XAUUSD Gold price is moving in the Box pattern and the market has reached the support area of the pattern
XAUUSD – Gold Price Reversal: XAU/USD Climbs Near $2,170
The Gold prices moved in Flat after the market reached the all time high of $2200 last week. FED Dovish remarks makes USD weaker against Gold. But Domestic data performing well in the US than FED expected. June month rate cuts is expected that will drive Gold prices higher and upcoming Q4 GDP data is look out for further moved from Gold.
Gold Prices Surge Near $2,170 Amid Weaker USD
Gold prices have surged to nearly $2,170 per troy ounce, reclaiming losses from the previous two sessions. The uptick in gold prices is attributed to a weaker US Dollar (USD), influenced by dovish sentiment surrounding the Federal Reserve’s stance on interest rate trajectory. Market expectations lean towards the Fed initiating interest rate cuts starting in June, boosting the appeal of bullion.
Federal Reserve Chair Jerome Powell’s remarks during a press conference further bolstered gold prices. Powell highlighted that an unexpected rise in unemployment could prompt the central bank to consider lowering interest rates. Additionally, he reassured markets that the Fed would not hastily respond to consecutive months of elevated inflation figures. Recent indications from Fed policymakers also suggest anticipation of interest rate reductions by three-quarters of a percentage point by the end of 2024, despite recent high inflation readings.
However, the decline in US yields signals a shift in investor sentiment towards US Treasury bonds, posing a challenge for non-yielding assets like gold. With the 2-year and 10-year yields on US Treasury bonds holding steady, investors may find the safety and stability of bonds more attractive compared to gold.
Upcoming US inflation readings, including Gross Domestic Product (GDP) data for Q4 2023 and the Personal Consumption Expenditures (PCE) price index report, are expected to significantly impact gold prices. Gold traders will closely monitor these releases for insights into inflationary pressures, which could influence gold prices accordingly.
EURUSD – Holds Above 1.0800 Amid Weak Dollar, Awaits US Data and Fed’s Bostic Speech
The ECB Governing Council member Edward Scicluna said ECB May be do rate cut in this April month. The Bundes Bank President Joachim Nagel said rate cuts from ECB is expected in June month. Any How, Rate cuts from ECB is negative for Euro against counter pairs.
EURUSD is moving in the Symmetrical triangle pattern and the market has reached the Bottom area of the pattern
EUR/USD Starts Week Above 1.0800 Amid Weak Dollar, Eyes on US Data and Fed’s Bostic Speech
EUR/USD begins the week positively above 1.0800, supported by a softer US Dollar (USD). Key events this week include German February Retail Sales and US Gross Domestic Product (GDP) growth figures for Q4. At present, EUR/USD trades at 1.0816, up 0.08% for the day.
The Federal Open Market Committee (FOMC) maintained rates at 5.25–5.50% for a fifth consecutive meeting. Chair Powell noted that despite elevated CPI inflation data, if labour market conditions worsened unexpectedly, the central bank would be prepared to cut rates. The FOMC kept its 2024 median dot outlook at 4.625%, signaling three potential rate cuts this year. Dovish comments from Fed officials could weigh on the USD and limit EUR/USD downside.
On the European front, ECB Governing Council member Edward Scicluna suggested an interest-rate cut from the ECB as early as April might be necessary. Bundesbank President Joachim Nagel hinted at a possible ECB rate cut before summer, potentially in June, as inflation inches towards the 2% target. Speculation of ECB rate cuts, similar to the recent move by the Swiss National Bank, weighs on the EUR against the USD.
Upcoming events include the Chicago Fed National Activity Index, US New Home Sales for February, and Fed’s Bostic speech on Monday. Thursday will see the release of German Retail Sales and US Q4 GDP Annualized growth data, with the US economy expected to expand by 3.4%.
