been otherwise in recent years due to political uncertainty related to Brexit.'' Moreover, the analysts remind that ''any relief on the Brexit trade agreement announcement should be tempered by the fact that the deal agreed was not comprehensive or an improvement on market expectations.'' Overall, the analysts forewarn that there could still be stumbling blocks on the road ahead related to Uk politics and Brexit, concerning, In particular, the Northern Ireland issue as well as the Scottish elections in May. Additionally, considering the PM's Boris Johnson's cautious relaxation of the lockdown, some restrictions may remain in place into the summer months and given how fluid the crisis is, covid could still give the UK bulls the run-around. All things weighed, the UK economy was one of the worst affected by the virus, and while that leaves plenty of room for an economic bounce back, under the bonnet of any economic growth is a very damaged engine.  Therefore, in the absence of any new economic data that would prove otherwise, following such longevity in the recent rally, the focus, if only technically, should be on the downside.  GBP/USD technical analysis The path of least resistance, having cleared whatever liquidity had accumulated around the 1.40/41 area, opens the way to a 61.1% Fibonacci retracement, 1.3987, of the length of the latest daily bullish impulse.  Daily chart The first hurdle, however, is the 50% mean reversion mark at 1.4036, which has a confluence with the 19th Feb highs.

"Prospects for the economy in 2021 and beyond have brightened and the downside risk to the outlook has diminished," Federal Reserve's Vice Chairman Ri

"Prospects for the economy in 2021 and beyond have brightened and the downside risk to the outlook has diminished," Federal Reserve's Vice Chairman Richard Clarida said in remarks prepared for delivery to the US Chamber of Commerce on Wednesday. Key takeaways as summarized by Reuters "COVID-19 infections in the United States, the spread of the coronavirus variants pose a downside risk to the very near-term outlook." "It will take some time for the US economic activity, employment to return to pre-pandemic peaks." "The Fed is committed to using full range of tools to support economy, make recovery robust and rapid." Market reaction The US Dollar Index showed no immediate reaction to these comments and was last seen posting small daily gains at 90.21.

United States 5-Year Note Auction rose from previous 0.424% to 0.621%

AUD/USD has remained well support above the 0.7900 level on Wednesday and is now recovering back towards Asia Pacific session highs in the 0.7940s as

AUD/USD has remained well supported above the 0.7900 level on Tuesday.Strong data, buoyant risk appetite, higher Australian bond yields and continued commodity outperformance are all helping the Aussie.AUD/USD has remained well support above the 0.7900 level on Wednesday and is now recovering back towards Asia Pacific session highs in the 0.7940s as risk appetite takes a turn for the better (stocks and crude oil are moving higher while bond yields and the US dollar pull back from earlier highs). Markets have been focused on positive vaccine news (the US FDA moving closer to giving EUA to J&J’s one-shot vaccine), continued dovish Fed speak and US fiscal stimulus optimism, which is underpinning risk assets. But a hefty $1.2B option expiry to Wednesday’s NY Cut at 0.7910 also likely helped AUD/USD bounce from this area. Elsewhere, commodities (apart from gold) are having a good day as the reflation trade continues; Australian Iron Ore prices rose during the Asia Pacific session, copper is on the front foot again following Tuesday’s pullback and crude oil markets are trading with on the day gains of the north of 2.0%. All remain at or close to multi-year highs, offering ongoing support to the commodity export-dependent Aussie. Speaking of reflation, Australian bond yields continue their staggering march to the upside; 10-year yields are up more than 8bps on the day to 1.682%. That means they have rallied more than 40 bps in the last two weeks. That compares to a comparatively tame rally in the US 10-year government bond yield of about 20bps over the same time period to close to 1.40%. A widening Australian rate advantage over the likes of the US and other major developed countries (like the UK and EU) is also helping the Aussie thrive. Australia Q4 Wage Price Index Q4 2020 Wage Price Index data was strong and supported AUD during the Asia Pacific session. Wages rose at a faster than expected pace in Q4 2020 (up 0.6% QoQ and 1.4% YoY), a jump that was partly due to an unwinding of temporary wage cuts implemented during the pandemic. Financial markets are already pricing in a rate hike by the Reserve Bank of Australia as soon as early-2023, notes Capital Economics, who add that “today’s figures may add to the exuberance”. However, the economic consultancy cautions, “wage growth of 0.4% (only) translates into annual wage growth of just over 1.5%... (and) the RBA has made it clear that it wants to see annual wage growth of 3 point something”. “With the share of firms reporting wage freezes rising to a record high of over 60% in Q4, that point is a long way off” they continue, before concluding that they “only expect the RBA to hike rates in 2024”.  

New Home Sales in the US rose above expectations during January. Analysts at Wells Fargo point out sales were also revised higher for the past three m

New Home Sales in the US rose above expectations during January. Analysts at Wells Fargo point out sales were also revised higher for the past three months. They point out new home sales easily beat consensus estimates and January's overshoot is not all that surprising as sales are extremely volatile on a monthly basis and seasonal factors often play an outsized role during the winter months.  Key Quotes:  “New home sales rose 4.3% to a 923,000-unit pace in January, coming in well-above market expectations. Not only did new home sales rise more than expected, but revisions to the prior three months data significantly raised the base that sales increased from. The data now show a 5.5% increase to an 885,000-unit pace in December. For all of 2020, new home sales rose 19.3% to an 815,000 units. New home sales averaged 882,333 units over the past three months, which is 8.3% above the 2020 total.” “Even though the seasonal adjustment process appears to have exaggerated the extent of January's rise in new home sales, there is little doubt that new home sales remain quite strong. The strength in sales closely aligns with the recent NAHB/Wells Fargo Home Builders' survey, which reported strong sales over the past few months.” “New home sales have benefited from the accelerated migration away from large, expensive urban areas to lower cost suburbs and secondary metro areas.” “We expect new home sales to moderate in February and March. While home builder confidence remains strong, February brought a return of winter weather to much of the country and unusually harsh conditions to Texas, which is the nation's largest new home market.”

US dollar trims gains versus G10 currencies as the decline in Treasuries moderates. The USD/JPY is having the best day in a week amid rising US yields

USD/JPY retreats modestly after reaching a one-week high at 106.10Japanese yen among worst performer on US yields and risk appetite.US dollar trims gains versus G10 currencies as the decline in Treasuries moderates. The USD/JPY is having the best day in a week amid rising US yields. The pair climbed to 106.10, hitting a one-week high before pulling back to the 105.90 area. The DXY turned positive and climbed to 90.40 and now stands at 90.25. The dollar gained momentum after US yields jumped to fresh monthly highs. The 10-year peaked at 1.429%, the highest in a year and then retreat to 1.379%. in Wall Street, equity prices erased losses and now main stock indices are higher. The Dow Jones rises by 0.75% and the Nasdaq 0.32%. The improvement in risk sentiment weighed on the Japanese yen, limiting the retreat of the USD/JPY. Gold (highly correlated with yields) rose $20 from the bottom, rising back above $1800, erasing most of the day’s losses. USD/JPY upside bias reaffirmed but… The rebound from the 20-day moving average (105.10) in USD/JPY reaffirmed the current bullish bias. Still, the pair continues to be unable to consolidate above the 106.00 line. If it managed to post a daily close well above, it would likely open the doors to more gains. On the flip side, 105.65/70 is again a support level to consider, followed by 105.40. A daily close under 104.90 would deteriorate the outlook for the dollar. Technical levels  

Front-month futures contracts for the American benchmark for sweet light crude oil, West Texas Intermediary (or WTI), continues to advance to the upsi

WTI managed to move above $63.00 on Wednesday, as bulls eye a test of 2020 highs in the mid-$65.00s.Positive vaccine news and a generally strong macro backdrop continue to underpin crude oil markets.Front-month futures contracts for the American benchmark for sweet light crude oil, West Texas Intermediary (or WTI), continues to advance to the upside on Wednesday and briefly even managed to rally above the $63.00 level for the first time since January 2020. WTI has thus pulled off an impressive recovery from Asia Pacific session lows of around the $61.00 level and currently trades close to $63.00, up about $1.25 or about 2.0% on the day. As the bulls remain firmly in control, many crude oil market participants look to be targeting a test of the 2020 high at $65.62 within the next few days/weeks. Driving the day Higher US government bond yields might be presenting some impediment to the stock market and risk-sensitive currencies, but not to crude oil markets, or indeed broader commodity markets. Recent moves higher in US bond yields are for the most part being caused by rising inflation expectations, a broadly bullish signal for commodities. Indeed, the macro backdrop remains very positive for crude oil markets insofar as it is inflationary and the outlook for demand looks increasingly strong; 1) the US House is moving ahead with a vote on US President Joe Biden’s $1.9T stimulus bill on Friday (which is expected to pass), 2) Fed members continue to assure markets that easy monetary conditions are here to stay for the foreseeable future and 3) positive vaccine news continues to pump the “reopening” trade, which is also being seen in equity markets (stay-at-home tech suffering whilst return to normality stocks do well). In terms of the latest vaccine news; the FDA just published a briefing document on the Johnson & Johnson vaccine and it looks likely that the vaccine will get emergency use authorization fairly soon. As a result of the above-noted positives, banks have been increasing their estimates for US GDP growth in the coming two years, with HSBC the latest (the bank now expects 2021 GDP growth of 5.0% versus its previous forecast of 3.0% and 2022 GDP growth of 3.0% versus its previous forecast of 2.5%). Crude oil markets also seemed to respond positively to a mixed, somewhat difficult to interpret weekly US Energy Information Administration Crude Oil Inventory report; headline crude oil stocks saw a very small but surprise build, confirming the surprise build indicated by Tuesday’s weekly API report. However, Distillates saw a larger than expected draw. Meanwhile, US output dropped to an average of 9.7M barrels per day (a 1.1M drop on the week before) and refinery utilisation was down 14.5%, more than the expected drop of 9.0%. Remember that the latest EIA report is being distorted by severe weather-related production disruptions seen across the Southern US states last week. Looking ahead, crude oil markets are likely to continue to focus predominantly on the demand side of the equation, meaning pandemic/vaccine-related updates remain important, as does Fed speak and the legislative progress of fiscal stimulus in the US. Given positive sentiment on these fronts, crude oil is likely to remain underpinned.  

The EUR/USD pair dropped further amid a stronger US dollar and bottomed at 1.2108, the lowest level in two days. As of writing, it is hovering around

EUR/USD rebounds to 1.2130 after hitting a fresh low at 1.2108.US yield continues to move higher, supporting the greenback.The EUR/USD pair dropped further amid a stronger US dollar and bottomed at 1.2108, the lowest level in two days. As of writing, it is hovering around 1.2120, attempting to move off lows but still under pressure.  The greenback gained ground on the back of higher US yields. The US Dollar Index printed fresh daily highs near 90.40 as US yields jump to fresh monthly highs. The 10-year rose to 1.429%, a new one-year high and then pulled back. The greenback gained versus G10 currencies, but it still remains in negative territory versus commodity and emerging market currencies amid an improvement in risk sentiment. Fed’s Chair Powell is giving testimony at another committee on Wednesday. His words so far offered no surprises. Fed’s Brainard mentioned the economy is far from goals for inflations and employment in line with yesterday’s Powell comments. EUR/USD near the 20-day SMA From a technical perspective, the rebound in EUR/USD from the lows alleviated the bearish pressure. Sill, the euro needs to recover above 1.2160 to point to further strength. On the downside, a consolidation below 1.2110 would target the next support at 1.2080. The next support is seen at 1.2050. On a wider perspective, while above the 20-day moving average at 1.2090, the bias is to the upside. A daily close well above 1.2150 is needed to clear the way to more gains. Technical levels    

EUR/GBP was choppy amid thin volumes during Asia Pacific trade, seeing a sharp sell-off to set fresh multi-month lows under the 0.8550 mark despite a

EUR/GBP has fallen again and is now under 0.8600 as GBP continues to benefit from vaccine/reopening optimism.BoE policymakers spoke before the UK Parliament Treasury Select Committee, but largely failed to rock the boat.EUR/GBP was choppy amid thin volumes during Asia Pacific trade, seeing a sharp sell-off to set fresh multi-month lows under the 0.8550 mark despite a lack of any fundamental catalysts to drive the downside at the time. The pair has since recovered from lows, but has struggled to break meaningfully back above the 0.8600 level and is currently trading in the 0.8580s, down about 0.2% or just under 20 pips on the day. Driving the day GBP continues to confound analyst fears that it may have entered overbought territory and continues to march higher versus the euro. Sterling continues to benefit from reopening and fast vaccine rollout-related optimism. As of 23 February, the UK had given 27.3 out of every 100 of its adult citizens at least one vaccine. That compares to the comparatively sluggish Eurozone rollout; Germany has administered just 6.4 vaccines per 100 adults, Spain 6.8, Italy 6.1 and France 5.9. It looks as though vaccines work; the average age of hospitalised Covid-19 patients in Israel has been plummeting as the elderly were prioritised in the country’s vaccine rollout and independent reports based on real-world data show the Pfizer and AstraZeneca vaccine significantly reduce the probability of transmission and hospitalisation. Thus, the UK stands in good stead to be able to confidently reopen its economy ahead of the European mainland. Meanwhile, compounding concerns about the EU’s sluggish vaccine rollout is news this morning that AstraZeneca, which already cut vaccine deliveries to the EU in Q1 by 60%, is to deliver less than 90M Covid-19 shots to the EU in Q2, at least 50% below its contract commitments. BoE policymakers speaking at the UK parliament Bank of England policy makers have been speaking before the Parliamentary Treasury Select Committee about the bank’s recently released Monetary Policy Report (MPR). For reference, in the latest MPR, the bank forecast a 4% drop in Q1 2021 GDP, but for full-year 2021 GDP to rise 5% (downgrade from 7.25%), then rise 7.25% in 2022 (upgrade from 5.0%), followed by a 1.25% rise in 2023 (unchanged). Meanwhile, the bank forecast that Consumer Price Inflation would be 2% in 2021, 2.25% in 2022, before dropping back to 2.0% in 2023. BoE Monetary Policy Committee members spoke about some of the upside and downside risks to the economy. In terms of the latter; Governor Andrew Bailey expressed concern regarding potential financial stability risks if the EU tried to force institutions to localise some operations in the EU. Jonathon Haskell noted risks to do with increased corporate bankruptcies and highly transmissible Covid-19 variants. Meanwhile, Ben Broadbent noted the risk that unemployment rises once the government’s furlough scheme is withdrawn. Turning to the upside risks, Haskell noted that a faster than expected vaccine rollout presents upside risks. While it is interesting to hear from the BoE as to the risks, they have their eyes on, policymaker’s comments to the Treasury Select Committee appear not to have shifted the dial for GBP at all, given that policymakers did not say much about policy. Right now, it appears likely that negative interest rates will only be implemented in the case of some of the aforementioned downside risks materialising, or if the post-Covdi-19 economic recovery disappoints the BoE’s expectations by a sufficiently wide margin.  

United States EIA Crude Oil Stocks Change came in at 1.285M, above forecasts (-5.372M) in February 19

Bank of England (BoE) Deputy Governor Ben Broadbent is delivering his remarks on the state of the economy and the policy outlook at the Treasury Selec

Bank of England (BoE) Deputy Governor Ben Broadbent is delivering his remarks on the state of the economy and the policy outlook at the Treasury Select Committee hearing. Key quotes "It is highly uncertain when the UK economy returns to full capacity." "Furlough scheme has stopped a big expansion in spare capacity in the UK labour market." "We take our inflation remit very seriously at all times." "We look at many measures of inflation expectations, these do not on average point to an expectation of above-target inflation." "We will continue to watch inflation expectations very carefully." "Inflation expectations are not at a level that would worry us." "We will consider the implications of next week's budget in may forecasts." Market reaction The GBP/USD pair showed no immediate reaction to these remarks and was last seen losing 0.11% on the day at 1.4094.  

New Home Sales in the US rose by 4.3% in January to a seasonally adjusted annual rate of 923,000, the data published jointly by the US Census Bureau a

New Home Sales in the US rose more than expected in January.US Dollar Index clings to daily gains around 90.40.New Home Sales in the US rose by 4.3% in January to a seasonally adjusted annual rate of 923,000, the data published jointly by the US Census Bureau and the Department of Housing and Urban Development showed on Wednesday. This reading followed December's increase of 5.5% (revised from 1.6%) and came in better than the market expectation of 2.1%. "The median sales price of new houses sold in January 2021 was $346,400. The average sales price was $408,800.," the publication further read. Market reaction The US Dollar Index largely ignored this report and was last seen rising 0.25% on the day at 90.39.

FOMC Chairman Jerome Powell is delivering his remarks on the state of the economy and the policy outlook at the semi-annual testimony before the US Ho

FOMC Chairman Jerome Powell is delivering his remarks on the state of the economy and the policy outlook at the semi-annual testimony before the US House Committee on Financial Services. About Jerome Powell (via Federalreserve.gov) Jerome H. Powell took office as Chairman of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028.

United States New Home Sales (MoM) above forecasts (0.855M) in January: Actual (0.923M)

United States New Home Sales Change (MoM) above expectations (2.1%) in January: Actual (4.3%)

Bank of England (BoE) Deputy Governor Ben Broadbent is delivering his remarks on the state of the economy and the policy outlook at the Treasury Selec

Bank of England (BoE) Deputy Governor Ben Broadbent is delivering his remarks on the state of the economy and the policy outlook at the Treasury Select Committee hearing. Key quotes "Risks for UK unemployment are in both directions." "There is a clear risk that unemployment will rise significantly once support furlough schemes come to an end." "No indication from bond markets that investors see MPC’s actions as anything other than necessary to meet the inflation objective." "We don't have much evidence of the UK-EU trade agreement affecting prices." "We have seen sterling appreciate because of the EU trade deal, that would have some depressive effect on UK inflation." "Hard to know if trade frictions are having opposite effect on inflation." "The main effect on UK inflation is probably from sterling strength." Market reaction The GBP/USD pair edged slightly lower following these remarks and was last seen posting small daily losses at 1.410.6

Bank of England Governor (BoE) Andrew Bailey is delivering his remarks on the state of the economy and the policy outlook at the Treasury Select Commi

Bank of England Governor (BoE) Andrew Bailey is delivering his remarks on the state of the economy and the policy outlook at the Treasury Select Committee hearing. Key quotes "Noticeable that the EU location policy for financial institutions seems to be coming to the surface." "The EU's locality policy for financial services is controversial, of dubious legality." "We would be concerned from a financial stability perspective if the EU tried to force institutions to localise some operations in the EU." "Erosion of stability of global clearing system would be a concern." Market reaction Market participants don't seem to be paying much attention to these comments. As of writing, the UK's FTSE 100 Index was down 0.22% on the day at 6,612.

