USDJPY is moving in the Box pattern and the market has reached the resistance area of the pattern
USDJPY – BoJ’s Shimizu: Inflation Target Achievement Likelihood Still Low
The Bank of Japan Executive Director Seiichi Shimizu said inflation data is not up to the market. We have to check the Wage price and inflation growth alignment for further changes in the monetary policy settings.
Bank of Japan Executive Director Seiichi Shimizu comments on the inflation target post-Japanese CPI release, stating, “Likelihood of target achievement is still insufficiently high.” He mentions the BoJ’s plan to review monetary easing when confident about reaching the target and emphasizes rigorous examination of wage trends alongside price data.
GOLD – Gold Price Inches Down, Maintains Tight Range Pre-US GDP
Gold markets are moving flat after the US Domestic data printed at negative numbers. FED Speakers Giving hopes of a rate hike from FED is supporting the US Dollar against Gold. 
XAUUSD Gold price is moving in the Descending channel and the market has fallen from the lower high area of the channel
US Durable Goods Orders plunge more than expected, influencing Q1 2024 GDP outlook. Mixed Home Prices data reveals increased buyer demand.
Daily Market Highlights:
– Gold’s advance, driven by a weak US Dollar, is undermined by lower US yields.
– Durable Goods Orders fall by -6.1% MoM, surpassing the expected -4.5% contraction and December’s -0.3% dip.
– S&P/Case Shiller Home Price Index for December rises 6.1% YoY, exceeding estimates of 6% and November’s 5.4%.
– Earlier in the week, US New Home Sales increase by 1.5%, below the expected 0.68M.
– Dallas Fed Manufacturing Index improves from January but still contracts at -11.3 in February.
– Federal Reserve Governor Michelle Bowman expresses no rush to cut rates, citing inflation risks.
– Bowman emphasizes a cautious approach to policy changes, signaling a slow decline in inflation.
– Interest rate speculators eliminate Fed rate cut expectations for March and May, with a 49.7% chance in June.
– Investors price in 85 basis points of easing throughout 2024.
EURUSD – Dips on Risk-Off Sentiment Pre-Eurozone, US Data; Trades Near 1.0840
ECB President Christine Lagarde said inflation is still high in the market, So there are no changes in rates in the near term. German GFK Consumer confidence for the March month came at -29 versus -29.6 previous reading.
EURUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
In December, US Housing Price Index (MoM) rose by 0.1%, below expectations of 0.3%, while Durable Goods Orders fell by 6.1%, defying expectations of a 4.5% decline. CME FedWatch shows a reduced 1.0% probability of March rate cuts, with May and June at 21% and 49.8%, respectively.
The Euro (EUR) may gain from ECB President Lagarde’s remarks on maintaining current policy despite approaching inflation targets. Gfk German Consumer Confidence Survey for March meets expectations at -29. Focus shifts to Germany’s Retail Sales and CPI data later in the week.
Commerzbank economists stress Friday’s inflation figures’ importance but don’t see a clear trend for a weaker Euro. Société Générale’s Kit Juckes highlights the significance of the order and aggressiveness of rate cuts by the Federal Reserve and ECB in shaping the EUR/USD pair’s direction this year.
USDCHF – Bounces Pre-Swiss ZEW, Hovers Around 0.8800
Ahead of Swiss Q4 GDP, and retail sales Tomorrow, the Swiss Franc is moving flat against counter pairs. The US Housing price index came at 0.10% in December versus a 0.40% increase in November month.
USDCHF is moving in an Ascending channel and the market has reached the higher low area of the channel
The Swiss Franc (CHF) faces downward pressure ahead of the Swiss ZEW Survey, with eyes on Thursday’s GDP and Real Retail Sales data.
Meanwhile, the US Dollar (USD) weakens as the Federal Reserve signals caution on rate cuts, reducing the probability of a March cut to 1.0%. US economic indicators show the Housing Price Index fell short in December, and Durable Goods Orders declined by 6.1% in contrast to expectations.
USDCAD – Rebounds on Disappointing US Durable Goods Orders
US Durable orders data came at -6.1% in January and missed the -4.5% forecast reading. and more down from the previous reading of -0.
30%. This reading makes the US Dollar stronger against CAD in the market.
USDCAD is moving in an Ascending trend line and the market has rebounded from the higher low area of the trend line
Canadian GDP is scheduled today and the market is waiting for further moves.
Canada’s Q4 Current Account data will be overshadowed by the simultaneous release of the US GDP report on Wednesday at 13:30 GMT. Market focus shifts as USD/CAD reacts to the miss in US Durable Goods Orders, which declined by 6.1% in January, falling short of the -4.5% forecast. The Conference Board Consumer Confidence Index also disappointed, printing at 106.7 versus the expected 115.0. Additionally, the US Housing Price Index rose only 0.1% MoM in December, below the 0.3% forecast.
Looking ahead, Canada’s Q4 Current Account, expected to recover but stay negative at -1.25 billion, will be released on Wednesday. Meanwhile, the US annualized Q4 GDP is forecasted to remain at 3.3%. On Thursday, Canada’s Q4 GDP is anticipated to rebound to 0.8% from -1.1%.
USD INDEX – Holds Strong at 104.00, Watches US GDP Data
The US Dollar moved positively after the FED officials supported for rate neutral until the inflation came down to our target. Ahead of Q4 GDP 2023 data today, the US Dollar index moved positive against counter pairs.
