something interesting

<  BACK TO Market Analysis

Forex Today

FOREX_Market-today_Powell-in-focus_FXPIG

The FX markets witnessed a classic risk-off action in the NY session as fears of faster Fed rate hikes saw Dow take a 380 point drop. The American dollar strengthened against most majors and gold but suffered losses against the Japanese Yen. The Asian equities traded under pressure, however, the risk-off moves in FX markets stalled, possibly because some traders believe Fed chair Powell may change tune during his Senat appearance (due later today).

However, Powell was unambiguously optimistic about the health of the US economy on Tuesday. Further, the Fed is not particularly worried about the flattening yield curve. Hence, Powell will likely reiterate his strong views on the economy and reinforce expectations of three more Fed rate hikes this year. This, in turn, could yield another bout of sell-off in the risky assets.

Also, an above-forecast US Jan core personal consumption expenditure (due at 13:30 GMT) would add credence to Powell's confidence on inflation and open doors for a broad-based rally in the USD.

The anti-risk asset story does not end here. Reports hit the wires in Asia that the White House could announce tariffs on steel and aluminum later today. An official announcement could mark the beginning of a full-blown trade war with China and would only add to the bearish pressure around the risky assets. Amid all this, the European PMI numbers may receive less or no attention from the markets.

What's brewing in the majors?

EUR/USD - Double top bearish reversal has been confirmed. The 5-day moving average (MA) and 10-day MA are trending lower, indicating bearish setup. The relative strength index (RSI) also favors the bears. So, it appears the spot could test support at 1.2092 soon. On the higher side, only a close above 1.2355 would signal bearish invalidation.

GBP/USD - Cable's fall to a three-week low of 1.3743 was at least in part due to EU chief Brexit negotiator Barnier's Brexit warning. Complications on the Brexit front would force investors to price-in a delay in the Bank of England (BOE) rate hike. That said, on the daily chart, the Pound looks weak, courtesy of a bearish symmetrical breakdown and a downside break of the ascending trendline (drawn from the Nov. 14 low and Dec. 21 low). The 5-day MA and 10-day MA are sloping downwards in favor of the bears. The RSI is biased bearish. So, the currency is on the back foot ahead of the UK manufacturing PMI release. A big beat on expectations could yield a corrective rally in the Pound.

USD/JPY - Pair's decline from the Feb. 26 high of 107.68 to 106.54 (Asian session low) is discouraging for the bulls. However, the spot is holding above 106.38 (Feb. 26 low), meaning the pattern of higher lows is intact and the bulls could attack the descending trendline resistance if the risk assets stabilize.

Major news

  • The three-month dollar Libor rate hits 10-year high 
  • Australia seasonally adjusted capex estimate fell by 0.2% in Dec quarter
  • Australia: Q4 CAPEX suggests upturn in business investment - Westpac
  • Trump likely to announce tariff of 25% on Steel - Bloomberg
  • China's Caixin Manufacturing PMI surprises positively in Feb
  • BOJ's Kuroda - Wages and Inflation have been somewhat weak
  • BOJ's Kataoka calls for more easing to achieve inflation target
  • NZ: Fonterra boosts volumes offered at auction - BBG

Source:fxstreet.com

The FX markets witnessed a classic risk-off action in the NY session as fears of faster Fed rate hikes saw Dow take a 380 point drop. The American dollar strengthened against most majors and gold but suffered losses against the Japanese Yen. The Asian equities traded under pressure, however, the risk-off moves in FX markets stalled, possibly because some traders believe Fed chair Powell may change tune during his Senat appearance (due later today).

However, Powell was unambiguously optimistic about the health of the US economy on Tuesday. Further, the Fed is not particularly worried about the flattening yield curve. Hence, Powell will likely reiterate his strong views on the economy and reinforce expectations of three more Fed rate hikes this year. This, in turn, could yield another bout of sell-off in the risky assets.

Also, an above-forecast US Jan core personal consumption expenditure (due at 13:30 GMT) would add credence to Powell's confidence on inflation and open doors for a broad-based rally in the USD.