Gold (XAU/USD) has sold off to test and reversed from support at 1760/1765.61, which is the May high and 50% retracement. The yellow metal is trying t

Gold (XAU/USD) has sold off to test and reversed from support at 1760/1765.61, which is the May high and 50% retracement.  The yellow metal is trying to reassert its up move but it is struggling with the initial 1814 resistance, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, reports. See – Gold Price Analysis: XAU/USD sees strong support around $1765 – Standard Chartered Key quotes “Gold is attempting to recover but will find initial resistance at 1814 (near-term resistance line) and the 200-day ma at 1862. Currently, we suspect that it is trying to reassert its up move – more work is needed.”  “Below 1760 would leave the market under pressure and attention on the 1670 June low. The 2019-2021 support line lies at 1650.”  “Initial resistance is offered by the band of moving average resistance at 1850/62. Above here lies 1906, the 21st December high, ahead of the November and September highs at 1965.84/1973.8. This remains the barrier to the 78.6% retracement at 2006.”

Jonathan Haskel, a member of the Monetary Policy Committee (MPC) of the Bank of England (BoE), is delivering his remarks on the state of the economy a

Jonathan Haskel, a member of the Monetary Policy Committee (MPC) of the Bank of England (BoE), is delivering his remarks on the state of the economy and the policy outlook at the Treasury Select Committee hearing. Key quotes "Faster vaccine rollout than government plans is upside risk for the economy." "Downside risks to February forecasts are much more prevalent." "Concerned about the dampening effect from high uncertainty in the UK-EU trade links." "Firms' ability to repay debts and avoid insolvency represents a sizeable downside risk." "Risk that worries me most is highly transmissible COVID variants." "Risks to activity are very much on the downside, risks to supply are balanced." "Less convinced that increased homeworking will yield aggregate productivity benefits." Market reaction The GBP/USD pair showed no immediate reaction to these comments and was last seen posting small daily gains at 1.4125.

Wall Street's main indexes staged a decisive rebound in the second half of the session on Tuesday but struggled to carry the momentum into Wednesday.

Wall Street's main indexes trade in the negative territory.Financials shares post strong gains on surging T-bond yields.Technology shares underperform after the opening bell on Wednesday.Wall Street's main indexes staged a decisive rebound in the second half of the session on Tuesday but struggled to carry the momentum into Wednesday. As of writing, the S&P 500 Index was down 0.1% on the day at 3,877, the Dow Jones Industrial Average was posting small losses at 31,351 and the Nasdaq Composite was losing 0.38% at 13,413. Among the 11 major S&P 500 sectors, the Financials Index is up 0.7% as the top-performer after the opening bell supported by a more-than-6% increase in the benchmark 10-year US Treasury bond yield. The Energy Index is also posting strong gains on the back of a 2% rise in crude oil prices. On the other hand, the Technology and the Communication Services indexes both lose around 1% in the early trade and weighing on tech-sensitive Nasdaq. S&P 500 chart (daily)

Spot silver prices (XAG/USD) have slipped to fresh session under the $27.50 mark in recent trade, weighed predominantly by a pick-up in US bond yields

Spot silver has prices have dropped under the $27.50 mark in recent trade amid rising US bond yields.Bond yields are being pushed higher by good vaccine news, as well as Fed Chair Powell’s “greenlight”.Spot silver prices (XAG/USD) have slipped to fresh session under the $27.50 mark in recent trade, weighed predominantly by a pick-up in US bond yields. Prior to the recent drop, spot silver had been trading close to Asia Pacific highs in the $27.90s. To the downside, should bond yields continue to rise and pressure the precious metals complex, technicians will be eyeing support for spot silver around the $27.30 mark, an area that has provided a decent floor to the price action thus far this week. Driving the day As noted, the main driver of recent downside in spot silver markets has been an acceleration in US government bond market, which has seen US yields break beyond key levels; the US-10 year yield has risen above the 1.40% mark, up over 6bps on the day, while the 30-year yield is moving into the upper 2.20s% and eyeing a test of 2.30%, up nearly 8bps on the day. Real yields have also been moving higher; the US 10-year TIPS yield is up just over 1bps and is back above -0.8%. Note that when the return on bond market investments rises, the incentive to allocate capital into non-yielding precious metals (and even stock markets, which do yield) is reduced. Driving accelerated upside in US bond yields is perhaps the latest news from the FDA, who published briefing documents saying that their safety analysis of Johnson& Johnson’s Covid-19 vaccine supported a favourable safety profile and there were no specific concerns that would preclude EUA issuance. Johnson & Johnson’s vaccine is seen as a potential game-changer as only one shot is required, so it could drastically accelerate the global vaccination drive. This feeds into the “vaccine optimism” this is being touted as one key factor behind the recent rise in US government bond yields, as good vaccine news drives expectations for a faster economic reopening and thus stronger economic growth ahead. Expectations for strong economic growth ahead are being further pumped by growing anticipation for further fiscal spending in the US; the House is expected to vote in favour of US President Joe Biden’s $1.9T stimulus bill at the end of the week and Congress is already talking about the follow-up infrastructure investment bill, that could be nearly twice as large. Note also that bond yields were effectively given a green light to continue rising from the Chairman of the US Federal Reserve on Tuesday; Jerome Powell did not express any concern about the recent rise in yields, instead attributing the rise to the above-mentioned positive fundamentals. By contrast, ECB President Christine Lagarde on Monday opted to “jawbone” European government borrowing costs lower by saying that the bank is monitoring longer duration bond yields (triggering a drop in 10-30year European government bond yields). Powell’s lack of concerns has been taken as a “green light” for US yields to rise even further. In terms of what this means for precious metals, rising real yields is set to be a problem. But for now, with the Fed also continuing to signal that ultra-accommodative monetary policy is here to stay until a lot more progress has been seen towards the bank’s dual mandate, USD upside ought to be somewhat limited, as should precious metal downside. Meanwhile, silver may outperform the likes of gold, given growing demand for its use as an industrial metal as the global economy recovers.  

Copper (LME) has already exceeded its bull “flag” target from September 2020 at $8895 but though the move looks overextended, strategists at Credit Su

Copper (LME) has already exceeded its bull “flag” target from September 2020 at $8895 but though the move looks overextended, strategists at Credit Suisse stay bullish for a test of the $10000 psychological level.  See: Copper to break above its record high and test $10,500 in the current supercycle – OCBC Key quotes “Copper (LME) has surged higher again after breaking out from its two-month consolidation and has managed to rise above $8895, the highlighted ‘flag’ price target. Although the move is becoming clearly overstretched we stay bullish with next resistance seen at the key psychological $10000 resistance level, then the key high of 2011 at $10190.” “Support is seen at $8941 initially, below which can see a fall back to $8440, potentially $8240/35, but with this ideally holding.”  

The increasing selling pressure in the Japanese yen is fuelling the upside momentum in EUR/JPY well past the 128.00 hurdle on Wednesday. EUR/JPY stron

EUR/JPY adds to gains well above 128.00 on Wednesday.Weaker Japanese yen sustains the upside momentum in the cross.US 10-year yields surpass the 1.40% mark, fresh tops.The increasing selling pressure in the Japanese yen is fuelling the upside momentum in EUR/JPY well past the 128.00 hurdle on Wednesday. EUR/JPY stronger on firm US yields EUR/JPY extends the upside for the second session in a row and trades closer to the key hurdle at 129.00 the figure, area last visited in December 2018. The strong rebound in US yields bolsters the selling bias around the Japanese yen and collaborates further with the rally in EUR/JPY, which is already navigating its second week in a row in the positive ground. Data wise, the German economy expanded 0.3% QoQ in Q4, as per latest GDP figures. In the US docket, the second testimony by Chief Powell is unlikely to come in on a different tone that yesterday’s one before Congress. EUR/JPY relevant levels At the moment the cross is gaining 0.60% at 128.61 and faces the next resistance at 128.79 (2021 high Feb.24) followed by 129.25 (monthly high Dec.13 2018 and then 130.14 (monthly high Nov.7 2018). On the other hand, a drop below 127.30 (weekly high Feb.17) would aim for 126.10 (monthly low Feb.4) and finally 125.08 (2021 low Jan.18).

The XAU/USD pair turned south in the early trading hours of the American session and dropped to a two-day low of $1,797. The sharp upsurge witnessed i

XAU/USD came under strong bearish pressure in early American session.Next near-term support is located $1,790 ahead of $1,780.$1,800 could be seen as the first hurdle.The XAU/USD pair turned south in the early trading hours of the American session and dropped to a two-day low of $1,797. The sharp upsurge witnessed in the 10-year US Treasury bond yield provided a boost to the greenback and weighed on the pair. As of writing, XAU/USD was down 0.75% on the day at $1,792.50. Gold technical outlook With the latest decline, the Relative Strength Index (RSI) indicator on the four-hour chart dropped below 50, suggesting that the bearish momentum is building up in the near-term. On the downside, the initial support is located at $1,790, where the Fibonacci 38.2% retracement of the last week's drop its located. If a four-hour candle manages to close below that level, gold could extend its slide to the next Fibo level (23.6% retracement) at $1,780. On the other hand, $1,800 psychological level, which is reinforced by the 20 and the 50 SMAs, aligns as the first hurdle ahead of $1,812 (100 SMA) and $1,815 (static level/Feb. 23 high). Gold four-hour chart Additional levels to watch for  

Economists at Credit Suisse now expect 10yr US Bond Yields to rise to 1.82% by the end of 2021, which is the 50% retracement of the entire fall from 2

Economists at Credit Suisse now expect 10yr US Bond Yields to rise to 1.82% by the end of 2021, which is the 50% retracement of the entire fall from 2018.  Key quotes “US 10yr Bond Yields have broken clearly above our prior Q1 objective at the 1.25/27% March high and trend support from 2012 with ease. This should open up a relatively direct move to 1.43/48%, which is the 38.2% retracement of the move from 2018 and the potential trend support from 2016. We expect to see a concerted pause below this level during Q1, however, the ‘double bottom’ base in 10yr US Real Yields suggests we will see a break above here later in the year, with next supports at 1.685/705%, then our new core 2021 objective at 1.82%.” “Resistance for any consolidation below 1.48/43% is seen at 1.27/25%, which we now expect to floor the market and view as an attractive fade zone for pullbacks. Next resistance is at 1.22/20%.”  

The USD/CAD pair refreshed daily tops during the early North American session, with bulls now looking to build on the momentum further beyond the 1.26

USD/CAD staged a modest rebound from 34-month lows touched earlier this Wednesday.A sharp spike in the US bond yields revived the USD demand and remained supportive.Bullish crude oil prices underpinned the loonie and kept a lid on any meaningful upside.The USD/CAD pair refreshed daily tops during the early North American session, with bulls now looking to build on the momentum further beyond the 1.2600 round-figure mark. The pair quickly reversed an intraday dip to mid-1.2500s, or the lowest level since April 2018, and rallied around 50 pips in the last hour amid a sudden pickup in the US dollar demand. The yield on the benchmark 10-year US government bond rallied beyond 1.40% for the first time since February 2020, which was seen as a key factor that provided a strong lift to the greenback. Reflation trade remains the primary theme in capital markets amid the progress on US President Joe Biden's proposed $1.9 trillion stimulus package. This comes amid the impressive pace of COVID-19 vaccinations, which has been fueling hopes for a strong global economic recovery. This, along with rising inflation expectations, continued pushing the bond yields higher. Meanwhile, the optimistic global economic outlook supported prospects for a strong recovery in fuel demand and pushed crude oil prices beyond the $63.00 mark, or 14-month tops. This, in turn, underpinned the commodity-linked loonie and turned out to be the only factor that held bulls from placing aggressive bets, rather capped the upside for the USD/CAD pair. There isn't any major market-moving economic data due for release from Canada and the US economic docket features the only release of New Home Sales. This makes it prudent to wait for some strong follow-through buying before confirming that the USD/CAD pair might have bottomed out in the near-term and positioning for any meaningful recovery move. In the meantime, market participants will look forward to Fed Chair Jerome Powell's second day of testimony before the House Financial Services Committee. Powell's remarks are expected to be identical to those delivered before the Senate Banking Committee on Tuesday, though might influence the USD price dynamics and provide some impetus to the USD/CAD pair. Technical levels to watch  

EUR/USD eases ahead of Wall Street’s opening but holds within familiar levels. US Treasury yields are standing around fresh one-year highs while the d

EUR/USD eases ahead of Wall Street’s opening but holds within familiar levels. US Treasury yields are standing around fresh one-year highs while the dollar resumes its advance, Valeria Bednarik, Chief Analyst at FXStreet, reports. Key quotes “Stocks are up, although just marginally. Treasury yields are ticking higher ahead of Wall Street’s opening, providing support to the American dollar.” “Germany published the final version of its Q4 Gross Domestic Product, which was upwardly revised to 0.3% from 0.1%. The US will publish January New Home Sales, foreseen up by 2.1%. Fed’s head Powell will repeat its testimony before a different commission.” “In the near-term, the pair is piercing its 20 SMA while holding above bearish 100 SMA and 200 SMA. Technical indicators turned south within positive levels, skewing the risk to the downside without confirming a new leg south.  

EUR/USD’s bullish attempt faltered once again near 1.2180, or multi-day highs, on Wednesday. In this area also converges a Fibo level at 1.2173. As lo

EUR/USD’s weekly upside lost momentum around 1.2180.The vicinity of 1.2200 remains a key hurdle for EUR-bulls.EUR/USD’s bullish attempt faltered once again near 1.2180, or multi-day highs, on Wednesday. In this area also converges a Fibo level at 1.2173. As longs as bulls can’t surpass the 1.2180/90 band in the short-term horizon, further consolidation remains likely. When and If the buying impulse picks up convincing pace and leaves behind this region, selling pressure is expected to mitigate and allow for a probable visit to the YTD highs in the 1.2350 zone. On the broader picture, the constructive stance in EUR/USD remains unchanged while above the critical 200-day SMA, today at 1.1770. Looking at the monthly chart, the (solid) breakout of the 2008-2020 line is a big bullish event and should underpin the continuation of the current trend in the longer run. EUR/USD daily chart  

The 10-year US Treasury bond yield gained more than 1% on Monday and touched its highest level in nearly 1 year at 1.394%. After staging a correction

The 10-year US Treasury bond yield gained more than 1% on Monday and touched its highest level in nearly 1 year at 1.394%. After staging a correction and losing 1.7% on Tuesday, the 10-year T-bond yield regained its traction and advanced above 1.4% for the first time since February 24, 2020. As of writing, the yield on the 10-year reference was up 5.2% on the day at 1.412%. Supported by this market development, the US Dollar Index started to edge higher in the early American session and was last seen rising 0.2% on the day at 90.35.FOMC Chairman Powell to deliver identical remarks to House Financial Services Committee. 

The USD/CHF pair added to the previous day's strong move up and gained some follow-through traction for the second consecutive session on Wednesday. T

USD/CHF gained strong positive traction for the second straight session on Wednesday.Bullish oscillators on the daily chart support prospects for a further appreciating move.A move towards 200-DMA, around the 0.9145 region, now looks a distinct possibility.The USD/CHF pair added to the previous day's strong move up and gained some follow-through traction for the second consecutive session on Wednesday. The momentum pushed the pair to the highest level since early December 2020, around the 0.9085 area. The mentioned region marks the 61.8% Fibonacci level of the 0.9297-0.8758 downfall, which if cleared will set the stage for additional gains. The USD/CHF pair might then surpass the 0.9100 mark and aim to challenge 200-day SMA, around the 0.9145 region. Meanwhile, technical indicators on the daily chart are holding in the positive territory and still far from being in the overbought zone. However, RSI on the 4-hourly chart is already flashing overbought conditions and warrants some caution for bulls. This seemed to be the only factor holding bulls from placing fresh bets. Hence, it will be prudent to wait for some follow-through buying beyond the 61.8% Fibo. level before traders start positioning for any further near-term appreciating move. On the flip side, the 50% Fibo. level, around the 0.9030 region, now seems to protect the immediate downside. This is followed by supports near the key 0.9000 round-figure mark and 100-day SMA support, currently around the 0.8985-80 region. The latter nears 38.2% Fibo. level and a subsequent slide will negate the constructive outlook. This, in turn, will set the stage for a slide towards the 0.8915 horizontal support en-route 23.6% Fibo. level, around the 0.8885-80 region. USD/CHF daily chart Technical levels to watch  

The US Federal Reserve said on Wednesday that FOMC Chairman Jerome Powell's prepared remarks to the House Financial Services Committee on Wednesday wi

The US Federal Reserve said on Wednesday that FOMC Chairman Jerome Powell's prepared remarks to the House Financial Services Committee on Wednesday will be identical to those delivered before the Senate Banking Committee on Tuesday. "The economy is a long way from our employment and inflation goals and it is likely to take some time for substantial further progress to be achieved," Powell said on Tuesday. "We will continue to clearly communicate our assessment of progress toward our goals well in advance of any change in the pace of purchases." "We are committed to using our full range of tools to support the economy and to help ensure that the recovery from this difficult period will be as robust as possible," the chairman concluded before answering questions. Market reaction The US Dollar Index is edging higher in the early American session and was last seen gaining 0.15% on a daily basis at 90.30.

The one-shot COVID-19 vaccine developed by Johnson & Johnson appeared effective and safe in the latest trials, the US Food and Drug Administration (FD

The one-shot COVID-19 vaccine developed by Johnson & Johnson appeared effective and safe in the latest trials, the US Food and Drug Administration (FDA) announced in a document published on Wednesday, as reported by Reuters. "The FDA's panel of independent experts meets on Friday to decide whether to approve the shot," Reuters noted. "While it is not bound to follow the advice of its experts, the FDA did so when authorizing the Pfizer Inc and Moderna Inc vaccines." Market reaction The market mood remains upbeat following this headline and the S&P 500 Futures were last seen gaining 0.38% on the day at 3,892.

Gold continued with its struggle for a firm intraday direction and remained confined in a range below the $1810 level through the mid-European session

Gold struggled to capitalize on its intraday positive move and remained confined in a range.The underlying bullish sentiment, pickup in the US bond yields collaborated towards capping.The bias seems tilted in favour of bearish traders and supports prospects for further weakness.Gold continued with its struggle for a firm intraday direction and remained confined in a range below the $1810 level through the mid-European session. The US dollar witnessed some fresh selling in reaction to Tuesday's dovish sounding comments by Fed Chair Jerome Powell. This, in turn, was seen as a key factor that assisted the dollar-denominated commodity to build on the previous day's bounce from sub-$1800 levels. However, a combination of factors kept a lid on any further gains for the XAU/USD. Investors remained optimistic about the global economic outlook amid the rollout of COVID-19 vaccines and the progress on US President Joe Biden's proposed $1.9 trillion stimulus package. This was evident from the underlying bullish tone in the financial markets, which held bulls from placing aggressive bets around the safe-haven commodity. Apart from this, a modest pickup in the US Treasury bond yields further collaborated to cap the non-yielding yellow metal. The market has been reacting strongly to the prospects for a massive US fiscal spending plan and pushed the yield on the benchmark 10-year US government bond back closer to over one-year tops. Hence, any meaningful positive move might be seen as an opportunity for bearish traders. Market participants now look forward to Powell's second day of testimony before the House Financial Services Committee, which might influence the US bond yields and the USD. This, along with the broader market risk sentiment, might produce some trading opportunities around the XAU/USD. Technical levels to watch  

S&P 500 has achieved its “measured top objective” at 3819/17 within the space of two sessions and the Credit Suisse analyst team now shifts its bias b

S&P 500 has achieved its “measured top objective” at 3819/17 within the space of two sessions and the Credit Suisse analyst team now shifts its bias back higher, looking for a resumption of the core uptrend. Key quotes “Our bias is to look for the recovery from Tuesday to continue with resistance seen at 3903/07 initially, above which should see a move back to 3930/34. Beyond this latter area is needed to further reinforce the likelihood the core uptrend has indeed resumed for strength back to the 3950/51 highs. Above here in due course should see a move to 4070/75.”  “Support moves to 3852/51 initially, with 3832 now ideally holding further weakness. A break though would warn of a move back to 3806, then what we look to be solid support at 3792/66 - the early February price gap and rising 63-day average.”

