EURUSD
- ISM Services PMI Impact: The EUR/USD pair reached the area of two-week tops near 1.0880 on Tuesday, driven by the weaker-than-expected release of the US ISM Services Purchasing Managers' Index (PMI). However, the initial uptick faced resistance and lost momentum subsequently.
- USD Dynamics and Fed's Rate-Cut Path: Traders displayed hesitancy in making aggressive bearish bets on the US Dollar (USD). The market sentiment appeared cautious, with traders awaiting more clarity on the Federal Reserve's (Fed) stance regarding potential rate cuts. The path of the Fed's monetary policy was seen as a crucial factor influencing the EUR/USD pair.
- Jerome Powell's Testimony: The upcoming congressional testimony by Fed Chair Jerome Powell is highlighted as a key event likely to impact USD price dynamics. Traders anticipate Powell's remarks to provide insights into the Fed's future policy direction, potentially influencing the EUR/USD pair.
- US Macro Data: Traders looked ahead to Wednesday's US macroeconomic data, specifically the ADP report on private-sector employment and JOLTS Job Openings data. These indicators are expected to offer additional information about the health of the US labor market.
- ECB Meeting and NFP Report: The focus is set to shift towards the European Central Bank (ECB) meeting scheduled for Thursday. Additionally, the eagerly awaited Nonfarm Payrolls (NFP) report, a key indicator of US employment, is slated for release on Friday.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD pair experienced fluctuations, initially rising on weak US economic data but facing resistance later. Traders exercised caution in the face of uncertainties related to the Fed's rate-cut path. Attention was directed towards Jerome Powell's testimony, upcoming US macro data, the ECB meeting, and the NFP report, which were anticipated to influence the currency pair's dynamics.
GBPUSD
- Current Trading and Upside Momentum: GBP/USD is experiencing upward traction, trading above 1.2700 during the European session on Wednesday. The Pound Sterling is gaining ground against the US Dollar.
- Anticipation of UK Chancellor's Budget Report: The Pound remains expectant ahead of the UK Chancellor Jeremy Hunt's Budget Report. The market is likely to react to any announcements or developments in the report, contributing to the currency pair's dynamics.
- Disappointing US Economic Data: The US ISM Services Purchasing Managers Index (PMI) and Factory Orders both missed expectations on the previous day. The weaker-than-expected economic data could be influencing the performance of the US Dollar.
- Focus on Powell's Testimony and US Labor Figures: Powell's testimony is scheduled for both Wednesday and Thursday, attracting attention from traders. Additionally, significant US labor figures are expected this week, with ADP Employment Change figures forecasted to increase and Friday’s US Nonfarm Payrolls (NFP) expected to decline.
- Market Expectations for US Nonfarm Payrolls (NFP): The forecast for Friday's NFP report suggests an expected decline to 200K from the previous 353K. Revisions to previous prints are also anticipated, and these figures are likely to have an impact on GBP/USD.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD is on an upward trajectory, surpassing 1.2700. The Pound's performance is tied to expectations surrounding the UK Chancellor's Budget Report. Meanwhile, the US Dollar faces challenges in anticipation of Jerome Powell's testimony and critical US labour figures, with a focus on ADP Employment Change and the upcoming Nonfarm Payrolls (NFP) report.
GOLD
- Gold Price Movement: Gold prices are experiencing an upward movement during the Asian session on Wednesday, remaining in proximity to the all-time high reached in December 2023.
- US ISM Services PMI Data: On Tuesday, the US ISM reported that its Services Purchasing Managers' Index (PMI) slipped to 52.6 last month from 53.4 in January. This economic data may have implications for the broader market sentiment and influence gold prices.
- Market Expectations for Fed Rate Cuts: Current market sentiment suggests that there is approximately a 63% chance that the Federal Reserve (Fed) could begin easing rates in June. This probability is slightly lower than the 67% seen at the beginning of the week, according to the CME FedWatch Tool.