The anti-risk asset story does not end here. Reports hit the wires in Asia that the White House could announce tariffs on steel and aluminum later today. An official announcement could mark the beginning of a full-blown trade war with China and would only add to the bearish pressure around the risky assets. Amid all this, the European PMI numbers may receive less or no attention from the markets.

What's brewing in the majors?

EUR/USD - Double top bearish reversal has been confirmed. The 5-day moving average (MA) and 10-day MA are trending lower, indicating bearish setup. The relative strength index (RSI) also favors the bears. So, it appears the spot could test support at 1.2092 soon. On the higher side, only a close above 1.2355 would signal bearish invalidation.

GBP/USD - Cable's fall to a three-week low of 1.3743 was at least in part due to EU chief Brexit negotiator Barnier's Brexit warning. Complications on the Brexit front would force investors to price-in a delay in the Bank of England (BOE) rate hike. That said, on the daily chart, the Pound looks weak, courtesy of a bearish symmetrical breakdown and a downside break of the ascending trendline (drawn from the Nov. 14 low and Dec. 21 low). The 5-day MA and 10-day MA are sloping downwards in favor of the bears. The RSI is biased bearish. So, the currency is on the back foot ahead of the UK manufacturing PMI release. A big beat on expectations could yield a corrective rally in the Pound.

USD/JPY - Pair's decline from the Feb. 26 high of 107.68 to 106.54 (Asian session low) is discouraging for the bulls. However, the spot is holding above 106.38 (Feb. 26 low), meaning the pattern of higher lows is intact and the bulls could attack the descending trendline resistance if the risk assets stabilize.

Major news

  • The three-month dollar Libor rate hits 10-year high 
  • Australia seasonally adjusted capex estimate fell by 0.2% in Dec quarter
  • Australia: Q4 CAPEX suggests upturn in business investment - Westpac
  • Trump likely to announce tariff of 25% on Steel - Bloomberg
  • China's Caixin Manufacturing PMI surprises positively in Feb
  • BOJ's Kuroda - Wages and Inflation have been somewhat weak
  • BOJ's Kataoka calls for more easing to achieve inflation target
  • NZ: Fonterra boosts volumes offered at auction - BBG