Crude oil prices regained bullish momentum following Tuesday's pullback. The barrel of West Texas Intermediate (WTI) posted a daily loss of 1.6% and c

WTI is rising sharply after Tuesday's decline, trades above $62.Investors await EIA's weekly Crude Oil Stocks Change data.Crude oil prices regained bullish momentum following Tuesday's pullback. The barrel of West Texas Intermediate (WTI) posted a daily loss of 1.6% and closed at $61.18 after touching its highest level in more than a year at $62.97 on Tuesday. Ahead of the US Energy Information Administration's (EIA) weekly Crude Oil Stock report, the WTI is up 1.8% on the day at $62.30. Eyes on EIA data The weekly report published by the American Petroleum Institue (API) showed a surprise 1.02 million barrels increase in US crude oil inventories. However, the underlying details of the publication revealed that there was a much larger-than-expected draw of 4.5 million barrels in distillate fuels. The EIA is expected to report a decline of 5.3 million barrels in oil stocks in the week ending February 19.  Meanwhile, oil producers in Texas are slowly returning to normal production levels following last week's disruptions due to bad weather conditions. Nevertheless, the oil output in the US remains well below its full capacity.  Citing IIR Energy, Reuters reported on Wednesday that the oil refiners in the US are expected to have 7.2 million barrels per day (bpd) of capacity offline for the week ending February 26. Technical levels to watch for  

The USD/JPY pair added to its strong intraday gains and refreshed weekly tops, around the 105.85 region during the mid-European session. The pair buil

USD/JPY gained strong positive traction for the second consecutive session on Wednesday.A rebound in the equity markets undermined the safe-haven JPY and remained supportive.Bulls also took cues from a pickup in the US bond yields, though weaker USD capped gains.The USD/JPY pair added to its strong intraday gains and refreshed weekly tops, around the 105.85 region during the mid-European session. The pair built on the previous day's goodish rebound from levels below the key 105.00 psychological mark and gain some follow-through traction for the second consecutive session on Wednesday. The early move up was led by some cross-driven strength stemming from a strong rally in the GBP/JPY cross. The uptick got an additional boost from a turnaround in the equity markets, which tends to undermine the safe-haven Japanese yen. The global risk sentiment remained well supported by the progress in COVID-19 vaccinations and US President Joe Biden's proposed $1.9 trillion stimulus package. Meanwhile, the US bond market continued reacting to the prospects for a massive US fiscal spending plan. This was evident from a fresh leg up in the US Treasury bond yields, which further inspired bullish traders and remained supportive of the strong intraday positive move for the USD/JPY pair. The US dollar, however, failed to benefit from an uptick in the US bond yields. This seemed to be the only factor that might hold investors from placing aggressive bullish bets and keep a lid on any runaway rally for the USD/JPY pair amid absent relevant market-moving economic releases from the US. Market participants now look forward to Powell's second day of testimony before the House Financial Services Committee, which might influence the US bond yields and the USD. This, along with the broader market risk sentiment, might produce some short-term trading opportunities around the USD/JPY pair. Technical levels to watch  

Brazil Current Account registered at $-7.25B above expectations ($-7.75B) in January

DXY keeps the rangebound trading in the 90.00 region, always supported by the key 2020-2021 support line (near 89.80). While further consolidation aro

DXY extends the consolidative mood around 90.00.Further south of this level comes in the 2021 lows at 89.20.DXY keeps the rangebound trading in the 90.00 region, always supported by the key 2020-2021 support line (near 89.80). While further consolidation around this area is not ruled out, the psychological support at 90.00 emerges as a crucial barrier for USD-sellers. A breakdown of this zone should open the door to a probable move to the 2021 lows around 89.20 (January 6) ahead of the March 2018 low at 88.94. In the meantime, occasional bouts of upside pressure in the index are deemed as corrective only amidst the broader bearish view on the dollar. That said, bullish attempts to the 91.00 hurdle and beyond could represent selling opportunities against the current backdrop. In the longer run, as long as DXY trades below the 200-day SMA (93.21), the negative stance is expected to persist. DXY daily chart    

GBP/USD has tumbled over 100 pips from the highs after a massive rally. Fed Chair Powell´s dovishness and the UK´s exit plan may trigger a new upward

GBP/USD has tumbled over 100 pips from the highs after a massive rally. Fed Chair Powell´s dovishness and the UK´s exit plan may trigger a new upward move after the correction ends, Yohay Elam, an Analyst at FXStreet, reports. Key quotes “Bloated estimates about Britain's bounceback are behind the fall, but the picture remains positive for sterling as the vaccination campaign continues at full speed.”  “Powell appears before Congress again on Wednesday and will likely reiterate that the Fed ‘is not thinking about thinking of raising rates’ as he once said. For the dollar, while ten-year Treasury yields hold below 1.50%, the dollar's gains will likely be limited.”  “The Relative Strength Index on the 4-hour chart is still above 70 – indicating overbought conditions but below extreme levels seen earlier. Other indicators such as momentum and cable's trading above the 50, 100 and 200 Simple Moving Averages are pointing down.” “Support awaits at 1.4095, a temporary cap on the way up, and then by 1.4050, a support line seen earlier this week.” “Resistance is at 1.42, the round number, and then the new 2021 peak of 1.4240.”

EUR/JPY gathers extra steam and clinches fresh 2021 highs in the 128.80 region on Wednesday. The rally in the cross stays unabated so far and now targ

EUR/JPY picks up extra pace and approaches 129.00.Next on the upside comes in the 129.00 neighbourhood.EUR/JPY gathers extra steam and clinches fresh 2021 highs in the 128.80 region on Wednesday. The rally in the cross stays unabated so far and now targets the 129.00 mark initially. Further up is located the 129.30 zone (November 29/December 13 2018 highs) ahead of the psychological hurdle at 130.00. If the buying impulse remains strong then the monthly peaks at 130.14 (November 7 2018) could emerge on the horizon. Reinforcing the idea of further upside, EUR/JPY keeps trading above the immediate support line (off November 19 2020 low) near 126.60. This area is also supported by the 55-day SMA. Looking at the broader picture, while above the 200-day SMA at 124.13 the outlook for the cross should remain constructive. EUR/JPY daily chart  

GBP strength has been gathering momentum allowing the pound to top the G10 performance table in the year to date. Nonetheless, economists at Rabobank

GBP strength has been gathering momentum allowing the pound to top the G10 performance table in the year to date. Nonetheless, economists at Rabobank see hurdles for GBP heading into the spring though expect the EUR/GBP pair to settle in the 0.85 zone by year-end. Key quotes “Issues related to red tape at the UK’s borders and problems connected with the Northern Ireland protocol have ensured that Brexit continues to cast shadows. In particular, the Northern Ireland issue has the potential to complicate UK politics and weigh on the pound in the coming months.” “Another hurdle for GBP could be the Scottish elections in May. If the SNP performs well, as expected, the possibility of another Independence Referendum will rise. Scottish press are reporting on the possibility of an ‘illegal’ vote potentially this year. This could raise further questions about the state of the union in the UK.”  “While the UK economy will be opening up this year, the PM’s plan is more cautious than many had expected and this could also hinder the pace of the economic bounce back. Johnson this week indicated that restrictions may not be fully lifted until June 21.” “Bullish momentum in the pound has pushed EUR/GBP through our long held 0.87 medium-term target. The move may have further to run in the near-term. However, we see bumps in the road ahead and see scope for pullbacks in the spring before EUR/GBP settles in the 0.85 area later in the year.”  

Brazil Mid-month Inflation above expectations (0.46%) in February: Actual (0.48%)

Mexico Retail Sales (YoY) came in at -5.9% below forecasts (-5.6%) in December

The GBP/USD pair surrendered a major part of the strong intraday gains to 34-month tops and might now be headed towards the lower end of its daily tra

GBP/USD gained strong positive traction on Wednesday and shot to fresh 34-month tops.A pickup in the US bond yields extended some support to the USD and capped the upside.Overbought conditions further prompted the GBP bulls to take some profits off the table.The GBP/USD pair surrendered a major part of the strong intraday gains to 34-month tops and might now be headed towards the lower end of its daily trading range. The pair was last seen trading around the 1.4135 region, up only 0.20% for the day. The pair prolonged its recent bullish trajectory and gained some strong follow-through traction during the early part of the trading action on Wednesday. The British pound remained the best performing G-10 currency amid optimism that the impressive pace of COVID-19 vaccination will allow the UK economy to re-open more quickly than the rest of the world. The momentum was further supported by a softer tone surrounding the US dollar and pushed the GBP/USD pair back above the 1.4200 mark for the first time since April 2018. However, a goodish pickup in the US Treasury bond yields extended some support to the greenback. This, along with near-term overbought conditions prompted some profit-taking around the major. The US bond market continued reacting to the progress on US President Joe Biden's proposed $1.9 trillion stimulus package. In the latest development, House Majority Leader Steny Hoyer said that a vote on the spending plan will be held on Friday, which helped offset the Fed Chair Jerome Powell's dovish remarks during his congressional testimony on Tuesday. It, however, remains to be see if the GBP/USD pair attracts fresh buying at lower levels or the pullback marks near-term bullish exhaustion. In the absence of any major market-moving economic releases, Powell's second day of testimony before the House Financial Services Committee might influence the USD and provide some impetus to the major. Technical levels to watch  

The USD/CAD pair closed the previous four trading days in the negative territory and continues to edge lower on Wednesday. As of writing, the pair was

USD/CAD is falling for the fifth straight day on Wednesday.WTI is up more than 1% ahead of EIA's Crude Oil Stocks Change data.US Dollar Index stays quiet above 90.00 ahead of Powell's testimony.The USD/CAD pair closed the previous four trading days in the negative territory and continues to edge lower on Wednesday. As of writing, the pair was trading a little above the multi-year lows it set at 1.2557, losing 0.2% on a daily basis at 1.2564. WTI climbs above $62 ahead of EIA report Rising crude oil prices provide a boost to the commodity-related loonie on Wednesday. At the moment, the barrel of West Texas Intermediate (WTI) is rising 1.5% at $62.10. Later in the session, the US Energy Information Administration's (EIA) weekly Crude Oil Stocks Change data will be looked upon for fresh impetus. Investors expect to see a decline of 5.3 million barrels in US crude oil inventories and a bigger-than-expected draw could help the WTI preserve its bullish momentum. On the other hand, the US Dollar Index is staying relatively calm following Tuesday's modest rebound and allowing crude oil prices to continue to impact USD/CAD's movements. Later in the session, FOMC Chairman Jerome Powell will be testifying before the House Financial Services Committee. On Tuesday, Powell reassured markets that they will continue to support the economy and downplayed concerns over a potentially sharp upsurge in inflation. Wall Street's main indexes staged a decisive rebound on Powell's remarks and a similar market reaction could force the greenback to remain on the back foot. Technical levels to watch for  

Mexico Retail Sales (MoM) came in at -2.4%, below expectations (1.2%) in December

Mexico 1st half-month Core Inflation below expectations (0.25%) in February: Actual (0.22%)

Mexico 1st half-month Inflation came in at 0.23%, below expectations (0.27%) in February

United States MBA Mortgage Applications down to -11.4% in February 19 from previous -5.1%

Economist at UOB Group Barnabas Gan assesses the latest inflation figures in Singapore. Key Quotes “Singapore’s consumer price index rose for the seco

Economist at UOB Group Barnabas Gan assesses the latest inflation figures in Singapore. Key Quotes “Singapore’s consumer price index rose for the second straight month at +0.2% y/y (0.0% m/m sa) in January 2021. This compares to market estimates for CPI to expand 0.2% y/y (-0.2% m/m sa). Core prices, however, fell for its 12th consecutive month at -0.2% y/y.” “Similar to the previous readings, consumer prices were supported by food (+1.5% y/y), communications (+1.2% y/y) and household durables & services (+1.0% y/y).” “The balance of risk for inflation in 2021 is likely tilted to the upside. The rebound in commodity prices, including Brent crude oil prices, could add to rising inflation risk. Coupled with the dissipation of disinflationary effects by government subsidies seen in 2020, Singapore’s electricity & gas tariffs will also likely pick-up in the year ahead. In line with the global economic recovery backdrop, domestic services prices and accommodation costs could also increase in 2021.” “Still, the uncertainties surrounding COVID-19 and the negative impact it has on economic growth could mitigate price pressures.” “In all, we expect both headline and core inflation to head higher and average a moderate 0.5% in 2021. This compares to the official outlook for headline inflation to range between -0.5% and +0.5%, and core inflation to average 0.0% to 1.0% in the year ahead.”

USD/JPY is trading at daily highs near the 105.80 level. The pair has lost its bearish strength but needs to break above 105.95 to reinforce the bulli

USD/JPY is trading at daily highs near the 105.80 level. The pair has lost its bearish strength but needs to break above 105.95 to reinforce the bullish case, Valeria Bednarik, Chief Analyst at FXStreet, reports. Key quotes “The greenback is generally weak following US Federal Reserve chief Jerome Powell´s testimony before Congress on Tuesday. Equities advanced and the dollar fell after the event, as Powell hinted quantitative easing would stay for long. He also poured cold water on Treasury yields, which have stabilized near their recent highs.” “The USD/JPY pair is trading at daily highs and at risk of extending its advance, despite a limited bullish momentum in the near-term. The bullish case will be stronger if the pair manages to clear the 105.95 resistance area.”  

The NZD/USD pair jumped to its highest level since April 2018 at 0.7393 on Wednesday and seems to have gone into a consolidation phase ahead of the Am

NZD/USD rose to its highest level since April 2018 on Wednesday.RBNZ left its policy rate unchanged at 0.25% as expected.US Dollar Index moves sideways above 90.00 ahead of Powell's testimony.The NZD/USD pair jumped to its highest level since April 2018 at 0.7393 on Wednesday and seems to have gone into a consolidation phase ahead of the American session. As of writing, the pair was up 0.55% on the day at 0.7380. RBNZ's upbeat outlook lifts NZD As expected, the Reserve Bank of New Zealand left its policy rate unchanged at 0.25% following its policy meeting. Although the policy statement showed that the RBNZ is ready to lower the policy rate if needed, the upbeat economic outlook helped kiwi gather strength. Commenting on the policy statement, "the RBNZ now views risks to the economic outlook as ‘balanced’ rather than ‘less skewed to the downside’," noted economists at MUFG Bank. "The RBNZ still sees one more quarter of GDP contraction in Q1 before the economy recovers more sustainably. The GDP forecast for this year was lifted to 4.0% up from 3.6%.” Meanwhile, the greenback struggles to build on Tuesday's recovery gains as investors await FOMC Chairman Jerome Powell to testify before the House Financial Services Committee. At the moment, the US Dollar Index (DXY) is virtually unchanged on the day at 90.15. Additionally, New Home Sales data will be featured in the US economic docket. In the early trading hours of the Asian session on Thursday, the ANZ Business Confidence and Activity Outlook data from New Zealand will be looked upon for fresh impetus. Technical levels to watch for  

USD/CHF saw a strong and unexpected surge higher, breaking above the crucial early February high and the downtrend from early 2020, currently at 0.903

USD/CHF saw a strong and unexpected surge higher, breaking above the crucial early February high and the downtrend from early 2020, currently at 0.9036/46 to suggest further short-term upside, per Credit Suisse. Key quotes “We shift our immediate bias in favor of further upside, with the first and initial test seen at the 61.8% retracement of the fall from September 2020 at 0.9090. Although we ideally look for this area to cap for a move lower, we see scope for an overshoot back to the 200-day average at 0.9142. We expect a more concerted effort to hold at this point.”  “Support is initially seen at 0.9039, beneath which would see a small intraday top completed to suggest a move back to 0.8975/57 – a cluster of key short-term averages.”  “Beneath 0.8949 would instead see the ‘outside day’ negated and see support next at 0.8934, where we would expect to see another attempt to hold at first.”  

EUR/GBP has removed with ease the 0.8609/07 mark and this should see the trend stay directly lower with next support seen at 0.8520 – the 38.2% retrac

EUR/GBP has removed with ease the 0.8609/07 mark and this should see the trend stay directly lower with next support seen at 0.8520 – the 38.2% retracement of the entire 2015/2020 bull trend, analysts at Credit Suisse appraise. Key quotes “EUR/GBP has seen a sharp fall and spike lower overnight and this sees the market remove with ease our first core objective of the “neckline” to the late 2019/early 2020 base and long-term uptrend from late 2015 at 0.8609/07. This sees the immediate trend stay directly lower with support seen next at 0.8542/33, then 0.8520 – the 38.2% retracement of the entire 2015/2020 bull trend.”  “Whilst we would look for the 0.8520 mark to hold at first, below in due course should see a move to the ‘measured objective’ from the large ‘head & shoulders’ top at 0.8430, and now we think an eventual test of the 0.8281/39 lows of 2019 and 2020”.  “Resistance moves to 0.8586 initially, above which can see a move back to 0.8616, then 0.8637, with 0.8685 now ideally capping further strength.”  

Germany 10-y Bond Auction: -0.32% vs -0.54%

Japanese Prime Minister Yoshihide Suga said on Wednesday that they will announce on Friday whether or not they decide to end the state of emergency du

Japanese Prime Minister Yoshihide Suga said on Wednesday that they will announce on Friday whether or not they decide to end the state of emergency due to the coronavirus outbreak, as reported by Reuters. Suga further noted that they will start vaccinations for the elderly from April 12. Market reaction These comments don't seem to be having a noticeable impact on the JPY's performance against its major rivals. As of writing, the USD/JPY pair was trading at 105.77, rising 0.5% on a daily basis. 

Money markets point to the Bank of England's (BoE) policy rate remaining above zero at least until 2022, Reuters reported on Wednesday. In early Febru

Money markets point to the Bank of England's (BoE) policy rate remaining above zero at least until 2022, Reuters reported on Wednesday. In early February, money markets were expecting the BoE to lower the policy rate into negative territory as early as June 2021. Market reaction This headline doesn't seem to be having a significant impact on the British pound's performance against its major rivals. As of writing, the GBP/USD pair was up 0.23% on the day at 1.4143. Meanwhile, the UK's FTSE is virtually unchanged at 6,630.

The AUD/USD pair closed flat on Tuesday and climbed to its highest level in nearly three years at 0.7945 during the Asian trading hours on Wednesday.

