The EUR/USD currency pair
- Prev Open: 1.0842
- Prev Close: 1.0836
- % chg. over the last day: -0.06 %
The PCE Price Index report will be released today in the United States. The PCE index is the Fed's preferred measure of inflation because the index tends to show inflation trends less affected by short-term price changes. Economists expect a 0.3% increase in the index in January after a 0.2% increase in the previous month. With recent economic data releases suggesting that the US economy remains resilient, stronger data could prompt the Fed to postpone further rate cuts. This would strengthen the US dollar and pressure indices and precious metals.
- Support levels: 1.0820, 1.0805, 1.0789, 1.0761, 1.0704, 1.0684
- Resistance levels: 1.0858, 1.0908
The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price again tested the support zone at 1.0805, after which the buyers retook the initiative. Today's price movement will mostly depend on how the price reacts to the support level 1.0820. A test below and consolidation above the level will be a buy signal with targets above 1.0858. If 1.0820 fails to hold and the price consolidates below, a fall to 1.0789 is highly probable. In such a scenario, it is best to focus on selling.
Alternative scenario: if the price breaks the support level of 1.0789 and consolidates below, the downtrend will likely resume.
- – German Retail Sales (m/m) at 09:00 (GMT+2);
- – German Unemployment Rate (m/m) at 10:55 (GMT+2);
- – German Consumer Price Index (m/m) at 15:00 (GMT+2);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- – US PCE Price index (m/m) at 15:30 (GMT+2);
- – US Chicago PMI (m/m) at 16:45 (GMT+2);
- – US Pending Home Sales (m/m) at 17:00 (GMT+2);
- – US FOMC Member Bostic Speaks at 17:50 (GMT+2);
- – US FOMC Member Mester Speaks at 20:15 (GMT+2).
The GBP/USD currency pair
- Prev Open: 1.2679
- Prev Close: 1.2660
- % chg. over the last day: -0.15 %
Last week, the British pound posted its biggest weekly gain in 2024 against the US dollar. An upbeat business survey reinforced expectations that the British economy will soon emerge from a shallow recession. Investors are awaiting the Bank of England's (BoE) first rate cut in August while discounting a similar move by the Federal Reserve and the European Central Bank in May.
- Support levels: 1.2638, 1.2615, 1.2560, 1.2538, 1.2499
- Resistance levels: 1.2670, 1.2750, 1.2827
From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the liquidity below 1.2638, after which the buyers took the initiative. But the first resistance level at 1.2670 became a stumbling block for the price, so it is essential to watch the price reaction to this level today. If the price consolidates above 1.2670, we should look for buying to renew yesterday's high. If the price falls below the moving averages, there could be a sharp wave of selling to update yesterday's low.
Alternative scenario: if the price breaks through the support level 1.2611 and consolidates below it, the downtrend will likely resume.
- Prev Open: 150.48
- Prev Close: 150.69
- % chg. over the last day: +0.14 %
- Support levels: 149.70, 148.25, 147.67, 148.81
- Resistance levels: 150.22, 150.71, 150.87, 151.90
- – Japan Industrial Production (m/m) at 01:50 (GMT+2);
- – Japan Retail Sales (m/m) at 01:50 (GMT+2);
- – Japan Tokyo Core CPI (m/m) at 07:00 (GMT+2).
- Prev Open: 2030
- Prev Close: 2035
- % chg. over the last day: +0.24 %
- Support levels: 2031, 2032, 2016, 2013, 2007, 1995, 1989
- Resistance levels: 2044, 2062, 2069, 2084, 2090
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- – US PCE Price index (m/m) at 15:30 (GMT+2);
- – US Chicago PMI (m/m) at 16:45 (GMT+2);
- – US Pending Home Sales (m/m) at 17:00 (GMT+2);
- – US FOMC Member Bostic Speaks at 17:50 (GMT+2);
- – US FOMC Member Mester Speaks at 20:15 (GMT+2).
The USD/JPY currency pair
The strengthening of the dollar on Wednesday put pressure on the yen. Additional pressure on the yen also came from dovish comments from Bank of Japan (BoJ) Executive Director Shimizu, who said there is not enough confidence that the BoJ's stable inflation target will be met. But the Japanese yen strengthened sharply in the Asian session today, pulling back from more than three-month lows against the dollar, as BoJ board spokesman Hajime Takata urged the central bank to begin discussing details of a potential end to ultra-loose monetary policy very shortly, including abandoning negative interest rates and controlling bond yields. Japan's chief currency diplomat, Masato Kanda, also said on the sidelines of the G20 financial leaders' meeting in Brazil that the government is monitoring currency movements and is ready to react.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish, but considering such a fall, there are prerequisites for a trend change. Currently, the price has strongly deviated from the moving averages, with the MACD indicator indicating that the price is oversold. Inside the day, we can look for buying but with a shortstop and the nearest targets (150.22). Selling can be considered from 150.22 or moving average lines, provided sellers react.
Alternative scenario: if the price consolidates below the support level at 149.27, the downtrend will likely resume.
The XAU/USD currency pair (gold)
Gold rose to 2035 dollars per ounce on Wednesday thanks to lower bond yields (inverse correlation) as investors continued to assess the outlook for monetary easing ahead of key US PCE inflation data today. On the macroeconomic front, US Q4 GDP came in at 3.2% y/y, down slightly from the initial estimate of 3.3%, but still pointing to a robust economy. Markets now expect the central bank to keep interest rates unchanged in March and May but with a more than 50% chance of a rate cut in June.
From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is trading above the moving averages, and the MACD indicates the continuation of the uptrend. It is disconcerting that the price failed to test the liquidity below 2022, and this may happen today on the PCE news release. But buyers have built another support zone below 2030. So, buy deals can be considered from 2030 and 2022, provided the price responds with initiative. If there is no buyer initiative, the price may fall sharply down to 2016.
Alternative scenario: if the price breaks below the support level in 2016, the downtrend will likely resume.
by , 2024.02.29
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