Source:fxstreet.com

lastest Articles

Market Analysis
EUR/USD Forecast: Overbought, so what? Stimulus hopes blind investors' eyes (for now)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets cheer hopes of US stimulus deal, election polls in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold flirts with the $1,900 level in anticipation of news on the fiscal front
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Bulls are in control and eye 1.1795
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar retreats on fresh stimulus hopes, Brexit and coronavirus news eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Time running out for Trump
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Dead cat bounce could provide sell opportunity, euro faces three headwinds
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar dominates amid stimulus and Brexit uncertainty, ahead of US retail sales
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar finds its feet amid stalled stimulus talks, ahead of US data, EU Summit
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar’s haven demand back in vogue amid stimulus delay, vaccine trial pause
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD Price Forecast: Cautious ahead of key week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Analysis: Three factors why BTC is going to surge
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Yuan slumps on China’s policy move, coronavirus risk downs euro amid light trading
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Risk events galore
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: One more possibility around year-end for testing of 1.20 – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold looks to the upside ahead of Powell’s speech
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Cautious mood and “sell the fact” after Trump's discharge, stimulus news eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Markets hate uncertainty
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Euro attacks strong resistance, why this could be a fakeout
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: High hopes for US fiscal stimulus boost sentiment, NFP hints eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar rises after an ugly presidential debate, US data, end-of-month flows eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now looks to 1.1800 and above – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
S&P 500: Three critical policy disappointments behind the correction – Morgan Stanley
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin's mass adoption passes the point of no return
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar declines on hopes for a US fiscal deal, ahead of presidential debate
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Elections: A decisive Democratic victory to hit the USD – Nordea
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Bearish pressures mounting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar bulls take a breather amid an upbeat start to a Big week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Let the debates begin!
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Prediction: BTC slips into “Buy the Dip” Zone
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Eyes on August lows of $1863 ahead of US PMIs and round two Powell
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar’s haven demand in vogue ahead of a busy day
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold remains on track to test the August low of $1863
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Bears now eyeing a sustained break below 1.1700 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar buoyant ahead of Powell, UK PM Johnson’s COBRA meeting eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Futures: Still room for extra gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Further consolidation looks likely ahead of Fed speakers
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar sags amid fiscal overhang, mounting coronavirus risks
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – No ease up for Powell
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOE Quick Analysis: Bailey blasts sterling with specter of negative rates, why more falls are likely
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s De Guindos: Euro exchange rate is fundamental for inflation
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Fed drives dollar higher, gold and stocks lower, BOE, jobless claims eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold aims $1980 as focus shifts to Wednesday’s FOMC
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD to surge to 1.40 by September-2021 – UBS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Upbeat Chinese data boosts mood, Boris' bill passes first hurdle, Gold shines
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – More stimulus on the way?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB's Lane: Euro's rise dampens inflation outlook
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: King dollar holds the rein amid cautious optimism, eyes on US CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Euro set to fall? ECB expectations may be overconfident
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Brexit in deep crisis, vaccine hopes resurface, all eyes on the ECB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brent Oil resumes its core bear trend
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Muller: A timely exit from temporary emergency measures is important
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine trial halt exacerbates risk off mood, Brexit, BOC, and US fiscal talks eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD drops further and approaches $1,900/oz
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Update: BTC bulls ready to strike back once $11,000 is cleared
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Hard-Brexit fears pound the Pound, Dollar bid on US-Sino woes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD risks deeper pullback as 1.20 peak looks far
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Downside appears more compelling while below $1946 – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar stabilizes in the NFP aftermath, Oil tumbles amid holiday-thinned trading
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - Trump Closing the Gap
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold rebounds from weekly lows, turns neutral around $1945 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD trims losses and regains 1.1850 post-US ISM
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Fed's Williams: Policymakers seek inflation that targets 2% over time
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Cash Market Update: BCH fork is inevitable as Bitcoin ABC team separates from the project
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar climbs back from the abyss, ADP NFP, Fed speakers awaited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Bring on the Jobs Report
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Jackson Hole Goes Virtual
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - The focus remains on COVID-19, the Fed and Congress
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Gold up, dollar down amid stalled fiscal talks, vaccine hopes, ahead of jobless claims
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead- Is the economic recovery stalling?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar licking its wounds, gold gives ground, ahead of the all-important Fed decision
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – What more can the Fed do?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Market Update: BTC/USD hits a pause button before another bullish assault
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: Potential correction ahead of further gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: China's payback weighs on markets, boosts dollar, PMIs, coronavirus figures eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD: Technicals show bulls have the upper hand
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Correction in sight after reaching nine-year highs
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar licking its wounds, gold shines, US coronavirus cases eyed after Trump's U-turn
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold jumps to fresh multi-year tops, beyond $1820 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: EUR/USD sells the fact, Gold looking strong, Trump's coronavirus briefs make comeback
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Market Update: BTC fails to live up to the status of digital gold
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
S&P 500 Futures Price Analysis: Bears retain control after rejection at falling trendline resistance
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: EU leaders can’t reach an agreement on the EU rescue fund
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Focus remains on Virus Spread, Fiscal Stimulus, Rebounding data, and Earnings
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD continues to look at the 1.1495 March high
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
AUD/USD to remain resilient in the near-term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar dominates ahead of EU Summit, updated look at the US consumer amid rising cases
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold probes multi-day lows around $1,790/oz
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: A test of 1.1420 appears closer
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar seizes control as risk aversion returns, a busy docket ahead
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold to stay above $1800 fueled by lower real rates
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB expected to keep rates unchanged
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine, earnings optimism downs the dollar; eyes on COVID-19 stats, BOE’s Bailey
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Bring on Earnings Season
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Crude Oil Futures: Upside looks limited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Lagarde: Economic recovery would be constrained, uncertain and fragmented
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Gold eyeing $1,800, dollar mixed, as coronavirus, Hong Kong peg move markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Holds steady above $1775 level, bullish bias remains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOJ to project economic recovery in report next week – Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613