AUD/USD lost its traction after edging higher in the Asian session.US Dollar Index stays quiet above 90.00 on Wednesday.FOMC Chairman Powell will testify before House Financial Services Committee.The AUD/USD pair closed flat on Tuesday and climbed to its highest level in nearly three years at 0.7945 during the Asian trading hours on Wednesday. However, the pair struggled to preserve its bullish momentum and erased its daily gains. As of writing, AUD/USD was virtually unchanged on the day at 0.7910. DXY remains on the back foot following Tuesday's recovery  The US Dollar Index (DXY) closed in the positive territory and snapped a three-day losing streak on Tuesday but struggled to extend its rebound following FOMC Chairman Jerome Powell's dovish remarks. Powell reiterated that they won't react to one-time increases in inflation and said that they will keep the policy accommodative. Currently, the DXY is posting small daily losses at 90.14. Later in the day, Powell will deliver his remarks on the second day of his semi-annual testimony, this time before the House Financial Services Committee. New Home Sales for January will be the only data featured in the US economic docket. The data published by the Australian Bureau of Statistics revealed on Wednesday that the Wage Price Index in the fourth quarter rose to 0.6% from 0.1% in the third quarter and beat the market expectation of 0.3%. Nonetheless, the market reaction to this report was muted. On Thursday, Private Capital Expenditure data for the fourth quarter from Australia will be looked upon for fresh impetus. Technical levels to watch for  

Above 1.2190, the EUR/USD pair should bring its consolidation phase to an end for a resumption of the uptrend and a move back to 1.2345/55, in the vie

Above 1.2190, the EUR/USD pair should bring its consolidation phase to an end for a resumption of the uptrend and a move back to 1.2345/55, in the view of analysts at Credit Suisse. Key quotes “Above 1.2190 should establish a near-term ‘head & shoulders’ base to confirm a move back to the 1.2345/55 highs. Whilst we a fresh rejection from here should be catered for, we continue to look for an eventual break for a move to our 1.2518/98 core long -held target – the 2018 high and 38.2% retracement of the entire 2008/2017 bear market. We expect this to remain a major barrier.”  “Support moves to 1.2135 initially, then the 13-day exponential average at 1.2119, with 1.2090 now ideally holding further weakness to keep the immediate risk higher. Below would warn of lengthier ranging and a fall back to retest 1.2023/19.”  

The single currency regains some composure and lifts EUR/USD to the 1.2170 region once again, where it met some decent resistance (once again…). EUR/U

EUR/USD fades Tuesday’s pullback and retests 1.2170.German Q4 GDP came in at -3.7%, above consensus.Chief Powell will testify again before Congress later on Wednesday.The single currency regains some composure and lifts EUR/USD to the 1.2170 region once again, where it met some decent resistance (once again…). EUR/USD bid on risk-on mood EUR/USD quickly leaves behind Tuesday’s small downtick and regains the 1.2170 region, although a break of this area still remains elusive for EUR-bulls. The positive performance of EUR/USD comes in response to the sour sentiment in the dollar, particularly after Chief Powell reinforced the continuation of the current dovish stance from the Federal Reserve. Powell’s semiannual Monetary Policy Report reiterated that both inflation and the labour market run well below the Fed’s target and support further the view that an interest rate hike is still far away. In the euro docket, German final GDP figures noted the economy expanded 0.3% QoQ during the October-December period, surpassing initial estimates. Still in the euro area, France’s Business Confidence improved a tad to 97 for the current month, albeit below the 99 expected. Across the pond, MBA will publish its weekly figures for Mortgage Applications seconded by New Home Sales and the EIA’s weekly report on crude oil inventories. In addition, Fed’s Powell will once again take centre stage following another testimony, this time before the House Financial Services Committee. Furthermore, FOMC’s L.Brainard (permanent voter, dovish) is due to speak, while Vice Chair R.Clarida (permanent voter, dovish) will speak on “US Monetary Outlook and Monetary Policy”. What to look for around EUR EUR/USD manages well to keep business above the 1.2100 mark so far, facing usual resistance near the critical 1.2200 mark. The constructive outlook for the pair, however, is expected to remain unchanged in the longer run, always supported by the reflation/vaccine trade and hopes of a strong recovery in the region. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR along with the huge, long positioning in the speculative community.Key events in Euroland this week: European Council meeting (Thursday and Friday). ECB’s Lagarde will participate in the G20 meeting of central bank governors and finance ministers on FridayEminent issues on the back boiler: EUR appreciation could trigger ECB verbal intervention, always on inflation issues. EU Recovery Fund. Huge long positions in the speculative community. EUR/USD levels to watch At the moment, the index is gaining 0.03% at 1.2152 and a breakout of 1.2180 (weekly high Feb.23) would target 1.2189 (weekly high Jan.22) en route to 1.2349 (2021 high Jan.6). On the downside, the next support at 1.2023 (weekly low Feb.17) followed by 1.2008 (100-day SMA) and finally 1.1952 (2021 low Feb.5).

The USD/CHF pair jumped to the highest level since early December, around the 0.9085 region in the last hour, albeit quickly retreated few pips therea

USD/CHF gained traction for the second consecutive session on Wednesday.Bulls seemed rather unaffected by a softer tone surrounding the greenback.Receding safe-haven demand weighed on the CHF and remained supportive.The USD/CHF pair jumped to the highest level since early December, around the 0.9085 region in the last hour, albeit quickly retreated few pips thereafter. The pair built on the previous day's strong positive momentum and gained some follow-through traction for the second consecutive session on Wednesday. The uptick lacked any obvious fundamental catalyst and could be attributed to some cross-driven strength stemming from a strong rally in the EUR/CHF cross. This comes on the back of the overnight sustained strength above the 100-day SMA and seemed to have prompted some technical buying. Apart from this, a turnaround in the global risk sentiment – as depicted by a goodish bounce in the equity markets – undermined the safe-haven Swiss franc and remained supportive. That said, a weaker tone surrounding the US dollar held bulls from placing aggressive bets and kept a lid on any further gains for the USD/CHF pair. The USD was pressured by a modest pullback in the US Treasury bond yields, which started losing steam after Fed Chair Jerome Powell's dovish comments on Tuesday. During the first day of his semi-annual testimony before the Congress, Powell reiterated that interest rates will remain low and the Fed will keep buying bonds to support the US economic recovery. This makes it prudent to wait for some follow-through buying before traders start positioning for any further appreciating move. Wednesday's US economic docket highlights the only release of New Home Sales data. Hence, the key focus will remain on Powell's second day of the semi-annual testimony before Congress. This might influence the USD price dynamics and produce some short-term trading opportunities around the USD/CHF pair. Technical levels to watch  

The Deutsche Bank economists raised their 2021/2022 forecasts for US GDP amid expectations of a bigger stimulus package, Reuters reports, citing a str

The Deutsche Bank economists raised their 2021/2022 forecasts for US GDP amid expectations of a bigger stimulus package, Reuters reports, citing a strategist at the German bank on Wednesday. Key quotes "They've revised their baseline expectations for the next fiscal plan up from nearly $1 trillion to $1.6-1.7 trillion, with their 2021 growth forecast upgraded by 1.2 percentage points to 7.5% (Q4/Q4) and their inflation numbers pushed a bit higher too with risks on the upside.” “Expect the Federal Reserve to announce a tapering of its bond buying programme at the December meeting with a clear signal of the timeline in August.”

The Bank of Japan (BOJ) must conduct a genuine review that takes a harder look at the rising side-effects of prolonged easing, former central bank Dep

The Bank of Japan (BOJ) must conduct a genuine review that takes a harder look at the rising side-effects of prolonged easing, former central bank Deputy Governor Hirohide Yamaguchi told Reuters. Key quotes “The costs of the bank’s stimulus programme have become too large to mitigate in the review in March.” “It’s unlikely the BOJ can come up with an outcome that has a substantial impact on the economy and markets.”  “The review will probably be just a show of gesture that it’s doing ‘something’ to address the cost.” Related readsBOJ’s Kuroda: Bond purchases are for monetary policy purposes, not for the governmentUSD/JPY holds steady near two-day tops, just above mid-105.00s

The outlook for USD/CNH is expected to remain constructive as long as it trades above the 6.4200 level, noted FX Strategists at UOB Group. Key Quotes

The outlook for USD/CNH is expected to remain constructive as long as it trades above the 6.4200 level, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘the underlying tone has softened’ and we were of the view that USD ‘could drift lower but is unlikely to threaten the support at 6.4400’. Our expectation did not materialize as USD traded in a relatively quiet manner between 6.4543 and 6.4742. The underlying tone still appears to be soft and we continue to see chance for USD to drift lower to 6.4400. For today, a sustained decline below this level is unlikely. Resistance is at 6.4680 followed by 6.4760.” Next 1-3 weeks: “One week ago on 17 Feb (spot at 6.4285), we held the view ‘the current rebound in USD could extend to 6.4500’. As USD advances, we noted in our latest narrative from last Friday (19 Feb, spot at 6.4580) that ‘outlook for USD is still positive’ and ‘the next resistance level of note is at 6.4920’. USD rose to 6.4760 yesterday before easing off. Shorter-term momentum has waned somewhat but there is no change in our view for now. Only a break of 6.4200 (no change in ‘strong support’ level) would indicate that 6.4920 is out of reach this time round.”

EUR/CHF has surged dramatically higher, closing above 1.0916 to complete a major base, which suggests further upside, with next resistance seen at 1.1

EUR/CHF has surged dramatically higher, closing above 1.0916 to complete a major base, which suggests further upside, with next resistance seen at 1.1060/78, the Credit Suisse analyst team informs. Key quotes “We look for a renewed test of the October 2019 high at 1.1060/63, with the 38.2% retracement of the entire 2018/2020 fall at 1.1078 just above, where a more concerted pause is likely in our view. Next resistances above here though are seen at 1.1111, then 1.1172, before another major retracement level at 1.1255.” “Big picture, we note that the ‘measured base objective’ is seen much higher at 1.1326.” “Support moves initially to 1.1000, then 1.0981, beneath which would see a small intraday top completed and suggest a move back to 1.0916/15. Only below here would instead mark an important failure and negate the base in place, with support seen next at 1.0890.”  

The price of copper (futures on Comex) is looking to extend its correction from nine-and-a-half year highs reached $4.2365 in early Asia. In doing so,

Copper price could see a rising channel breakdown on the 1H chart. Acceptance below 50-HMA support is critical for the red metal bears.  RSI stays bearish, points to further downside in the offing. The price of copper (futures on Comex) is looking to extend its correction from nine-and-a-half year highs reached $4.2365 in early Asia. In doing so, the red metal is eyeing a sustained move below the horizontal 50-hourly moving average (HMA) at $4.16. Sellers need acceptance below the latter to unleash more losses, with the rising channel support at $4.1055 on their radars. A channel breakdown will get validated on an hourly closing below that support, opening floors towards the upward-sloping 100-HMA at $4.0675. Price of copper: Hourly chart Alternatively, if the copper bulls manage to resist above the 50-HMA, the price could bounce back towards $4.20. Further up, the channel barrier at $4.2395 will get tested, as the buyers clinch fresh decade highs. The relative strength index (RSI) points south while below the midline, suggesting that there is more room to the downside.

The GBP/JPY cross maintained its strong bid tone near the highest level since May 2018, with bulls awaiting a sustained move beyond the key 150.00 psy

A broad-based GBP strength pushed GBP/JPY to the highest level since May 2018 on Wednesday.The optimistic global economic outlook undermined the safe-haven JPY and remained supportive.Investors now eye BoE's Monetary Policy Report Hearing for some meaningful trading opportunities.The GBP/JPY cross maintained its strong bid tone near the highest level since May 2018, with bulls awaiting a sustained move beyond the key 150.00 psychological mark. A combination of supporting factors assisted the cross to build on the previous day's positive move and gain strong follow-through traction on Wednesday. The British pound remained well supported by the impressive pace of COVID-19 vaccinations in Britain and the UK government's plan to ease current lockdown measures. In fact, UK Prime Minister Boris Johnson unveiled a new four-step plan to end restrictions by 21 June and lifted hopes for a relatively stronger UK economic recovery. The optimism was further fueled by Tuesday's upbeat UK employment details, which showed that the number of people claiming unemployment-related benefits unexpectedly dropped by 20K in January. Adding to this, the previous month's reading was also revised down to -20.4K from the 7K rise reported earlier. The developments further diminished odds for any further interest rate cuts by the Bank of England, which further underpinned the sterling and remained supportive of the GBP/JPY pair's momentum. Meanwhile, the progress on US President Joe Biden's proposed $1.9 trillion stimulus package has been fueling the optimism about a swift global economic recovery. This, in turn, undermined demand for the safe-haven Japanese yen and provided an additional boost to the GBP/JPY cross. The market focus now shifts to a scheduled speech by the BoE Chief Economist Andy Haldane. Later during the early North American session, the BoE Governor Andrew Bailey and other MPC members will testify before the Treasury Select Committee, which might influence the GBP and produce some trading opportunities. Technical levels to watch  

Gold struggled to preserve its intraday gains and retreated to the lower end of its daily trading range, around the $1805 region during the early Euro

Gold failed to capitalize on its intraday positive move back closer to Tuesday’s one-week tops.Sliding US bond yields undermined the USD and provided a modest intraday lift to the metal.Optimism over a strong global economic recovery capped any further gains for the XAU/USD.Gold struggled to preserve its intraday gains and retreated to the lower end of its daily trading range, around the $1805 region during the early European session. The precious metal gained some traction during the first half of the trading action on Wednesday and built on the overnight bounce from the sub-$1800 level. The treasury yields witnessed a modest pullback after Fed Chair Jerome Powell on Tuesday reiterated a very dovish policy stance, saying that interest rates will remain low and the Fed will keep buying bonds to support the US economic recovery. Sliding US bond yields kept the US dollar bulls on the defensive, which, in turn, was seen as a key factor that provided a modest lift to the non-yielding yellow metal. Apart from this, a softer tone around the equity markets further benefitted the safe-haven XAU/USD and remained supportive of the uptick. That said, the optimistic global economic outlook capped the upside for the precious metal. The impressive pace of vaccinations for the highly contagious coronavirus disease, along with the prospects for a massive US fiscal spending plan has been fueling hopes for a strong global economic recovery from the pandemic. In the latest development, House Majority Leader Steny Hoyer said that a vote on the US President Joe Biden's proposed $1.9 trillion stimulus package will be held on Friday. This makes it prudent to wait for some strong follow-through buying beyond the overnight swing highs, around the $1816 region before positioning for any further appreciating move. The next relevant resistance is pegged near the $1823-25 region ahead of the $1835 level, which if cleared decisively will be seen as a fresh trigger for bullish traders and set the stage for additional gains. Technical levels to watch  

ETF purchases not significantly crippling market functions. Do not think ETF purchases cause serious corporate governance problems. Aware of the view

ETF purchases not significantly crippling market functions. Do not think ETF purchases cause serious corporate governance problems. Aware of the view that ETF purchases may lead to a decline in stock market function.   developing story ...

Austria Purchasing Manager Index increased to 58.3 in February from previous 54.2

Switzerland ZEW Survey – Expectations rose from previous 43.2 to 55.5 in February

EUR/USD has failed to take advantage of Fed Chair Powell's dovish words. A delay in vaccine deliveries to Europe and an extended German lockdown may w

EUR/USD has failed to take advantage of Fed Chair Powell's dovish words. A delay in vaccine deliveries to Europe and an extended German lockdown may weigh on the euro, according to FXStreet Analyst Yohay Elam. Key quotes “Powell could not have been more dovish. He said that any uptick in prices in the coming months is unlikely to be large or persistent and also dismissed fears that fiscal largesse would prompt inflation. The Fed is there to keep rates low and printing money as much as needed.  At least for the greenback, creating funds out of thin air means devaluation and the dollar indeed retreated across the board.” “Europe has been lagging behind in its vaccination efforts and another blow has come from AstraZeneca. The British-Swedish firm told the EU that it will deliver only 90 million doses in the second quarter – half the original estimate.”  “The old continent immunization gap has significant economic implications. Germany is mulling an exit strategy from current restrictions and that will likely be delayed.” “Support awaits at the daily low of 1.2140, followed by critical support at 1.2110. That is where the 200 SMA hits the price and nearly converges with the 50 SMA.” “Some resistance is at 1.2166, the daily high, and then at 1.2180, the weekly high.”  

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades slightly into the negative territory and close to t

DXY remains under mild downside pressure near 90.00.Chief Powell reiterated the Fed’s ultra-accommodative stance.Second testimony by Powell, Fedspeak, housing data next on tap.The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades slightly into the negative territory and close to the key support at the 90.00 mark on Wednesday. US Dollar Index appears weak post-Powell The index looks somewhat stabilized in the lower bound of the recent range and trades at shouting distance from the psychological 90.00 support, area coincident with the key 2020-2021 support line and considered the last defence for a potential visit to the YTD lows around 89.20. The sentiment around the dollar remains depressed amidst omnipresent stimulus talk and prospects of the strong global recovery. In addition, Chief Powell has practically ruled out any modification of the ongoing asset-purchase programme or monetary stance in the foreseeable future at his appearance before the Congress to deliver the Semiannual Monetary Policy Report on Tuesday. Later in the NA session, Powell will testify once again although this time before the House Financial Services Committee. In addition, FOMC’s L.Brainard (permanent voter, dovish) is due to speak, while Vice Chair R.Clarida (permanent voter, dovish) will speak on “US Monetary Outlook and Monetary Policy”. In the data space, MBA’s Mortgage Applications, New Home Sales and the EIA’s report on crude oil supplies are all due later. What to look for around USD The index flirts with the key 90.00 support, as the selling bias around the dollar has accelerated as of late. In the meantime, bullish attempts in the buck should remain short-lived amidst the broad-based fragile outlook for the currency in the medium/longer-term. The latter is propped up by the reinforced mega-accommodative stance from the Fed, persistent chatter of extra fiscal stimulus and prospects of a strong recovery in the global economy, which are all seen underpinning the better sentiment in the risk complex.Key events in the US this week: Second testimony by Chief Powell in Capitol Hill (Wednesday), another revision of Q4 GDP and Initial Claims (Thursday) and inflation figures gauged by the PCE and the final Consumer Sentiment measure (Friday).Eminent issues on the back boiler: US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? Future of the Republican party post-Trump acquittal. US Dollar Index relevant levels At the moment, the index is losing 0.15% at 90.03 and faces the next support at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and finally 88.25 (2018 low Feb.16). On the flip side, a breakout of 91.05 (weekly high Feb.17) would open the door to 91.38 (100-day SMA) and finally 91.60 (2021 high Feb.5).