- Impact of Powell's Testimony: The next significant move in gold prices is anticipated to be influenced by Fed Chair Jerome Powell’s testimony. Traders will closely analyze his words for any fresh hints regarding the timing and scope of potential Fed rate cuts in the coming months.
- Upcoming Economic Data: The market will be keenly awaiting the release of the ADP Employment Change data and the JOLTS Job Openings survey. These figures are expected to provide fresh insights into the state of the US labor market and could trigger trading actions in both the US Dollar and the gold price.
Closing statement: Gold prices are on the rise, and the precious metal is hovering near its all-time high. The movement of gold is influenced by factors such as recent economic data, market expectations for Fed rate cuts, and, significantly, anticipation of Jerome Powell’s testimony. Traders are particularly focused on Powell's statements for insights into the potential timing and extent of any future Fed rate adjustments. Additionally, attention is directed towards upcoming employment data for further market direction.
CRUDE OIL
- WTI Oil Price Movement: West Texas Intermediate (WTI) oil prices are experiencing a slight increase after two consecutive negative sessions, trading near $78.60 per barrel on Wednesday.
- Demand Concerns: Concerns about demand are currently impacting Crude oil prices. Recent data indicating a slowdown in economic activity in the United States, the world's largest oil consumer, has contributed to the downward pressure on oil prices.
- Weaker US Dollar's Influence: The weaker US Dollar (USD) is expected to provide some support to oil prices. A weaker dollar can increase demand for commodities like oil from buyers using other currencies.
- Federal Reserve's Cautious Approach: Steven Friedman, a former New York Fed economist, has noted that Federal Reserve policymakers are likely to remain cautious about cutting interest rates in the current year. This caution is attributed to strong economic growth and volatile inflation.
- API Weekly Crude Oil Stock Data: The latest US API Weekly Crude Oil Stock data reported a build in stockpiles of 0.423 million barrels for the week ending on March 1. This contradicted market expectations of a decrease to 2.6 million barrels.
- Upcoming Focus on EIA Crude Oil Stocks Change: Traders are turning their attention to the upcoming release of the US Energy Information Administration (EIA) Crude Oil Stocks Change report scheduled for Wednesday. This report is expected to provide further insights into the dynamics of crude oil inventories.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices are showing a modest rebound after recent concerns about demand stemming from indications of economic slowdown in the US. The impact of a weaker US Dollar is expected to provide some support to oil prices. Traders are closely monitoring data, including the upcoming EIA Crude Oil Stocks Change report, to assess the inventory situation and to gauge the direction of oil prices in the short term.
DAX
- Services PMIs Influence: On Tuesday, the final Services PMIs for Germany and the Eurozone drew attention from investors. Upward revisions to preliminary PMIs suggested a potential shift in momentum. The German Services PMI increased from 47.7 to 48.3, surpassing the preliminary figure of 48.2. The Eurozone Services PMI rose from 48.4 to 50.2, exceeding the preliminary estimate of 50.0. Notably, the Eurozone PMI survey highlighted persistent wage growth pressures.
- German Trade Data: On Wednesday, German trade data is expected to be a focal point for investors. If there is another significant decline in both imports and exports, it could signal a prolonged economic recession, impacting market sentiment.
- Eurozone Retail Sales: Eurozone retail sales figures for January are anticipated to be influential, potentially aligning with or impacting European Central Bank (ECB) policy goals. Economists forecast a 0.1% increase in retail sales for January after a 1.1% decline in December.
- DAX Trends: Near-term trends for the DAX are likely to be influenced by external factors, particularly the testimonies of Fed Chair Jerome Powell and the ECB monetary policy decision. Traders will closely follow any hints or signals from these events for potential impacts on the German stock market.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX is navigating through recent Services PMI data, with upward revisions indicating a potential shift in momentum. German trade data and Eurozone retail sales figures will be closely monitored for their implications on economic conditions. External events, especially Fed Chair Powell's testimony and the ECB monetary policy decision, will likely play a significant role in shaping near-term trends for the DAX.