USD INDEX is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
Investors await Q4 US GDP data as Federal Reserve officials’ hawkish remarks support the USD. DXY is currently at 103.95, up 0.12% today. Recent Fed comments advocate a cautious approach, emphasizing steady rate cuts. Policymakers, holding rates since 2001, await more data before considering a cut, with markets expecting one in June.
Tuesday’s data showed a 6.1% drop in US Durable Goods Orders in January. Focus remains on GDP, Goods Trade Balance, and Fed speeches on Wednesday, with the Core PCE Index on Thursday influencing trading around the Dollar Index.
GBPUSD – GBP Consolidates in Narrow Range, Attention Turns to US Data
War tensions are going to calm after the mutual agreement between Israel and Hamas working under progress from the US Side. So GBP Pairs moving upside against counter pairs.
GBPUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
GBP Stuck in Tight Range as Investors Eye BoE Rate Cuts Timing
The GBP/USD pair consolidates with limited upside due to anticipated BoE rate cuts, while correction in the USD caps the downside. Improved prospects of an Israel-Palestine ceasefire benefit risk-sensitive assets (GBP), pressuring safe-havens (USD).
This week, the US Dollar’s direction hinges on US Durable Goods Orders and core PCE price index data for January. A significant drop in the US core PCE index could raise expectations for early Federal Reserve (Fed) rate cuts.
Pound Sterling Consolidates Near 1.2700 Ahead of US Data
The Pound Sterling struggles to surpass the 1.2700 resistance, with uncertainty prevailing over the timing of Bank of England (BoE) rate cuts. BoE policymakers prioritize sustained evidence of inflation returning to the 2% target before considering rate adjustments. Speculators reduce bullish Pound Sterling positions, indicating a search for new catalysts. While BoE is expected to cut rates after the Federal Reserve, the UK’s economic outlook will influence the timing. Services PMI suggests a shallow recession in H2 2023, with a robust order book and improved business optimism pointing to a sharp recovery. CBI reports a slower decline in Retail Sales in February, reflecting improved consumer spending. In contrast, the US Dollar shows resilience despite a sharp decline in January’s Durable Goods Orders, falling by 6.1% against an expected 4.8% decrease.
AUDUSD – Australian January CPI: 3.4% YoY vs. Expected 3.5%
Australian CPI data for January came at 3.4% versus the 3.5% expected, and the same as the previous reading of 3.4%. Australian Dollar dropped down against counter pairs after the news flashed.
AUDUSD is moving in the Descending channel and the market has reached the lower low area of the channel
Australia’s January Consumer Price Index (CPI) reported a 3.4% year-on-year increase, consistent with the December annual rise, according to the Australian Bureau of Statistics on Wednesday. The market had anticipated a 3.5% increase during the reported period.
NZDUSD – Orr Speech: RBNZ Governor on Policy Outlook post-Interest Rate Hold
RBNZ Monetary Policy meeting outcome is Holding the interest rates at 5.50% and the rates are sufficient for the current scenario. Over-tightening measures will lead to a hard landing, So we approach for Soft landing on the inflation side versus rate hikes. NZ Dollar moved down after the holding of interest rates today.
NZDUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel
RBNZ Governor Adrian Orr Holds Press Conference After February Policy Meeting
Key Quotes:
– Discussed a potential rate hike.
– Consensus on sufficient current rates.
– Concerns persist about easing inflation.
– Domestic price pressures are easing as anticipated.
– Managing low productivity remains a challenge.
– Central banks might need higher rates than market expectations.
– Encourages competition among banks on mortgage rates.
– Adopts an asymmetric approach to inflation risk.
– Data provides more confidence in the outlook.
– Acknowledges a disinflationary period.
– Economy faces a soft landing scenario.
The Reserve Bank of New Zealand (RBNZ) maintains the Official Cash Rate (OCR) at 5.5%, marking the fifth consecutive steady decision. The press conference, addressing the monetary policy, could impact NZD volatility, influencing short-term trends.
RBNZ Interest Rate Meeting Minutes and Forecasts:
Meeting Minutes:
– Continued restrictive monetary policy is deemed necessary to prevent inflation expectations from rising.
– Significant easing of capacity pressures over the past year.
– Consensus on the need for sustained restrictive interest rates.
– Aggregate demand aligns better with the economy’s supply capacity.
– The starting point for capacity pressures is slightly lower than previously assumed.
– Limited capacity for the economy to absorb further upside inflation surprises.
– Recent drops in core inflation and business expectations are positive but still above the 2% mid-point target.
RBNZ Forecasts:
– Official cash rate expected at 5.59% in June 2024 (previously 5.67%).
– Official cash rate projected at 5.47% in March 2025 (previously 5.56%).
– TWI NZD around 71.5% in March 2025 (previously 70.7%).
– Annual CPI at 2.6% by March 2025 (previously 2.4%).
– Official cash rate forecasted at 5.33% in June 2025 (previously 5.42%).
– Official cash rate anticipated at 3.16% in March 2027.
XTIUSD – Yellen Global Outlook Favorable with Inherent Risks
XTIUSD Oil price has broken the Descending channel in upside
US Treasury Secretary Janet Yellen said Unlock the Frozen assets of $300 billion worth of Russia and use them for Ukraine’s supply of War needs. It is the strongest public idea given by Yellen in Sao Paulo Brazil meeting today. If the Israel – Gaza war increases then it will be harmful to the Global economy.
Yellen: Global Outlook Quite Favorable, Acknowledges Risks; Emphasizes G7 Cooperation on Russia Assets Issue
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