The USD/CAD pair remained depressed through the early European session and was last seen hovering around the 1.2575 region, just above 34-month lows s

USD/CAD edged lower for the fifth consecutive session on Wednesday.A combination of factors extended some support and helped limit losses.The USD/CAD pair remained depressed through the early European session and was last seen hovering around the 1.2575 region, just above 34-month lows set earlier this Wednesday. The pair extended its recent rejection slide from 50-day SMA and edged lower for the fifth consecutive session. The attempted intraday recovery quickly ran out of the steam near the 1.2600 round-figure mark amid the emergence of some fresh selling around the US dollar. A modest pullback in the US Treasury bond yields failed to assist the greenback to capitalize on the previous day's goodish rebound from six-week lows. The treasury yields were dragged down by Fed Chair Jerome Powell's dovish remarks during the congressional testimony. That said, the progress on US President Joe Biden's proposed $1.9 trillion stimulus package helped limit the downside for the US bond yields. Apart from this, a softer risk tone benefitted the greenback's relative safe-haven status and extended some support to the USD/CAD pair. On the other hand, retreating crude oil prices undermined the commodity-linked loonie and held bearish traders from placing fresh bets around the USD/CAD pair. Oil prices fell on Wednesday after the American Petroleum Institute (API) reported a surprise build in US crude stocks last week. Meanwhile, the USD/CAD pair's inability to register any meaningful recovery suggests that the near-term bearish trend might still be far from being over. Hence, any meaningful recovery attempted might still be seen as a selling opportunity and runs the risk of fizzling out quickly. There isn't any major market-moving economic data due for release on Wednesday, either from the US or Canada. Hence, the key focus will remain on Powell's second day of the semi-annual testimony before the US Congress, which might influence the USD and provide some impetus to the USD/CAD pair. Technical levels to watch  

The kiwi has continued to strengthen following the RBNZ’s latest policy meeting where the Reserve Bank of New Zealand acknowledged stronger growth but

The kiwi has continued to strengthen following the RBNZ’s latest policy meeting where the Reserve Bank of New Zealand acknowledged stronger growth but said that loose policy is to stay. NZD/USD rose to fresh highs, hitting an intra-day high of 0.7384 which is within touching distance of the high from April 2018 at 0.7395, economists at MUFG Bank inform. Key quotes “The kiwi has derived some support from the RBNZ’s more upbeat economic outlook although they have stressed that they will maintain loose policy for longer. The RBNZ now views risks to the economic outlook as ‘balanced’ rather than ‘less skewed to the downside’. The RBNZ still sees one more quarter of GDP contraction in Q1 before the economy recovers more sustainably. The GDP forecast for this year was lifted to 4.0% up from 3.6%.” “The more upbeat economic outlook prompted the RBNZ to drop the policy signal that ‘further monetary stimulus may be needed’ although they did maintain they are prepared to provide additional stimulus if necessary.” “While we believe that the RBNZ is unlikely to lower rates further, the RBNZ has emphasized that stimulative settings will be maintained for a prolonged period of time, until it is confident of employment reaching the maximum sustainable level and inflation is sustainably around 2%.”  “The RBNZ has acknowledged the stronger than expected economic recovery in New Zealand but is reluctant to bring forward plans for monetary tightening at the current juncture.” “The RBNZ are understandably cautious that laying out plans to tighten policy well ahead of other major central banks would encourage an even stronger kiwi. The fundamentals though still point to further strength which the RBNZ can only dampen.”  

According to FX Strategists at UOB Group, there is still scope for USD/JPY to re-test the 104.40 region in the near-term. Key Quotes 24-hour view: “Ou

According to FX Strategists at UOB Group, there is still scope for USD/JPY to re-test the 104.40 region in the near-term. Key Quotes 24-hour view: “Our expectation for USD to ‘weaken further’ did not materialize as it rebounded strongly after touching 104.91. Downside risk has more or less dissipated and the current movement is viewed as part of a consolidation. For today, USD is likely to trade within a 105.00/ 105.50 range.” Next 1-3 weeks: “We have held a positive view in USD since early last week. After USD retreated after touching 106.21, we cautioned yesterday (22 Feb, spot at 105.50) that ‘upward momentum has waned quickly’ and ‘prospect for further USD strength has diminished considerably’. The positive phase came to an end as USD took out our ‘strong support’ level at 105.00 yesterday (low of 104.97) The current movement is viewed as a pullback that has scope to test month-to-date low at 104.40. At this stage, the prospect for a sustained decline below this level is not high. On the upside, a break of the ‘strong resistance’ at 105.65 would indicate the current downward pressure has eased.”

Sustainable funds outperformed traditional peer funds and reduced investment risk during coronavirus in 2020, according to the Morgan Stanley Institut

Sustainable funds outperformed traditional peer funds and reduced investment risk during coronavirus in 2020, according to the Morgan Stanley Institute for Sustainable Investing. Key quotes “An analysis of more than 3,000 US mutual funds and exchange-traded funds (ETFs) shows that sustainable equity funds outperformed their traditional peer funds by a median total return of 4.3% in 2020. During the same period, sustainable taxable bond funds beat their non-ESG counterparts by a median total return of 0.9%.” “Sustainable US equity and taxable bond funds also proved less risky than their traditional counterparts in 2020. US sustainable equity funds’ median downside deviation was 3.1% less than traditional peer funds, and 0.4% less for US sustainable bond funds, compared to their non-ESG counterparts.” “For the full-year 2019, sustainable equity funds outpaced traditional peer funds by a median of 2.8%, while sustainable taxable bond funds outperformed their traditional peer funds by a median of 0.8%.”  “In any given year from 2004 through 2018, sustainable funds' median total returns were in line with that of traditional counterparts and provided more downside risk protection, especially during periods of increased market volatility, according to an Institute report issued in 2019.”

A big move has been seen in the pound, with the EUR/GBP pair eroding the 2016-2021 uptrend at 0.8591. A second daily close below this level would open

A big move has been seen in the pound, with the EUR/GBP pair eroding the 2016-2021 uptrend at 0.8591. A second daily close below this level would open the path towards the 0.8465 May 2019 low, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, briefs. Key quotes “EUR/GBP has again sold off and has now eroded the 2016-2021 uptrend at 0.8591, we will need a second close below here to confirm the break but this will then target the 0.8465 May 2019 low.”  “Initial resistance is the accelerated downtrend at 0.8695 and this is the minimum that needs to be overcome to alleviate downside immediate pressure. Above here lies 0.8864/61 (lows seen in June, September and November) while capped here overall attention will remain on the downside.”  

GBP/USD is consolidating the vertical rise to 35-month highs of 1.4234, as the bulls are lacking follow though impetus after failing to recapture the

GBP/USD consolidates the spike to multi-month tops of 1.4234.Overbought conditions on daily RSI are a cause for concern.The cable could correct before resuming the uptrend towards 1.43.GBP/USD is consolidating the vertical rise to 35-month highs of 1.4234, as the bulls are lacking follow though impetus after failing to recapture the 1.4200 level. At the press time, the cable trades at 1.4175, adding 0.49% on the day. The spot moves away from the higher levels despite the renewed weakness in the US dollar across the board. Therefore, the cautious tone seen around the major could be mainly attributed to the overbought conditions on the Relative Strength Index (RSI), given the daily timeframe. The bulls are now contemplating the next move, with the 1.4300 level still on sight. Although a correction could be in the offing before the cable takes a flight once again northwards. To the downside, the bears have to beat the daily lows of 1.4106, in order to extend the corrective downside. GBP/USD: Daily chart GBP/USD: Additional levels  

The AUD/USD pair eased on Tuesday but still held above the 0.7900 mark, leaving the positive momentum intact. Terence Wu, FX Strategist at OCBC Bank,

The AUD/USD pair eased on Tuesday but still held above the 0.7900 mark, leaving the positive momentum intact. Terence Wu, FX Strategist at OCBC Bank, still believes the aussie is set to move higher towards the 0.80-0.81 neighborhood. Key quotes “The ability to hold above the 0.7900 support will give further hopes for the AUD/USD bulls, with another spike higher early Wednesday taking the pair towards 0.7950.  “Domestic data also supports, with wages rising faster than expected on a YoY basis.”  “Note that the recent rise is well-supported by higher short-term implied valuations.”  “Maintain the view for an extension towards 0.8000-0.81000 levels for now, against intraday support at 0.7900.”  

The USD/JPY pair maintained its bid tone through the early European session and was last seen trading near two-day tops, around mid-105.00s. The pair

USD/JPY gained positive traction for the second consecutive session on Wednesday.The uptick seemed rather unaffected by retreating US bond yields and weaker USD.Even a softer risk tone failed to benefit the safe-haven JPY or hinder the momentum.The USD/JPY pair maintained its bid tone through the early European session and was last seen trading near two-day tops, around mid-105.00s. The pair built on the previous day's goodish rebound from levels below the key 105.00 psychological mark and gained positive traction for the second consecutive session on Wednesday. The uptick lacked any obvious fundamental catalyst and even seemed rather unaffected by a combination of negative factors. During the first day of his semi-annual testimony before the Congress, Fed Chair Jerome Powell on Tuesday reiterated a very dovish policy stance and led to a modest pullback in the US Treasury bond yields. Powell said that interest rates will remain low and the Fed will keep buying bonds to support the US economic recovery. Retreating US bond yields kept the US dollar bulls on the defensive through the first half of the trading action on Wednesday, albeit did little to hinder the USD/JPY pair's intraday positive move. Bulls even shrugged off a softer tone around the equity markets, which tends to benefit the safe-haven Japanese yen. Meanwhile, the impressive pace of COVID-19 vaccinations and the progress on a massive US fiscal spending plan continued fueling hopes for a strong global economic recovery.  In fact, House Majority Leader Steny Hoyer said that a vote on US President Joe Biden's proposed $1.9 trillion stimulus package will be held on Friday. This seemed to be the only factor driving the USD/JPY pair higher, though the upside is likely to remain capped amid absent relevant market-moving economic releases. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move, back towards the 106.00 round-figure mark. Technical levels to watch  

USD/CAD’s inability to surmount a resistance window 1.2899-1.2952 has led to USD bears reasserting control. A downward thrust under 1.2517 should enha

USD/CAD’s inability to surmount a resistance window 1.2899-1.2952 has led to USD bears reasserting control. A downward thrust under 1.2517 should enhance bearishness, Benjamin Wong, Strategist at DBS bank, reports. Key quotes “1.2899 offers resistance of sorts. Together with 1.2952, they are levels to cross if USD aspires to turn around the bearish outlook since it topped out at 1.4668 last March. Against the current levels, the resistance is coming lower at 1.2672 and 1.2746.” “A downward thrust well under 1.2517 is all the market needs to reassert a stronger dose of USD weakness in order for the next Fibonacci marker at 1.2385 to be probed and to be en route through the 100-month moving average of 1.2471.”  

France Business Climate in Manufacturing below forecasts (99) in February: Actual (97)

Here is what you need to know on Wednesday, February 24: The market mood is mixed on Wednesday after a turbulent Tuesday – the Fed's Powell soothed ma

Here is what you need to know on Wednesday, February 24:  The market mood is mixed on Wednesday after a turbulent Tuesday – the Fed's Powell soothed markets by promising support, weighing on yields and the dollar. Bitcoin's whipsaw continues, a delay in Europe's vaccines, another appearance by Powell and fiscal stimulus talks are eyed. Federal Reserve Chair Jerome Powell told Congress that the outlook has improved but there is still a long road to recovery. He reiterated that any rise in inflation will likely be transitory and that the Fed has tools to deal with it. On fiscal stimulus, Powell said that he does not see how a burst in spending would lead to higher inflation.  His words sent stocks bouncing from the abyss, with the S&P 500 closing higher on the day. The benchmark ten-year bond yields retreated from 1.40% and pushed the dollar further down. Powell returns to Capitol Hill on Wednesday. Lael Brainard and Richard of the Fed will also be speaking.  See Dollar tumbles as Powell says no rate hike, no taperFiscal stimulus: Democrats are set to bring President Joe Biden's $1.9 trillion stimulus plan to vote in the House on Friday, a significant step forward. Bitcoin is changing hands around $50,000 after a whipsaw earlier this week. The cryptocurrency's decline from the highs decreased the fortunes of Tesla founder Elon Musk. Ark Investment Management's Cathie Wood noted that they fall to $46,000 is a healthy correction.  More Cryptocurrencies Price Prediction: Cardano, Ethereum & Dogecoin – Asian Wrap 24 FebGBP/USD stands out with a surge above 1.42, buoyed by dollar weakness and also speculation that the Bank of England would raise rates sooner rather than later. BOE Governor Andrew Bailey and several of his colleagues will speak on Wednesday. Moreover, the British media reports that the UK may exit the lockdown sooner than the current end date of June 21. EUR/USD has been lagging behind its peers, partially due to prospects of extended lockdown measures in Germany and AstraZeneca's announcement of yet another cut in AstraZeneca's delivery of vaccines to the old continent. The firm slashed by half its provisions for the second quarter, from 180 to 90 million doses. NZD/USD advanced above 0.7350 after the Reserve Bank of New Zealand left its rates unchanged as expected. Governor Adrian Orr noted that the kiwi would be higher if not for the RBNZ's actions.  More  Five factors moving the US dollar in 2021 and not necessarily to the downside    

Economists at Credit Suisse tweak the USD/RUB short-term target range lower to 72.00-76.00 (from 73.00-77.00). The agreement of EU foreign ministers o

Economists at Credit Suisse tweak the USD/RUB short-term target range lower to 72.00-76.00 (from 73.00-77.00). The agreement of EU foreign ministers on a relatively soft set of sanctions to be imposed on Russia paves the way for some catch-up of the rouble to the recent rally in oil prices and a potential break below 73.00. But investor-concerns about the likelihood that the US will also impose sanctions on Russia and rising US real rates will keep USD/RUB in a range for now. Key quotes “We lower our USD/RUB target range slightly to 72.00-76.00 from 73.00-77.00 after holding the latter target range since 27 January. A break below 73.00 – which has served as a support level in recent weeks – is becoming increasingly likely.” “Recent developments on the international front have been encouraging from the perspective of holders of long rouble positions. On Monday, the EU-countries’ foreign ministers agreed to push for relatively mild sanctions to be imposed on Russia for Navalny’s imprisonment. We suspect that this development paves way for some catch-up of the rouble to the recent rally in oil prices. The central bank’s shift to a hawkish stance at its meeting on 12 February also helps increase the chance of rouble appreciation.” “We refrain from lowering the top end of our USD/RUB target range to levels below 76.00 for two reasons: Markets will likely remain concerned about the possibility of future tension between the US and Russia as US officials noted over the weekend that US action against Russia is expected in the coming weeks; and the rise in US real rates has a potential to continue to impact markets’ appetite to EM assets adversely. Ultimately, a break below or above our new target range will require clarity about the US sanctions risks.”  

The market has seen a big move in the Swiss franc as the USD/CHF pair has rallied sharply higher towards the 0.9092 downtrend. Karen Jones, Team Head

The market has seen a big move in the Swiss franc as the USD/CHF pair has rallied sharply higher towards the 0.9092 downtrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects this level to hold the first test though upside risks are growing. Key quotes “USD/CHF has rallied sharply higher towards the 0.9092 downtrend, this should hold the initial test, but it should be noted that upside risks are growing (we note the strong buy signal on the DMI).  “The market will need to slide back below 0.9000 to alleviate immediate upside pressure however and cast attention back towards 0.8900 the 55-day ma and 0.8868/72 which guards 0.8839/23, the 22nd January low and the 18th December low.”  “Only failure at 0.8823 will trigger a retest of the 0.8758 recent low. Below 0.8758 would target 0.8703/0.8698, the 2014 lows.”  

The NZD/USD pair consolidated the post-RBNZ strength to fresh 34-month tops and was seen oscillating in a range around the 0.7370-75 region. The pair

NZD/USD gained positive traction for the fifth consecutive session on Wednesday.The kiwi got a lift after RBNZ maintained status-quo and led interest rates unchanged.Retreating US bond yields undermined the USD and provided an additional boost.The NZD/USD pair consolidated the post-RBNZ strength to fresh 34-month tops and was seen oscillating in a range around the 0.7370-75 region. The pair built on its recent positive momentum and gained some follow-through traction for the fifth consecutive session on Wednesday. The kiwi got a goodish lift after the Reserve Bank of New Zealand(RBNZ), as was expected, held its official cash rate at a record low of 0.25% The RBNZ also retained its large scale asset purchase (LSAP) programme at NZ$100 billion and showed no rush to remove monetary stimulus. In the accompanying policy statement, the central bank said that monetary stimulus remains necessary to meet its inflation and employment targets. Apart from this, the emergence of some fresh selling around the US dollar provided an additional boost to the NZD/USD pair. The greenback was pressured by a modest pullback in the US Treasury bond yields in reaction to the dovish sounding comments by the Fed Chair Jerome Powell on Tuesday. During the first day of his semi-annual testimony before the Congress, Powell reiterated that interest rates will remain low and the Fed will keep buying bonds to support the US economic recovery. The US bond yields were further dragged by a softer risk tone surrounding the equity markets. However, slightly overbought conditions on intraday charts held traders from placing fresh bullish bets and kept a lid on any further gains for the NZD/USD pair. That said, the near-term bias remains tilted firmly in favour of bullish traders and supports prospects for additional gains. Market participants now look forward to Powell's second day of congressional testimony, which will play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment, might produce some short-term trading opportunities around the NZD/USD pair. Technical levels to watch  

China looks forward to working with US colleagues to focus on cooperation and manage differences Foreign Ministry’s outlook remains grim and complex t

China looks forward to working with US colleagues to focus on cooperation and manage differences Foreign Ministry’s outlook remains grim and complex this year due to uncertainties from covid-19 and supply and industrial chains. We will reinforce policy support for foreign trade. We will ensure smooth operations of supply chains.   developing story ....

A goodish USD rebound and an uptick in the US bond yields prompted some selling around gold on Tuesday. The yellow metal was last seen trading around

A goodish USD rebound and an uptick in the US bond yields prompted some selling around gold on Tuesday. The yellow metal was last seen trading around the $1810 region as bulls are trying to seize control but optimism is capping gains for XAU/USD, FXStreet’s Haresh Menghani briefs. See – Gold Price Analysis: XAU/USD sees strong support around $1765 – Standard Chartered Key quotes “The key focus will remain on Powell's second day of testimony to the Senate Banking Committee. This will play a key role in influencing the USD and produce some meaningful trading opportunities around the XAU/USD.” “Technical indicators on the daily chart are yet to confirm a bullish bias and warrant caution before positioning aggressively for any further positive move. Hence, any subsequent strength is likely to confront resistance near the $1823-25 horizontal zone. This is followed by the 38.2% Fibo. level, around the $1835 region, which if cleared will set the stage for additional gains.” “Some follow-through selling below the overnight swing lows, around the $1795 region, will negate the constructive outlook and turn the XAU/USD vulnerable. The commodity might then accelerate the slide towards the $1775-72 intermediate support en-route the $1760 region, or seven-month lows touched last Friday.”

CME Group’s flash data for crude oil futures markets noted open interest shrunk for the third consecutive session on Tuesday, now by nearly 4K contrac

CME Group’s flash data for crude oil futures markets noted open interest shrunk for the third consecutive session on Tuesday, now by nearly 4K contracts. Volume followed suit and dropped by around 25.1K contracts, adding to Monday’s sharp pullback. WTI still focused on $65.00 Tuesday’s corrective downside in prices of the WTI came after hitting fresh 2021 highs beyond the $62.00 mark and amidst diminishing open interest and volume. That said, crude oil could see some consolidation/correction in the very near-term before the resumption of the ongoing uptrend. Against this, the next target remains at the 2020 high around $65.60 per barrel.  