USDJPY – Standard Chartered: Weak JPY Post Rate Hike Should Spur Further BoJ Hikes
The Standard Chartered Bank said The BoJ hiked interest rate at last week is Double Edge sword for the Economy. The interest rate have Narrow Gap between BoJ and FED, this is not healthier for imports for Japan. This rate hike supports Exports and Stock market but it will hurt import prices and consumer purchasing power.
USDJPY is moving in ascending triangle pattern and the market has reached the resistance area of the pattern
Weak JPY Post BoJ Rate Hike: A Double-Edged Sword
Following the Bank of Japan’s (BoJ) rate hike, the Japanese Yen (JPY) weakened, prompting economists at Standard Chartered to observe its implications. The current weakness of the JPY presents a conundrum: while it has fueled Japan’s export growth and bolstered equity market performance, it has also heightened imported price pressures.
Achieving JPY appreciation against the USD would necessitate a narrower interest rate gap between the US and Japan, a factor influenced by Fed policy decisions. This delicate balance underscores the complexity of the situation.
The weak JPY may become a focal point for the BoJ in future policy decisions, as it seeks to stabilize import prices and protect consumers’ purchasing power amidst ongoing economic dynamics.
USDCAD – Steady Around 1.3600 Amid Rising Crude Oil Prices
The Bank of Canada Deputy Governor Toni Gravelle said that BoC will end total rate hikes by 2025. Rate cuts will be there if inflation target 2% will be achieved. Oil Prices only triggered the Canadian Dollar to higher against counter pairs.
USDCAD is moving in an Ascending channel and the market has reached the higher high area of the channel
USD/CAD Holds Positive Ground near 1.3600 Amid Market Dynamics
The USD/CAD maintains a positive position after trimming some gains on Monday. The pair hovers around 1.3600 during the Asian trading session, influenced by hawkish comments from Federal Reserve Bank of Atlanta President Raphael Bostic. Bostic’s adjustment of interest rate cut projections to one, citing inflation and economic strength, impacts the pair’s movement.
Meanwhile, the Canadian Dollar (CAD) faces pressure as the Bank of Canada (BoC) hints at potential rate cuts in 2024, as indicated in its meeting minutes. Deputy Governor Toni Gravelle reaffirms the bank’s quantitative tightening intentions by 2025, bolstering the CAD amidst rate reduction plans.
Support from higher crude oil prices aids the CAD, restraining losses for the USD/CAD pair. Additionally, strong Canadian Retail Sales data contributes to CAD strength.
While US Treasury yields hold steady, the US Dollar Index (DXY) nears 104.40, failing to find support despite the uptick in yields. Federal Reserve Chair Jerome Powell’s remarks about potential interest rate adjustments and cautious approach to inflation further impact market sentiment.
Investors await the release of US fourth-quarter GDP data and Canadian January GDP figures, expected to influence USD/CAD movements in the coming days.
USD INDEX – Bostic Forecasts Only One Rate Cut This Year
The FED Atlanta president Raphael Bostic said, FED going to do one rate cut in this year in my view. Growth of US economy will be 2% and unemployment steady at 3.9%. Inflation lower and spending higher will be positive for US People in current scenario.
USD Index is moving in an Ascending channel and the market has reached the higher low area of the channel
Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic revised his rate cut forecast, now expecting only one cut this year due to persistent inflation and stronger-than-expected economic data.
Key points from Bostic:
– He doubled his GDP growth estimate to 2% due to the economy’s resilience.
– Unemployment remains steady at 3.9%, which was previously considered inflationary.
– Inflation is decreasing but at a slower rate than expected, with many items experiencing significant price increases.
– Bostic sees the current economic conditions as positive, with growth above potential and moderating inflation.
EURCHF – Franc Faces Continued Downward Pressure Against Euro – Commerzbank
The SNB is the First central bank among G10 peers cut the 25bps rate cut last week. This rate cut will increase the Euro currency against Swiss Franc. ECB still have higher rates when compared to SNB.
EURCHF is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
The Swiss National Bank (SNB) took the financial markets by surprise when it announced a 25 basis points reduction in its key interest rate to 1.50%. This unexpected move triggered a significant sell-off in the Swiss Franc (CHF), catching many market participants off guard.
