EURUSD
Factory orders in Germany, Europe's largest economy, recorded a surprise increase of 1.0% on a monthly basis in January, but decreased by 10.9% on an annual basis. In the monthly survey published by the European Central Bank, expectations for consumer inflation fell in January. This decrease may increase the expectations that interest rate increases should slow down. Forecasts for economic growth rose in the survey. Fed Chairman J. Powell, in his presentation to the US Senate Banking Committee, stated that high inflation will cause them to increase interest rates more than they expected. With the rise in the dollar index, a sharp pullback was recorded in the parity.
Technical Analysis
| Support & Resistance | Level |
|---|---|
| Resistance 3 | 1.0795 |
| Resistance 2 | 1.0744 |
| Resistance 1 | 1.0648 |
| Support 1 | 1.0350 |
| Support 2 | 1.0448 |
| Support 3 | 1.0498 |
GBPUSD
According to the data of the British Retail Consortium (BCR), retail sales in the country increased by 5.2 percent in February this year compared to the same month of the previous year, but the increase was mostly due to the high inflation rate in recent months. BCR Chief Executive Helen Dickinson, whose evaluations were included in the BCR statement, said, “The vast majority of consumers are worried about increasing the upper limit on energy bills and taxes in April.” According to a survey conducted by Barclays, one of the country's leading banks, with 2,000 people, more than two-thirds of consumers are looking for ways to reduce their spending.
Technical Analysis
| Support & Resistance | Level |
|---|---|
| Resistance 3 | 1.2230 |
| Resistance 2 | 1.2147 |
| Resistance 1 | 1.1986 |
| Support 1 | 1.1499 |
| Support 2 | 1.1662 |
| Support 3 | 1.1743 |
XAUUSD
An ounce of gold has been hovering around $1850 for the last few days. However, yesterday's statements by Fed Chairman Powell caused gold to weaken as well. There were downward movements under ounce. Fed Chairman Powell made statements that were more hawkish than expected. He stated that there is a long way to go until inflation decreases, so they will continue to increase interest rates. Recently, the possibility of a 25-50 basis point rate hike for the Fed has been on the table. When these statements strengthened the probability of 50 basis points, there was a positive pricing in the dollar and negative in gold in the markets. The Fed's influence may continue today. Today will be the speech of Fed Chairman Powell and US data will be followed.
Technical Analysis
| Support & Resistance | Level |
|---|---|
| Resistance 3 | 1877 |
| Resistance 2 | 1864 |
| Resistance 1 | 1838 |
| Support 1 | 1761 |
| Support 2 | 1786 |
| Support 3 | 1800 |
BRENT OIL
Hawkish statements by Fed Chairman Powell also led to the retreat of oil prices. This morning, there seems to be some backlash. There are news feeds that support prices. In his statement, the OPEC Secretary General stated that they are quite optimistic and cautious with the opening of China. He shared his prediction that China's daily oil demand will increase by 500K and 600K barrels this year. The US Energy Information Administration announced that it has raised its world oil demand growth forecast for this year by 370,000 barrels to 1.48 million barrels per day. API weekly stocks fell by 3.8 mn barrels last week. The decrease in stocks is interpreted positively for oil.
S&P500
Short-term bond yields and the dollar rose and stock markets slumped after Fed Chairman Jerome Powell gave the message that they might have to raise rates more and perhaps faster than previously anticipated. Strategists began to evaluate that the Fed could raise interest rates up to 6 percent. The S&P 500 closed the session down 1.53% at 3,986. As of this morning, the outlook for the S&P 500 futures contract is at 3,990.