Traders scaled back their open interest positions in natural gas futures markets for the fourth straight session on Tuesday, now by around 10.6K contr

Traders scaled back their open interest positions in natural gas futures markets for the fourth straight session on Tuesday, now by around 10.6K contracts in light of advanced prints from CME Group. In the same direction, volume resumed the downside and shrunk by nearly 27.5K contracts. Natural Gas:  Support emerges around $2.70/MMBtuNatural gas prices extended the decline on Tuesday, although the move was in tandem with diminishing open interest and volume. While a rebound look likely in the very near-term, the commodity could re-test early February lows in the $2.70 per MMBtu.  

AUD/USD is seen climbing to the 0.7960 region in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday

AUD/USD is seen climbing to the 0.7960 region in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘while conditions remain overbought, there is room for AUD to stage another push higher even though the major resistance at 0.7960 is likely out of reach’. We added, ‘there is another resistance at 0.7940’. AUD subsequently rose to 0.7935. Conditions remain overbought but there is still chance for AUD to test 0.7940. The major resistance at 0.7960 is likely out of reach. On the downside, a break of 0.7870 would indicate the current upward pressure has eased (minor support is at 0.7885).” Next 1-3 weeks: “We have held a positive view in AUD for more than 2 weeks now. In our latest narrative from Monday (22 Feb, spot at 0.7885), we noted that ‘strong boost in momentum suggests further AUD strength’ and that ‘the next resistance is at 0.7960’. There is no change in our view for now even though overbought shorter-term conditions could slow the pace of any further advance. Looking ahead, the next resistance above 0.7960 is at 0.8000. On the downside, a break 0.7825 (no change in ‘strong support’ level) would indicate that the positive phase in AUD has run its course.”

Denmark Retail Sales (YoY) fell from previous 1% to -7.6% in January

Germany Gross Domestic Product (YoY) registered at -3.7% above expectations (-3.9%) in 4Q

Germany Gross Domestic Product w.d.a (YoY) registered at -2.7% above expectations (-2.9%) in 4Q

Germany Gross Domestic Product (QoQ) registered at 0.3% above expectations (0.1%) in 4Q

AUD/USD consolidates its retreat from three-year highs of 0.7945, having reversed most gains, as the turnaround in the risk sentiment lifted the haven

AUD/USD turns south in tandem with S&P 500 futures.RBA Harper’s exchange rate comments also weigh on the aussie. Dovish Fed’s Powell fails to keep the bulls supported.AUD/USD consolidates its retreat from three-year highs of 0.7945, having reversed most gains, as the turnaround in the risk sentiment lifted the haven demand for the US dollar. At the time of writing, the aussie trades at 0.7912, up 0.05% on a daily basis, defending the 0.7900 as we head towards the European opening.  The worsening of the market mood, as markets weighed in the risks of rising inflation worldwide. The greenback finds its feet across its main peers while the S&P 500 futures drop 0.50% to near 3,860 levels. Adding to the weight on the aussie, the Reserve Bank of Australia (RBA) board member Ian Harper expressed his concerns on the appreciation of the Australian dollar. Harper said, “even with Australia’s borders closed for almost a year now, shutting down the country’s top services exports of international education and tourism, currency appreciation is still a worry.” The downside in the spot, however, remains cushioned by the NZD/USD rally to multi-month highs, fuelled by the Reserve Bank of New Zealand’s (RBNZ) hinted towards tightening after lifted its forecast for the unconstrained OCR. Commodities hold their recent advance, which also lends support to the resource-linked aussie, as investors pay a little heed to the mixed Australian wages and construction output data. Meanwhile, the US dollar is attempting a tepid bounce from the Fed Chief Powell’s dovish blow. Powell highlighted, in his Tuesday’s testimony, the economic recovery remains uneven and reiterated the need to maintain an accommodative monetary policy stance unless its employment and inflation goals are met. In the day ahead, round 2 of Powell’s testimony will be closely eyed alongside a slew of Fedspeak, as the US docket remains scarce on the data front. AUD/USD: Technical outlook “Counter-trend traders eye further consolidation of the latest gains towards 0.7815-20 horizontal area, comprising highs marked in early 2018 and during the last month. Meanwhile, bulls need to reject the downtrend suggesting candlestick formation by a daily closing above 0.7940 to keep the reins. Following that, February 2018 peak surrounding 0.7990 can test the run-up targeting the 0.8000 threshold, FXStreet’s Analyst Anil Panchal notes. AUD/USD additional levels 

Open interest in gold futures markets extended the downtrend for yet another session on Tuesday, this time by nearly 9K contracts according to prelimi

Open interest in gold futures markets extended the downtrend for yet another session on Tuesday, this time by nearly 9K contracts according to preliminary data from CME Group. In the same line, volume retreated for the second session in a row, now by more than 31K contracts. Gold now looks to $1,850 Tuesday’s negative performance in gold prices was on the back of shrinking open interest and volume, leaving further decline not favoured in the very near-term. On the upside, the next hurdle emerges at the $1,850 mark per ounce.  

The recent strong performance in the British pound could lift Cable to the 1.4300 level and above, in opinion of FX Strategists at UOB Group. Key Quot

The recent strong performance in the British pound could lift Cable to the 1.4300 level and above, in opinion of FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘overbought advance in GBP could test 1.4100 first before a pullback can be expected’. We added, GBP ‘is not expected to challenge the next resistance at 1.4150’. GBP subsequently rose to 1.4117 before closing at 1.4112. GBP soared during early Asian hours and has just breached 1.4150. While further advance is not ruled out, the rapid rise appears to be overdone and the next major resistance at 1.4300 is unlikely to come into the picture. Support is at 1.4120 followed by 1.4070.” Next 1-3 weeks: “We have held a positive view in GBP for more than 2 weeks now. In our latest update from Monday (22 Feb, spot at 1.4030), we indicated that ‘upward momentum remains strong and GBP could advance further to 1.4100’. We added, ‘a clear break of 1.4100 would shift the focus to 1.4150’. We did not anticipate the sudden surge in GBP as it just breached 1.4150 during Asian hours and the focus has shifted to 1.4300 followed by the 2018 high of 1.4377. On the downside, a break of 1.4020 (‘strong support’ level was at 1.3940 yesterday) would indicate that the positive phase in GBP has run its course.”

UOB Group’s FX Strategists believe EUR/USD could trade within the 1.2050-1.2200 range in the next weeks. Key Quotes 24-hour view: “Yesterday, we held

UOB Group’s FX Strategists believe EUR/USD could trade within the 1.2050-1.2200 range in the next weeks. Key Quotes 24-hour view: “Yesterday, we held the view that ‘further EUR gains appear likely but overbought conditions could ‘limit’ gains to 1.2200’. The subsequent advance fell short of our expectation as EUR eased off after touching 1.2179. Upward momentum has waned and for today, EUR is likely to trade sideways, expected to be between 1.3125 and 1.2180.” Next 1-3 weeks: “There is not much to add to our update from yesterday (22 Feb, spot at 1.2125). As highlighted, the outlook is mixed and EUR could trade between 1.2050 and 1.2200 for a period of time. Shorter-term upward momentum has improved somewhat but EUR has to close above 1.2200 before a sustained advance can be expected (next resistance is at 1.2230). At this stage, the prospect for such a scenario is not high but it would remain intact as long as 1.2080 is not taken out within these few days.”

USD/INR licks its wounds around 72.35 after bouncing off 72.31, the lowest in 11 months, during the initial Indian session on Wednesday. In doing so,

USD/INR drops for the sixth consecutive day while refreshing the lowest since March 2020.Risk reversals suggest a lack of bearish bias.RBI Governor says inflation targeting coming “very very” soon.Bulls eye US dollar recovery for fresh run-up, Powell’s testimony 2.0, stimulus awaited.USD/INR licks its wounds around 72.35 after bouncing off 72.31, the lowest in 11 months, during the initial Indian session on Wednesday. In doing so, the Indian rupee pair favors the bears for the sixth day even as the US dollar extends the previous day’s corrective pullback. Also challenging the quote’s further weakness is the one-month ratio of calls to puts, known as risk-reversal. Risk reversals traded at +0.0025  in favor of calls or bullish bets during the early Wednesday, the one-week high, according to data provided by Reuters. The positive reading indicates call options are drawing higher premium (option price) than put or bearish bets. In other words, the options market is most bullish in a week despite the latest weakness in the quote. It should be noted that the recent comments from RBI Governor Shaktikanta Das also raise doubts on the further downside of USD/INR. In his interview with CNBC, the RBI Chief said, “Inflation targeting report should be out very very shortly in next few days.” The halt in the rally of the global treasury yields as well as hopes of US stimulus to be discussed this week also likely to challenge the USD/INR south-run. Hence, traders should keep their eyes on further developments that can extend the US dollar’s latest recovery moves. That said, the US dollar index (DXY) picks up bids near 90.13 after bouncing off the six-week low of 89.94 the previous day. Technical analysis Unless providing a daily closing beyond 72.76, comprising September 2020 low, USD/INR bulls should remain cautious.  

EUR/GBP wavers around 0.8580, currently down 0.30% to 0.8581, ahead of Wednesday’s European session. In doing so, the quote battles an upward sloping

EUR/GBP fades corrective pullback from one-year low, range-bound recently.Sustained break of key SMA on weekly chart joins bearish MACD to back the bears.57-month-old support line offers extra filters to the south.EUR/GBP wavers around 0.8580, currently down 0.30% to 0.8581, ahead of Wednesday’s European session. In doing so, the quote battles an upward sloping trend line from November 2015. The sterling cross recently dropped to the fresh low since February 2020 before bouncing off 0.8539. Although oversold RSI conditions suggest corrective pullback on the daily chart, the weekly formation below 100 and 200-week SMA, amid bearish MACD, signal further downside of the EUR/GBP prices. Hence a clear break of 0.8590 becomes necessary for the pair to extend the latest downward trajectory towards another support line from May 2016, at 0.8482 now. In a case where EUR/GBP bears refrain from stepping back near 0.8480, the year 2019 low near 0.8275 will be in the spotlight. On the upside, recovery moves are less likely to be considered strong unless witnessing a weekly closing beyond the key SMA convergence near 0.8840-45. Overall, EUR/GBP has room for further downside despite uninterrupted declines since February 12. EUR/GBP weekly chart Trend: Bearish  

FX option expiries for Feb 24 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2100 919m 1.2130 903m 1.2150 733m

FX option expiries for Feb 24 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2100 919m 1.2130 903m 1.2150 733m 1.2175 756m 1.2180 558m - GBP/USD: GBP amounts          1.4100 211m  - USD/JPY: USD amounts          104.10 556m 104.50 397m 105.00 1.7bn 105.25 355m 105.65 1.0bn 105.70 1.2bn 105.80 568m 105.95 373m - AUD/USD: AUD amounts 0.7850 529m 0.7865 701m 0.7875 696m 0.7910 1.2bn 0.7950 604m - USD/CAD: USD amounts        1.2700 1.1bn- EUR/GBP: EUR amounts 0.8650 534m

GBP/USD wavers around the mid-1.4100s, up 0.35% intraday, after stepping back from a brief rally to 1.4243 while heading into the London open on Wedne

GBP/USD trims pullback from fresh three-year high above 1.4200.Britain aims for faster vaccinations to regain economic traction before time.UK agrees to extend EU’s request to time for ratifying Brexit deal.AstraZeneca’s likely inability to keep EU vaccine delivery promises joins Powell’s effort to tame yields while testing bulls.GBP/USD wavers around the mid-1.4100s, up 0.35% intraday, after stepping back from a brief rally to 1.4243 while heading into the London open on Wednesday. Cable seems to benefit from the greenback weakness amid optimism at home. Also favoring the sterling bulls could be options that triggered a spike on the EUR/GBP. Though, Brexit chatters and cautious sentiment ahead of Powell’s second testimony session test the rally. Although broad US dollar weakness and the UK’s unlock announcements are favorable to the cable bulls, not to forget upbeat jobs report, chatters that Britain can regain traction on faster vaccination drive, shared via Telegraph, propelled the run-up to 34-month top. Also on the positive side could be the British readiness to offer the European Union (EU) time till April to ratify the Brexit deal. Furthermore, the UK’s jab count of 18 million and readiness to weigh vaccine passports, to not disappoint the travelers during festivals, offered extra strength to the GBP/USD prices. Meanwhile, AstraZeneca’s fear of not being able to perform on the EU’s contracted vaccine delivery join British scientists warning over UK PM Boris Johnson’s June deadline for total unlock to challenge the run-up. US central banker Powell’s readiness to tame the yields with prolonged easy money also tried to disappoint bulls, but couldn’t as the British jobs report painted a rosy picture. Against this backdrop, S&P 500 Futures remain mildly bid whereas global yields pause the latest rally. GBP/USD traders should keep their eyes on any major announcement to tame the bond coupons, less likely though, during Powell’s testimony 2.0. Also important will be how the bloc responds to AstraZeneca's note and UK’s help on Brexit as well as further unlock hints from the Tory government. Considering the recently improving fundamentals, Britain is up for recovery but not as fast as GBP/USD runs to the north. Technical analysis Sustained break of highs marked during March 2018, around 1.4245 becomes necessary to attack January 2018 tops and the yearly peak of 2018, respectively near 1.4345 and 1.4375. Meanwhile, pullback moves may eye the 1.4000 threshold but remain less strong above the three-week-old support line near 1.3950-45.  

Gold (XAU/USD) consolidates its overnight recovery above $1800, having capitalized on Fed Chair Jerome Powell’s dovish comments. Powell signaled Tuesd

Gold (XAU/USD) consolidates its overnight recovery above $1800, having capitalized on  Fed Chair Jerome Powell’s dovish comments. Powell signaled Tuesday the Fed was nowhere close to unwinding its easy policy amid uneven economic recovery. Gold bulls also weigh in the reports that the House will vote on the US stimulus bill this Friday, as the US Treasury yields correct further from yearly highs. Markets await the Day 2 of Powell’s testimony and a slew of Fedspeak for fresh directives. How is positioned on the technical charts? Gold Price Chart: Key resistances and supports The Technical Confluences Indicator shows that gold is likely to have a tough time taking on the upside, as a bunch of healthy resistance levels is stacked up. An immediate hurdle is seen at $1816, the previous day, above which the pivot point one-week R1 at $1818 could be tested. Further up, the confluence of the previous week high and pivot point one-day R2 at $1827 could be challenged. The next relevant barrier stands at $1840, the Fibonacci 23.6% one-month. On the flip side, the XAU bulls are battling a critical $1808 cushion, where the Fibonacci 61.8% one-day, SMA10 four-hour and previous low one-hour. Sellers would then target powerful support at $1803, the intersection of the previous month low and the Fibonacci 61.8% one-week. The previous day low at $1796 could test the bears’ commitments, below which a dense cluster of support levels around $1790/88 could be challenged. The last line of defense for the XAU bulls awaits at $1878, the pivot point one-month R1. Here is how it looks on the tool   About Confluence Detector The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

AUD/USD extends pullback from fresh 36-month high while declining to 0.7915 ahead of Wednesday’s European session. In doing so, the quote respects ove

AUD/USD refreshes the multi-month top before declining from 0.7945.Overbought RSI, bearish candlestick formation test further upside.Sellers target tops marked during April 2018 and January 2021.AUD/USD extends pullback from fresh 36-month high while declining to 0.7915 ahead of Wednesday’s European session. In doing so, the quote respects overbought RSI conditions and Doji candlestick formation flashed the previous day. As a result, counter-trend traders eye further consolidation of the latest gains towards 0.7815-20 horizontal area, comprising highs marked in early 2018 and during the last month. However, any further weakness will be challenged by a 10-day SMA and a three-week-old ascending trend line, respectively around 0.7820 and 0.7800. Meanwhile, bulls need to reject the downtrend suggesting candlestick formation by a daily closing above 0.7940 to keep the reins. Following that, February 2018 peak surrounding 0.7990 can test the run-up targeting the 0.8000 threshold. To sum up, AUD/USD is up for a brief pullback before marking further upside. AUD/USD daily chart Trend: Pullback expected  

EUR/USD lacks clear directional bias, with bulls refusing to step in despite dovish comments by Federal Reserve's chairman Powell. "The economic recov

EUR/USD trades flat near 1.2150, having faced rejection at 1.2180 on Tuesday. The pair trades well within Tuesday's indecisive range.Lagarde's comments keep the EUR bulls from cheering Powell's dovish comments.  EUR/USD lacks clear directional bias, with bulls refusing to step in despite dovish comments by Federal Reserve's chairman Powell.  "The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain," Powell said in written testimony to the Senate Banking Committee on Tuesday, contradicting widespread optimism that the economy will grow rapidly this year, leading to early Fed tightening.  So far, however, the dollar has remained resilient, keeping EUR/USD sidelined near 1.2150 and well within the range (high and low) of Tuesday's indecisive Doji candle.  According to BK Asset Management's Kathy Lien, the European Central Bank President Christine Lagarde's recent comments on rising bond yields are keeping EUR/USD from cheering Powell's dovish comments.  Lagarde said early this week that board members are "closely monitoring" rising sovereign bond yields, stoking fears of central bank intervention.  Lagarde's comments, coupled with Germany's slow vaccine delivery and continued stock market weakness, could continue to hamper EUR's progress.  The pair may find bids if the German data due at 07:00 GMT carries a big upward revision to the country's fourth-quarter gross domestic product (GDP) reading.  Later Wednesday, the focus would be on Powell's testimony and US housing data.  Technical levels  

Despite Fed Chair Jerome Powell’s ability to pause bond rally, Asia-Pacific shares fail to recover. The reason could be traced from the economic fears

Asian equities drift lower even global yields pause the latest north-run.Powell, RBNZ favored easy money policies but markets don’t leave behind reflation fears.Version 2.0 of Powell’s testimony will be the key amid a light calendar, US stimulus voting eyed.Despite Fed Chair Jerome Powell’s ability to pause bond rally, Asia-Pacific shares fail to recover. The reason could be traced from the economic fears and cautious sentiment ahead of the key events. Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops over 1.0% whereas Japan’s Nikkei 225 marks 0.95% intraday loss during early Wednesday. Australia’s ASX 200 fails to cheer upbeat Wage Price Index for the fourth-quarter (Q4), down -1.08% on a day, while joining hands with New Zealand’s NZX 50 that ignored the RBNZ’s readiness to keep pumping the economy to battle weak inflation and employment fears. Chinese bourses also flashed red as US President Joe Biden showed readiness to meddle the Canadian citizens’ evacuation from Beijing. Also weighing the mood could be Iran’s rejection of the American demand on the nuclear deal. Stocks in Hong Kong and South Korea track their Chinese counterparts but India’s BSE Sensex buck the trend with mild gains amid chatters over recovery in the virus conditions and political strength of the ruling party. Given the light calendar following crucial events, market sentiment has been dull and can be witnessed by small gains of S&P 500 Futures confronting US Treasury yields that drop around two basis points (bps) to stay sluggish around 1.34% by press time. Read: S&P 500 Futures eye to regain 3,900 after Fed’s Powell battled reflation fears As US policymakers hint at House voting on President Joe Biden’s $1.9 trillion covid stimulus bill, coupled with the pending version 2.0 of Powell’s testimony, traders may keep their eyes on the relating events amid an absence of major data/event. It should, however, be noted that the unlock news from Japan and AstraZeneca’s update of having 94% success in taming hospitalization seems to keep the buyers hopeful.