In response to this development, economists at Commerzbank have conducted an analysis of the outlook for the Swiss Franc. They point out that while the SNB has opted for a rate cut, it may have limited room to further lower interest rates compared to other central banks, given that it has not raised rates substantially in the past.
However, the future trajectory of the Swiss Franc will depend on various factors. If the European Central Bank (ECB) proceeds with multiple interest rate cuts as speculated, the SNB’s initial rate cut may be sufficient to maintain price stability, potentially leading to a strengthening of the Franc.
Nonetheless, the situation remains fluid, and much will hinge on future developments, particularly regarding inflation trends. Should inflation continue to decline, there is a possibility that the SNB may opt for additional rate cuts in the future.
In light of these considerations, the assessment from Commerzbank suggests that, for the time being, the Swiss Franc is likely to face downward pressure against the Euro.
GBPUSD – Holds Above 1.2600, Awaits Fed and BoE Speeches
Last week GBP retail sales came at Flat for the February month makes cool for GBPUSD pair. Even though last 2 quarters of 2023 came at negative GDP data of technical recession of UK, Retail sales retrieved from lows is appreciated for GBP against counter pairs. This week GBP Q4 GDP is expected to increase at 0.30% QoQ and 0.20% YoY is expected.
GBPUSD is moving in the Box pattern and the market has reached the support area of the pattern
GBP/USD Holds Above 1.2600, Eyes Fed and BoE Speeches
During the early European session on Monday, the GBP/USD pair maintains positive ground above the 1.2600 psychological support. Supported by a weaker US Dollar (USD) and lower US Treasury bond yields, the major pair rebounds. Investors are awaiting the release of Gross Domestic Product (GDP) data from the UK and US on Thursday for potential market-moving catalysts. Currently, GBP/USD trades at 1.2605, up 0.03% on the day.
Recent data from the Office for National Statistics indicated that UK Retail Sales in February performed better than expected, remaining flat. This positive figure suggests signs of economic recovery following the UK’s technical recession last year. Market focus will shift to UK GDP growth numbers on Thursday, expected to contract by 0.3% QoQ and 0.2% YoY in the fourth quarter. Stronger-than-expected data may bolster the Pound Sterling (GBP) and support further gains in the GBP/USD pair.
Conversely, renewed expectations of the Federal Reserve (Fed) initiating interest rate cuts in June could limit the upside for the Greenback.
Fed Chairman Jerome Powell reiterated last week the possibility of rate cuts if economic growth continues. According to CME Group’s FedWatch tool, there is a 74.5% probability of a rate cut at the June meeting.
Key events to watch include the Chicago Fed National Activity Index and US New Home Sales for February on Monday, along with speeches from Fed’s Raphael Bostic and BoE’s Catherine Mann. Thursday will see the release of UK and US GDP growth data, providing potential direction for the GBP/USD pair.
AUDUSD – AUD Trims Gains, Awaits Consumer Confidence
The Australian Dollar moved flat ahead of Australian CPI data and West pac consumer confidence data scheduled this week. Last week Employment data boosted the Australian Economy and RBA holding rates makes Positive for Australian Dollar. Energy and Mining sectors recovery on thetrack due to PBoC keep higher its rates on monetary policy settings last week.
AUDUSD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
AUD Rebounds Despite Lower USD, Eyes CPI and US GDP
The Australian Dollar (AUD) rebounds at the start of the week, recovering from previous losses. Despite a slight decline in the US Dollar (USD) and higher US Treasury yields, the AUD/USD pair trades higher on Monday. Investors await key data releases including the Australian monthly Consumer Price Index (CPI) for February and the US Gross Domestic Product (GDP) for Q4 2023.
The AUD gains momentum as the ASX 200 Index extends its winning streak, driven by strong performances in the mining and energy sectors. Additionally, the Aussie Dollar is supported by a stronger Chinese Yuan (CNY), with the People’s Bank of China (PBoC) setting the mid-rate for the onshore yuan higher than expected.