The gold price is likely to continue its upward trend through 2021 and could rally as high as $2,200 an ounce, Fahad Tariq, Precious Metals Analyst at

The gold price is likely to continue its upward trend through 2021 and could rally as high as $2,200 an ounce, Fahad Tariq, Precious Metals Analyst at Credit Suisse. Key quotes “Gold will be susceptible to Powell’s outlook on the economy and interest rates. He added that the rise in bond yields indicates that the market could be pricing in a rate hike as early as mid-2023.” “Gold could get a boost if Powell talks about the potential to implement a yield curve control program to cap rising bond yields.” “Overall, the real rate environment and Fed stance remain supportive of gold prices, but the key to watch will be if yields continue to rise and of course, if the US Fed does, in fact, change its dovish stance – we think this is unlikely based on recent commentary highlighting higher employment as the priority vs. preventing inflation.” Related readsGold Price Analysis: XAU/USD's upside capped buy 5-week SMAGold & silver technical analysis elliott wave [Video]

USD/JPY eases from intraday top of 105.50 to 105.45, up 0.18% intraday, during early Wednesday. In doing so, the yen pair keeps Tuesday’s recovery mov

USD/JPY extends previous day’s recovery moves from one-week low.50% Fibonacci retracement, falling trend line from February 17 offers extra hurdle.Easing RSI line, failures to cross strong resistances keep sellers hopeful.USD/JPY eases from intraday top of 105.50 to 105.45, up 0.18% intraday, during early Wednesday. In doing so, the yen pair keeps Tuesday’s recovery moves from the lowest since February 15 while struggling to overcome the confluence of 200 and 100-HMAs. Considering the nearly overbought RSI, stepping back recently, the yen pair may fail to cross the resistance confluence near 105.40-45. However, a convergence of a one-week-old descending trend line and 50% Fibonacci retracement of February 17-22 drop, near 105.60, will offer extra filters to the north. In a case where the USD/JPY bulls manage to cross 105.60, 61.8% Fibonacci retracement level and Monday’s high, respectively around 105.70 and 105.85, will be their stops ahead of eyeing the monthly high of 106.22. Meanwhile, the weekly support line, currently around 105.20, can offer immediate rest to the quote during the pullback moves. Though, any further weakness below 105.20 will easily refresh the monthly low of 104.92 while also catching a breather around 105.00. USD/JPY four-hour chart Trend: Pullback expected  

“Even with Australia’s borders closed for almost a year now, shutting down the country’s top services exports of international education and tourism,

“Even with Australia’s borders closed for almost a year now, shutting down the country’s top services exports of international education and tourism, currency appreciation is still a worry,” the Reserve Bank of Australia (RBA) board member Ian Harper said on Wednesday.   more to come ...

Gold trades near $1,810 per ounce at press time, having failed to take out the descending or bearish 5-week Simple Moving Average of $1,816 on Tuesday

Gold struggles to penetrate the 5-week SMA hurdle. While gold is up 1% on the week, an 11-month descending trendline is still intact.Gold trades near $1,810 per ounce at press time, having failed to take out the descending or bearish 5-week Simple Moving Average of $1,816 on Tuesday.  The sellers failed to establish a foothold under the November low of $12,764 last week, and the metal has risen by more than 1% this week.  Even so, it's too early to call a bullish reversal, as the descending trendline falling from the record high of $2,075 reached in August is still intact.  A convincing weekly close above the trendline would imply an end of the pullback from record highs and a resumption of the broader uptrend from the March 2020 low of $1,451. The bearish bias would strengthen if the metal drops below the weekly low of $1,781. Weekly chartTrend: Bearish Technical levels  

GBP/USD surged by roughly 100 pips during Wednesday's Asian trading hours to print 34-month highs above the 100-hour Simple Moving Average (SMA). The

GBP/USD jumps above 100-month SMA for first since August 2014. Cable sees high volatility reportedly due to flury of activity in GBP/JPY and EUR/GBP.GBP/USD surged by roughly 100 pips during Wednesday's Asian trading hours to print 34-month highs above the 100-hour Simple Moving Average (SMA).  The pair reached a high of 1.4241 and was last seen trading near 1.4165, still representing a 0.37% gain on the day. The 100-month SMA is located at 1.4142.  Cable's 100-pip rise is quite intriguing as the currency rarely charts big moves in Asia. According to Reuters, increased buying in GBP/JPY pulled GBP/USD higher. The GBP/JPY pair charted a 150-pip rally to 150.11 early today.  Meanwhile, rumors are doing the rounds that EUR/GBP's plunge triggered stop losses on long trades, leading to more robust demand for Pound and higher GBP/USD. It remains to be seen if the pair keeps the Asian session gains during the day ahead.  The currency pair has gained 6% this year on broad-based dollar weakness, increased hopes for a quick vaccine-driven economic recovery in the UK. Technical levels  

Steny Hoyer, the Majority Leader of the US House of Representatives, confirmed in his tweet, the House will vote on President Joe Biden’s $1.9 trillio

Steny Hoyer, the Majority Leader of the US House of Representatives, confirmed in his tweet, the House will vote on President Joe Biden’s $1.9 trillion coronavirus stimulus bill this Friday at 1400 GMT. Hoyer tweeted out: “The House will vote on Friday on @POTUS #AmericanRescuePlan to end this pandemic and deliver urgently needed relief to America’s families and small businesses. The American people strongly support this bill, and we are moving swiftly to see it enacted into law.”   more to come ..

Japan could likely be forced to keep issuing deficit-covering bonds at least until 2025, Finance Minister Taro Aso said on Wednesday, given that count

Japan could likely be forced to keep issuing deficit-covering bonds at least until 2025, Finance Minister Taro Aso said on Wednesday, given that country’s current fiscal situation. Additional comments "It's true Japan has been able to issue massive bonds stably at low cost.” “Markets are calm now, but there is no guarantee it will stay that way in the future." "Fiscal sustainability is very important for Japan" given its huge public debt.”

NZD/USD clocked a high of 0.7384 soon before press time – the level last seen in April 2018. The pair defended the former hurdle-turned-support of 0.7

NZD/USD bounces from crucial support as RBNZ revises unconstrained OCR forecast higher. The Jan. 6 high of 0.7315 is the level to beat for the sellers. NZD/USD clocked a high of 0.7384 soon before press time – the level last seen in April 2018. The pair defended the former hurdle-turned-support of 0.7315 (Jan. 6 high) early today, even though the Reserve Bank of New Zealand (RBNZ) expressed willingness to provide more stimulus and stressed its ability to implement negative rates if needed.  However, the central bank lifted its forecast for the unconstrained OCR, the rate needed to achieve its targets for inflation and unemployment, supporting the case for withdrawal of stimulus in 2022, as noted by Capital Economics in their RBNZ policy review.  That likely put a bid under the NZD, pushing NZD/USD to fresh multi-year highs above Tuesday's high of 0.7347.  The daily chart now shows the Relative Strength Index breaking out of its descending channel. As such, further gains could be seen.  The immediate bias would turn bearish if the pair fails to keep gains above the Jan. 6 high of 0.7315.  Daily chartTrend: Bullish Technical levels  

S&P 500 Futures pick up bids near 3,885, up 0.20% intraday, during the early Wednesday. In doing so, the risk barometer rises for the first time in se

S&P 500 Futures snaps six-day losing streak, bounces off three-week low.Powell tried to detail hopes of interest rate hikes, also conveyed fears of extended economic weakness.AstraZeneca unveiled a 94% effective rate to tame the hospitalization.Fears of US-China, Tehran-Washington tussle guard the optimism.S&P 500 Futures pick up bids near 3,885, up 0.20% intraday, during the early Wednesday. In doing so, the risk barometer rises for the first time in seven days. The corrective pullback from early February levels could be traced from Fed Chairman Jerome Powell’s efforts to derail fears of further inflation, followed by a surge in the rate. However, cautious optimism by the US central banker and the pending version two of testimony keep the market players confused. Read: Powell speech: Inflation risks are to the downside Also on the negative side could be US President Joe Biden’s readiness to join Canadian Prime Minister Justin Trudeau in an attempt to release two of Ottawa’s citizens from China. Furthermore, Iran’s rejection to respect American demand also challenges the mood. On the contrary, AstraZeneca came out with the upbeat news that their vaccines can reduce 94% of hospitalizations. While the news helps risks, the firm’s comments to deliver less than 50% of the promised jabs to the European Union (EU) during the second-quarter (Q2) of 2021 test sentiment. Elsewhere, Aussie Wage Price Index offered positive surprise but the RBNZ flashed mixed messages to challenge the market moves in Asia. It’s worth mentioning that the US 10-year Treasury yields drop 1.7 basis points (bps) to 1.347% by press time. Looking forward, market players will keep their eyes on Powell while trying to get extra clues for the US covid stimulus as the latest update suggests voting for the much-awaited stimulus on Friday. Also important will be the virus/vaccine updates as Japan is ready to unlock seven prefectures from the virus-led activity restrictions.

“The central bank remains committed to providing more stimulus if needed,” said the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr while speak

“The central bank remains committed to providing more stimulus if needed,” said the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr while speaking at the post-monetary policy decision press conference on Wednesday. Additional quotes We want to retain all optionality for stimulus. Always talked about negative rates as an option to be available to us. Very aware of global rise in bond yields. more to come ...

As per the prior analysis on EUR/JPY within this weeks, The Watch List: Gold, USD/JPY, AUD/USD, EUR crosses and many more, the cross has indeed moved

EUR/JPY is on the verge of a significant upside extension according to the daily chart's analysis. 128.20s are on the cards for a firm 4-hour closing high. As per the prior analysis on EUR/JPY within this weeks, The Watch List: Gold, USD/JPY, AUD/USD, EUR crosses and many more, the cross has indeed moved higher. On a first failed attempt, EUR/JPY has finally moved into a positive position on a second attempt where the proposed trade set up's stop loss can be moved to the breakeven point at the close of the 4-hour candle at the top of the hour.  Prior analysis EUR/JPY, swing tradingThere is a bullish bias on the daily chart and the 4-hour chart is ripening for a buy limit entry. The cross needs to break the immediate resistance and subsequently retest the structure as support from where bulls can long the pair for a 1:3 risk to reward set up with a stop below structure targeting the 128.80s. Live market, 4-hour chart The above chart illustrates attempt 1 (1R loss) and attempts 2, which has now moved above the prior closing highs for a breakeven worst-case scenario by moving the stop loss to the entry point. At this juncture, the upside is limited to the target and the downside is limited to 1R loss on a compounded position.   One would caution about moving the stop loss any higher considering that the W-formation is a bearish chart pattern and a correction to at least the neckline to test old resistance would now be expected.   

EUR/USD is trading near 1.2160 at press time. That level is currently housing the neckline resistance of the inverse head-and-shoulders pattern, as se

EUR/USD probes key resistance after Tuesday's Doji candle.A close higher would confirm a bullish breakout on the daily chart.EUR/USD is trading near 1.2160 at press time. That level is currently housing the neckline resistance of the inverse head-and-shoulders pattern, as seen on the daily chart.  A close higher would confirm a breakout and open the doors for a 200-pip rally (target as per the measured move method). Major resistance is located at 1.2349 (Jan. 6 high).  The pair faced rejection at 1.2180 and failed to keep gains above the neckline hurdle on Tuesday, forming an indecisive Doji candle on the daily chart. The pattern has established 1.2135 (Tuesday's low) as the level to defend for the bulls.  A move below that could yield a re-test of 1.2023 (Feb. 17 low).  Daily chartTrend: Bullish Technical levels  

Following its initial run-up to 1.0821, AUD/NZD drops back to 1.0773 during early Wednesday. The pair’s latest moves could be traced to the Reserve Ba

AUD/NZD fizzles RBNZ-led uptick to keep two-week-old support break.RBNZ kept monetary policy unchanged but flashed mixed signals on economics.Bearish MACD also favors sellers targeting 200-bar SMA.Bulls need to refresh yearly high above 1.0830 to retake control.Following its initial run-up to 1.0821, AUD/NZD drops back to 1.0773 during early Wednesday. The pair’s latest moves could be traced to the Reserve Bank of New Zealand’s (RBNZ) quarterly monetary policy meeting results. Read: Breaking: RBNZ keeps QE, OCR unchanged Given the pair’s sustained trading below the previous support line from February 09, amid bearish MACD, AUD/NZD sellers are determined to attack the 200-bar SMA level of 1.0727. It should, however, be noted that the quote’s weakness past-1.0727 will not hesitate to challenge the monthly bottom surrounding 1.0540. Meanwhile, corrective pullback beyond the previous support line, at 1.0790 now, needs to cross the latest high, also the highest since January 20, 2021, around 1.0845, to convince traders. Following that, October 2020 high near 1.0910 and the 1.10000 threshold will be in the spotlight. AUD/NZD four-hour chart Trend: Further weakness expected  

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4615 versus Tuesday's fix at 6.4516.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4615 versus Tuesday's fix at 6.4516. 

NZD/USD stands on slippery ground, losing over 35 pips before recently bouncing to 0.7330, after the Reserve Bank of New Zealand’s (RBNZ) rate decisio

NZD/USD takes offers while snapping four-day winning streak.RBNZ kept interest rate and LSAP unchanged but cited economic fears.S&P 500 Futures print mild losses, US Treasury yields drop following Powell’s mixed clues.Vaccine updates, US stimulus gridlock and unlock news offer extra catalysts to watch other than RBNZ’s Orr, Powell Testimony 2.0.NZD/USD stands on slippery ground, losing over 35 pips before recently bouncing to 0.7330, after the Reserve Bank of New Zealand’s (RBNZ) rate decision on early Wednesday. The kiwi pair’s slump should have taken the fears of economic uncertainty conveyed by the New Zealand central bank. RBNZ kept the benchmark interest rate unchanged at 0.25% while also holding the LSAP (large-scale asset purchase program) at NZD 100 billion. However, comments like “committee agreed it must remain prepared to provide additional support if necessary,” as well as,” Inflation, employment likely to remain below targets” seemed to have recalled the kiwi bears. Read: Breaking: RBNZ keeps QE, OCR unchanged NZD/USD bulls are also tested over the risk catalysts as market sentiment dwindles following Fed Chair Jerome Powell’s fears of further economic struggle before reaching the inflation and unemployment targets. It should be noted that the US-China and the Washington-Tehran tussles add to the market’s sluggish mood. However, upbeat vaccine news, recently announced by AstraZeneca, joins further unlocks of the virus-led activities, this time from Japan, seems to favor the risks. That said, S&P 500 Futures drop 0.20% while the US 10-year Treasury yields decline 2.2 basis points (bps) by press time. Having witnessed the initial reaction to the RBNZ, NZD/USD traders will keep their eyes on Governor Adrian Orr’s comments, up for publishing in the next one hour, for further details. Should RBNZ’s Orr steps back from his cautious optimism, which is less likely, the pair may have to trim some of its latest gains. Following that, the second part of Fed Chair Powell’s testimony and updates on the covid vaccines and easing in the virus-led activity restrictions will also be the key to watch. Technical analysis January 2021 peak surrounding 0.7315, followed by the 0.7300 round-figure, will challenge the pullback moves if any. Alternatively, April 2018 high near the 0.7400 threshold may lure immediate buyers ahead of directing them to the year 2018 peak close to 0.7445.  

The Reserve Bank of New Zealand and MPS was not expected to announce any further changes today and instead acknowledge that there is now less need fo

The Reserve Bank of New Zealand and MPS was not expected to announce any further changes today and instead acknowledge that there is now less need for monetary stimulus than it thought at its November review. RBNZ key takeaways OCR Unchanged. RESERVE BANK OF NEW ZEALAND SAYS PROLONGED MONETARY STIMULUS NECESSARY RBNZ SAYS LARGE SCALE ASSET PURCHASE PROGRAMME MAINTAINS AT NZ$100 BLN RBNZ SAYS FUNDING FOR LENDING PROGRAMME UNCHANGED RBNZ SAYS ECONOMIC OUTLOOK AHEAD REMAINS HIGHLY UNCERTAIN RBNZ SAYS INFLATION AND EMPLOYMENT WILL REMAIN BELOW REMIT TARGETS OVER MEDIUM TERM  RBNZ SAYS OPERATIONAL WORK TO ENABLE THE OCR TO BE TAKEN NEGATIVE IF REQUIRED IS NOW COMPLETED More to come... How did the NZD react? The kiwi has been bid in the build-up to the event given that the Gross Dometic Product, inflation, employment, commodity and houses prices have all been a lot former than forecast last time around by the central bank.   On the event, the NZD/USD has dropped to test hourly support. However, at the prior meeting back in November, the price rallied over 90 pips after an initial drop in the first hour of trade post the announcements: With that being said, the upside is also limited considering that RBNZ has noted that the accommodation shall remain in place for some time. About the RBNZ interest rate decision and rate statement The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.

New Zealand RBNZ Interest Rate Decision meets forecasts (0.25%)

AUD/JPY rallies to the intraday high of 83.45, up 0.10% on a day, while cheering welcome Wage Price Index for Australia during Wednesday’s Asian sessi

AUD/JPY rises for the fifth consecutive day after upbeat employment data from Australia.Australia’s Wage Price Index grew better than forecast 0.3% QoQ during fourth-quarter (Q4).Risks dwindle as Fed’s Powell failed to placate bond bears, vaccine optimism also fails to tame the cautious mood.US stimulus gridlock continues, Japan is up for removing emergency from seven prefectures earlier than planned.AUD/JPY rallies to the intraday high of 83.45, up 0.10% on a day, while cheering welcome Wage Price Index for Australia during Wednesday’s Asian session. In doing so, the quote marks a five-day uptrend while staying near the highest since December 2018. Australia’s Q4 Wage Price Index grew past-0.3% forecast and 0.1% prior to +0.6% QoQ. The key economic data also reprint 1.4% figures for YoY versus downbeat expectations of 1.1%. Further details suggest, Construction Work Done dropped below 1.0% market consensus but recovered from -1.8% upward sly revised prior. Given the mostly strong data, Australian dollar buyers gained extra support to keep their north-run direction towards the 2018 highs. However, the latest shift in the market’s mood seems to challenge the AUD/JPY bulls. Wall Street closed mixed and the US 10-year Treasury yields struggled for further traction to the north after Federal Reserve Chairman Jerome Powell cited fears of coronavirus (COVID-19)-led economic slowdown. However, the Fed’s readiness to extend easy money policies and tame the reflation fears seemed to have probed the risk-off mood. As a result, S&P 500 Futures recovers early Asian losses while trying to regain the 3,900 threshold, currently around 3,875. Further, the US 10-year Treasury yields drop 1.6 basis points (bps) 1.348% by press time. It should be noted that Japan’s Nikkei 225 mark near 1.0% losses after the previous day’s holiday whereas Australia’s ASX 200 also drop 0.40% amid cautious optimism. Other than Powell, AstraZeneca’s news of 94% success in reducing hospitalization and Japan’s readiness to take back virus-led restrictions from seven prefectures seemed to have helped the risks off-late. Looking forward, Powell’s testimony 2.0 and updates concerning the US covid stimulus will be the key amid a light calendar. Technical analysis Bulls can keep eyes on the December 2018 peak surrounding 83.90 unless the quote drops back below January tops of 80.92.  