Meanwhile, the US Dollar Index (DXY) corrects after hitting a five-week high in the previous session. Expectations for the start of the Federal Reserve (Fed) easing cycle in June, based on ongoing US data, could put downward pressure on the USD. Fed Chairman Jerome Powell has indicated that the central bank will not react hastily to recent inflation increases.
Key Market Updates:
– Australian Employment Change for February surpasses expectations at 116.5K, with a lower Unemployment Rate of 3.7%.
– Australia’s government pledges to support a minimum wage increase aligned with inflation.
– China’s Premier Li Qiang highlights the nation’s low inflation rate and central government debt ratio, signaling room for macroeconomic policy adjustments.
– Federal Reserve Bank of Atlanta President Raphael Bostic revises his interest rate cut forecast to one for this year, citing persistent inflation.
– S&P Global Services PMI shows slight decreases in March, while Manufacturing PMI rises above expectations.
– Initial Jobless Claims for the week ending on March 15 come in below expectations at 210K.
NZDUSD – Gains Below 0.6000 Barrier Amid Weaker USD
The IMF Projected the New Zealand Economy inflation target of 1-3% will come in Third quarter of 2024. RBNZ will do rate cuts if inflation rate come to target of 2%.
NZDUSD has broken the Ascending channel in downside
NZD/USD Gains Below 0.6000 Barrier on Weaker USD
Following the March meeting last week, where the Federal Reserve (Fed) maintained the benchmark rate, Fed Chairman Jerome Powell emphasized a potential interest rate cut later this year, pending greater confidence in inflation moving towards its 2% target. Dovish remarks from Fed officials could weigh on the USD, providing support for the NZD/USD pair in the near term.
Fed Bank of Atlanta President Raphael Bostic’s revised forecast suggests only one interest rate cut this year instead of the previously anticipated two, citing persistent inflation and stronger-than-expected economic data.
On the Kiwi front, the International Monetary Fund (IMF) suggests that the Reserve Bank of New Zealand may have room to start cutting interest rates later this year as inflation returns to its target band.
Upcoming events, including the release of the Chicago Fed National Activity Index, US New Home Sales for February, and Fed’s Bostic speech on Monday, followed by Durable Goods Orders on Tuesday, and US Gross Domestic Product Annualized on Thursday, will guide traders’ decisions and present trading opportunities around the NZD/USD pair.
XTIUSD – WTI Rises Above $81.00 Amid Weaker Dollar
The EIA Energy Information Agency said Global oil demand will be increased higher in 2024 due to OPEC+ nations have chances to cut more barrels per day in coming months. Geopolitical tensions made More sea routes rerouted from Red Sea and makes long travel and operating costs is higher. Other side China facing economy pressure from Covid-19 and less demand of Oil makes Oil prices lower.
XTIUSD Crude Oil price is moving in an Ascending channel and the market has fallen from the higher high area of the channel.
WTI Trades Above $81.00 Amid Weaker Dollar and IEA Outlook
WTI, the US crude oil benchmark, hovers around $81.00 on Monday, driven by a softer US Dollar (USD) and revised demand projections from the International Energy Agency (IEA).
The IEA’s forecast of reduced global oil production for the rest of 2024, coupled with OPEC+’s extension of voluntary production cuts, boosts WTI prices. Anticipated draws on stockpiles throughout the year may further support prices. Additionally, geopolitical tensions in the Middle East, leading to rerouted ships and increased costs, contribute to price hikes.
However, concerns about weaker economic growth in major countries could dampen oil demand and pressure WTI prices downward. Market focus remains on US Gross Domestic Product Annualized (GDP) data for Q4, expected on Thursday, with projections suggesting steady growth at 3.2%.
The Federal Reserve’s decision to maintain rates and signal potential rate cuts in 2024 could impact WTI prices. Any hawkish remarks or a higher-for-longer rate narrative may limit price gains by reducing demand for oil due to increased costs.
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