AUD/USD is now trading marginally higher on the day, with Australian currency finding some love in the wake of an upbeat December quarter wage price i

AUD/USD adds 10 pips on above-forecast Aussie wage price inflation data. Surprise contraction in Australia's consutruction sector keeps gains under check.Other macro factors support continued gains in the Aussie dollar.AUD/USD is now trading marginally higher on the day, with Australian currency finding some love in the wake of an upbeat December quarter wage price index – the metric used by the Reserve Bank of Australia and the Treasury to gauging wage growth.   While economists expected 0.3% quarter-on-quarter wage growth in the final three months of 2020 following a meager 0.1% increase in the previous three months, the actual figure came in at 0.6%, beating projections. In annualized terms, wages grew 1.4% versus 1.1% expected and 1.4% previous.  The progress in pay rise, alongside a continued drop in the unemployment rate, is good news for the Aussie dollar.  So far, however, the Aussie bulls have been cautious in cheering the data. The AUD/USD pair has added around ten pips to trade near 0.7922, representing a 0.15% rise on the day. The slow ascent could be associated with the surprise contraction in the construction sector in the final quarter of 2020.  Construction Work Done fell by 0.9% in Q4, missing the expected 1% rise by a big margin following the preceding quarter's 1.8% decline.  The pair, however, could challenge and break above 0.7917 – the high of Tuesday's indecisive Doji candle – later today if the stock markets pick up a bid and treasury yields drop in response to the Federal Reserve Chairman Jerome Powell's dovish testimony.  The message that came out from Powell's speech to Congress was that the economy remains a long way from the Fed's goals. The central bank remains committed to current accommodation and asset purchases at least at the current pace.  Besides, expectations for large US fiscal stimulus supports the reflation theme and could keep commodities better bid, helping the AUD maintain its bullish trajectory.  Technical levels  

The following is an analysis of the hourly time frame and price structure ahead of the Reserve Bank of New Zealand event at 01:00 GMT. When is the RBN

NZD/USD is perched at the top of the canopy leading into the RBNZ.Bulls will be looking for an upside extension on a less dovish outcome.  The following is an analysis of the hourly time frame and price structure ahead of the Reserve Bank of New Zealand event at 01:00 GMT.When is the RBNZ and how it could affect NZD/USD?It should be noted that higher volatility is expected around such an event and trading is a far riskier practice.  Reducing exposure to price volatility is common-practice around such high profile events.  Last meeting around, the price rallied around 90 pips within the hour immediately after the announcements, dropping from 0.69238 to 0.6809 before rallying: NZD/USD hourly chart As can be seen, the price is in an uptrend and there are little signs that the bulls are tiring while above support.  The upside target is modest but it is based on the correction's range and comes as a measured -61.8% Fibonacci retracement to 0.7354. The setup can be better managed from a lower time frame, such as the 15-min chart as follows: 15-chart In the build-up to the RBNZ event, a deeper retracement would be ideal which would raise the target level accordingly to the Fibonacci measurement of the correction's range and offer deeper support. However, a position that is taken at the market with a stop-loss below the current lows and structure already offers a 1:2.7 risk to rearward ratio.         

Australia Wage Price Index (QoQ) above expectations (0.3%) in 4Q: Actual (0.6%)

Australia Wage Price Index (YoY) above forecasts (1.1%) in 4Q: Actual (1.4%)

Australia Construction Work Done below expectations (1%) in 4Q: Actual (-0.9%)

GBP/USD rises to a fresh high since April 2018 while taking the bids near 1.4122 during Wednesday’s Asian session. In doing so, the cable stays strong

GBP/USD stays on the bids for the fifth consecutive day inside a three-week-old rising channel.Immediate channel’s resistance line can test the short-term bulls.Sellers are less likely to enter above the previous resistance line from September 2020.GBP/USD rises to a fresh high since April 2018 while taking the bids near 1.4122 during Wednesday’s Asian session. In doing so, the cable stays strong inside the ascending trend channel amid bullish MACD signals. Given the pair’s nearness to the resistance line of the stated channel from February 02, GBP/USD buyers are likely to struggle going forward. However, a clear break of 1.4140 immediate hurdle will quickly propel the quote beyond the 1.4200 high to challenge March 2018 peak surrounding 1.4245. On the flip side, pullback moves may aim for the 1.4000 psychological magnet ahead of testing the channel’s support line, at 1.3945 now. Even if the channel’s downside break will strengthen the bearish bias, GBP/USD sellers should remain cautious unless the quote drops back below an ascending trend line from September 2020, currently around 1.3810. Overall, GBP/USD bulls have little room on the upside before tackling the major hurdles. As a result, pullback can’t be ruled out. GBP/USD daily chart Trend: Pullback expected  

Early Wednesday at 01:00 GMT market sees the key monetary policy decision by the Reserve Bank of New Zealand (RBNZ). New Zealand’s central bank is at

Early Wednesday at 01:00 GMT market sees the key monetary policy decision by the Reserve Bank of New Zealand (RBNZ). New Zealand’s central bank is at the key stage of the economic cycle where the recovery moves from the coronavirus (COVID-19) need justification but the latest economics haven’t confirmed the bull’s arrival. It should be noted that Governor Adrian Orr and the company aren’t famed for pleasing the bears, which in turn makes today’s event an important one. As a result, the speech from RBNZ’s Orr, starting from 02:00 GMT, will also be crucial to watch. Market consensus favors no change in the benchmark interest rate, currently at 0.25%, or the Large Scale Asset Purchases (LSAP) during today’s monetary policy meeting. However, the economic forecast and the way out of easy money, amid rumors of future tightening, will be closely watched for near-term direction. Ahead of the event, Australia and New Zealand Banking Group (ANZ) said, We expect the RBNZ will acknowledge better data with forecast upgrades, but that they will send a clear message that stimulus will remain in place for a long time, potentially reinstating a flat (actual) OCR forecast and/or installing new forward guidance – perhaps saying the OCR will be on hold until 2023 at the earliest. We see the LSAP limit being left at $100bn today, but the timeframe extended. It would be clearer for the market to switch to communicating purchases to the market in pace terms and that could happen as soon as today too. Also joining the bears’ league is TD Securities that said, We expect the RBNZ to keep all policy settings unchanged at the upcoming MPS- OCR at 0.25%. The RBNZ is likely to acknowledge the stronger than anticipated recovery so far, with nearly all NZ data outcomes exceeding RBNZ's and market expectations. However, we expect them to highlight that OCR hikes are not on their radar given that the recovery is patchy and that downside risks remain. Focus to turn to the LSAP program. How could it affect NZD/USD? NZD/USD takes rounds to a 34-month low while recently easing to 0.7340 ahead of the much-awaited event by the kiwi traders. Given the RBNZ’s likely cautious optimism, the quote may extend its upward trajectory towards the year 2018 peak. However, the bulls seem tiring off-late and hence any hidden bearish clues, mainly from economic forecasts or the way to exit the easy money flow, can trigger a fresh pullback. On the same line, FXStreet’s Dhwani Mehta says, “Hints towards a rate hike could spark a correction in NZD/USD.” Technically, January 2021 peak surrounding 0.7315, followed by the 0.7300 round-figure, will challenge the pullback moves, if any. Alternatively, April 2018 high near the 0.7400 threshold may lure immediate buyers ahead of directing them to the year 2018 peak close to 0.7445. Keynotes NZD/USD consolidates close to cycle highs above 0.7300 ahead of RBNZ rate decision RBNZ Preview: To hold fire, upgrade its economic forecasts About the RBNZ interest rate decision and rate statement The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.

USD/CAD takes a U-turn from 1.2597 to recently around 1.2585 in a fresh downside during Wednesday’s Asian session. In doing so, the loonie pair fizzle

USD/CAD fails to keep the bounce off the lowest levels since April 2018.WTI awaits more clues to extend pullback from 13-month top on dovish API data.Post-Powell DXY recovery halts, BOC’s Macklem and Canadian PM Trudeau offered mixed signals.USD/CAD takes a U-turn from 1.2597 to recently around 1.2585 in a fresh downside during Wednesday’s Asian session. In doing so, the loonie pair fizzles the previous day’s bounce-off 34-month low as WTI and US dollar’s pause join hopes of upbeat US-Canada relations to favor the bulls. Canadian PM Justin Trudeau’s latest optimism over the Ottawa-Washington relations seemed to have helped the Canadian Dollar buyers off-late. In his firm bilateral talks with US President Joe Biden, Mr. Trudeau eyes strong US-Canada ties versus the previously strained relations during the Trump administration. Earlier on Tuesday, the Bank of Canada (BOC) Governor Tiff Macklem struggles to convince traders of the nation’s vaccine capacities after confirming economic challenges. Also helping the USD/CAD sellers could be a halt in the WTI’s weakness following downbeat private inventory data. The energy benchmark, also the key to Canada’s exports, eased from the highest since January 2020 the previous day amid the US dollar’s recovery. The pullback moves gained extra strength after the American Petroleum Institute (API) flashed inventory build. On the other hand, the US dollar index (DXY) also fails to keep its recovery moves that took clues from Fed Chair Jerome Powell’s latest testimony. The reason could be traced from a lack of major catalysts and the US central banker’s inability to placate the bond bears. Also contributing to the US dollar weakness could be the AstraZeneca comment suggesting 94% effectiveness in reducing hospitalization during real-life usage. Amid these plays, S&P 500 Futures mark mild losses and the US 10-year Treasury yields also dropped 2.4 basis points to 1.34% by press time. Looking forward, a lack of major data/events will keep challenging the USD/CAD traders during the Asian session. However, any major updates for the US stimulus and/or virus/vaccine shouldn’t be ignored. Technical analysis Unless providing a daily close beyond the monthly resistance line, at 1.2690 now, USD/CAD buyers shouldn’t take entries.  

Gold keeps $1,800, currently around $1,805, while struggling to defy the previous day’s pullback from a one-week top during the initial Asian session

Gold picks up bids to reverse the previous day’s pullback from one-week top.Powell tried to placate reflation fears, vaccine optimism prevails.US stimulus gridlock, light calendar challenge the mood.Powell 2.0, risk news will be the key to watch.Gold keeps $1,800, currently around $1,805, while struggling to defy the previous day’s pullback from a one-week top during the initial Asian session on Wednesday. The yellow metal snapped the two-day winning streak amid the US dollar’s corrective pullback. However, the greenback’s failures to hold the recovery moves seem to favor the gold buyers. Powell couldn’t placate bond bears… Despite showing readiness to extend the bond purchase and flashing ‘enough’ advance signals before rolling back the easy money, Fed Chair Jerome Powell couldn’t tame the yields. The reason could be traced from the statements suggesting further expected upside in the inflation figures. On the other hand, AstraZeneca’s latest comments suggest that the first real-world study of the covid-19 vaccine demonstrates a 94% reduction in hospitalizations. Elsewhere, the US policymakers are trying to progress on the much-awaited covid stimulus, but fail off-late, whereas the political tussle among the US-China and Washington-Tehran continues. It should be noted that the surge in the Treasury yields takes money off the riskier assets, like equity and commodity off-late, which in turn challenge the gold buyers in case of the rising bond coupons. Against this backdrop, S&P 500 Futures drop 0.20% after Wall Street benchmarks closed mixed for Tuesday. Looking forward, the yellow metal traders will keep their eyes on the second Testimony of Fed’s Powell for clarification while updates on US coronavirus relief package and vaccines should offer extra catalysts to watch. Technical analysis A downward sloping trend line from January 06, currently around $1,813, precedes a 21-day SMA level of $1,818, to challenge short-term gold buyers. Though, fresh declines need validation from $1,785 to convince the yellow metal bears.  

As per the prior analysis, GBP/AUD Price Analysis: Monitoring for bullish structure to target 38.2% Fibo, the price has indeed moved to the target are

GBP/AUD completes the M-formation pattern to the target. There is now too much weekly support to contemplate fading the rally.As per the prior analysis, GBP/AUD Price Analysis: Monitoring for bullish structure to target 38.2% Fibo, the price has indeed moved to the target area. Prior analysisGBP/AUD is in the hands of the bears but there are prospects of an upside correction according to the following analysis taken from a daily M-formation and managed from an hourly chart.Daily chartLive market Daily chart The daily chart is showing that the price is resisted at this juncture and could be due for a continuation to the downside.  However, the weekly chart shows that the price is being supported and bound by weekly support and resistance: Until the area is cleared, there is just as much likelihood that the pair can continue higher from this support area, especially given that the daily M-formation is a bullish pattern. 

GBP/USD continued its upwards march on Tuesday and rallied confidently to the north of the 1.4100 mark for this first time since April 2018. As FX mar

GBP/USD marched above the 1.4100 level on Tuesday and is now up over 3% on the month.Optimism over the UK’s vaccine rollout and reopening plans continues to boost GBP, but concerns the currency is becoming overbought are growing.GBP/USD continued its upwards march on Tuesday and rallied confidently to the north of the 1.4100 mark for this first time since April 2018. As FX market volumes dip ahead of the start of Asia Pacific trade, the pair is consolidating just to the north of the 1.4100 level. As seemingly been the case more often than not this month, GBP again finished the session at the top of the G10 rankings, up 0.36% or about 50 pips. Tuesday’s gains marked a fourth straight session in the green, during which time the pair has rallied from the mid-1.3800s to current levels nearly 250 pips higher. Out of the 17 trading session so far this month, GBP/USD has finished higher 13 times and has rallied north of 3% from the mid-1.3700s. Driving the day Sterling’s confident performance on Tuesday came despite a softish monthly labour market report – market participants haven’t seen these labour market updates from the UK Office of National Statistics particularly informative over the last few months given that the UK government’s furlough scheme, in which the government subsidises employee wages so long as they are kept on the company’s payroll, distorts the data. More important for sterling are reports that UK Finance Minister Rishi Sunak is likely to extend the furlough scheme again until the end of May, after which it is hoped that most Covid-19 restrictions will have been lifted. But that was seemingly not the main focus of the day, according to traders, many of whom suggested that gains in sterling were down to continued optimism over the UK’s vaccine rollout and reopening plan. Reports from the Telegraph suggesting that the rate at which the UK government eases lockdown restrictions could be accelerated if real-world data on the effectiveness of vaccines is better than expected is likely to support this GBP bullish narrative. Some market commentators also point to sterling supportive M&A news; UK insurance company Aviva confirmed on Tuesday the sale of its French unit to France’s Aema Groupe for EUR 3.2B (which equates to £2.7B). Note that more and more FX strategists are ringing alarm bells about how GBP might be entering overbought territory. After all, GBP/USD is up nearly 2% in four days. Some profit-taking might be in order.    

Silver wavers in a range above $27.50, currently around $27.65, while trying to defend the bulls amid the initial Asian session on Wednesday. The whit

Silver keeps bounces off 100-bar SMA following a pullback from channel resistance.Receding MACD strength directs sellers towards 200-bar SMA, channel’s lower line.Five-week-old support line adds to the downside filters.Silver wavers in a range above $27.50, currently around $27.65, while trying to defend the bulls amid the initial Asian session on Wednesday. The white metal snapped a two-day winning streak while easing from the highest levels last seen on February 02 during the previous day. In doing so, the commodity prices stepped back from the upper line of an ascending trend channel formations established since February 04. However, the 100-bar SMA offered the latest bounce to the quote. It should, however, be noted that the corrective pullback lacks momentum, as the MACD teases sellers, which in turn indicates further weakness by the bullion. As a result, silver bears will wait for a clear downside break of 100-bar SMA, at $27.22 now, to revisit the 200-bar SMA level of $26.44. Though, the support line of the stated channel and over a month-old rising trend line, respectively around $26.30 and $25.90, will challenge the precious metal’s further downside. Meanwhile, the stated channel pattern’s resistance line, at $28.17 now, will eye for the $28.40 and the $29.00 before directing the bulls towards the monthly top above $30.00. Overall, silver is likely to witness pullback in its short-term upward trajectory. Silver four-hour chart Trend: Pullback expected  

WTI drops from $61.89 to $61.06, currently around $61.20, at the end of Tuesday’s settlement, early Wednesday morning in Asia. The oil benchmark recen

WTI extends pullback from multi-month top after downbeat private inventory survey.API Weekly Crude Oil Stock grew beyond -5.8M for the week ended on February 19.US dollar weakness battles reflection fears and a lack of major data/events to tame the oil sellers.WTI drops from $61.89 to $61.06, currently around $61.20, at the end of Tuesday’s settlement, early Wednesday morning in Asia. The oil benchmark recently responded to the industry stockpile report unveiled by the American Petroleum Institute (API). However, the greenback bears join cautious optimism towards the global recovery and an absence of normal supply flow to back the oil bulls. As per the latest weekly inventory report, API stockpiles jumped +1.026 million barrels versus the previous draw of 5.8 million barrels during the period ended on February 19. Although the commodity prices dropped following the bearish stockpile data, bulls aren’t gone home as the US-Iran tussle joins sustained abnormal oil supplies from the Persian Gulf. Iran’s Supreme Leader Ayatollah Ali Khamenei said, per New York Post, during the week that Tehran would not succumb to pressure from the United States on any matter. Washington and Tehran recently discuss the detention of Americans by the Gulf country as well as the nuclear deal amid the new government on Capitol Hill. Elsewhere, production from Texas is yet to recover the losses marked during the latest freeze. The same join on-going output cuts from Saudi Arabia, Libya and Russia to help the energy buyers. It’s worth mentioning that the US dollar’s weakness, currently near the early January levels, also helps the oil benchmark as well as the hopes of the economic recovery amid unlock announcements from key players. Furthermore, Fed Chair Jerome Powell’s semi-annual testimony favored expectations of further economic strength while also turned down the reflation fears suggesting the Fed’s readiness to do whatever necessary. Looking forward, oil traders await details from Energy Information Administration (EIA) for fresh impulse. The official inventory report, up for publishing around 15:30 GMT, is likely to mark a reduction in the stockpile draw from -7.258 million barrels to -5.372 million barrels during the week ended on February 19. Also likely to direction oil traders will be the second season of the Fed’s Chair Powell. Technical analysis Failures to stay strong beyond $62.00 tease counter-trend traders to eye the monthly support line near $59.70. However, the $60.00 can also raise bars for the WTI sellers. Meanwhile, the $63.00 and previous yearly high surrounding $65.45 can challenge the oil buyers above $62.00.  
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