Sample Category Title

Daily Pivots: (S1) 1.0762; (P) 1.0782; (R1) 1.0820; More...

No change in EUR/USD and intraday bias remains neutral first. Further rally is in favor after receive support from 4 hour 55 EMA (now at 1.1755). Break of 1.0929 will extend the rise from 1.0515 to retest 1.1032 high. Firm break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level next. However, break of 1.0711 will turn bias to the downside to extend the corrective pattern from 1.1032 with another decline.

In the bigger picture, rise from 0.9534 (2022 low) is in progress with 38.2% retracement of 0.9534 to 1.1032 at 1.0460 intact. The strong support from 55 week EMA (now at 1.0623) was also a medium term bullish sign. Next target is 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidity the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 1.2240; (P) 1.2267; (R1) 1.2314; More...

GBPUSD is still bounded in range below 1.2342 and intraday bias stays neutral first. With 1.2177 minor support intact, further rally is expected. On the upside, break of 1.2342 will target 1.2445/6 resistance zone. Firm break there will resume larger rally from 1.0351, and target 1.2759 fibonacci level. On the downside, however, break of 1.2177 minor support will argue that corrective pattern from 1.2445 is extending with another falling leg, and turn bias to the downside for 1.2009 support instead.

In the bigger picture, price action from 1.2445 are seen as a corrective pattern to rise from 1.0351 medium term bottom (2022 low). Resumption of the rally from 1.0351 is expected and break of 1.2446 will target 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. This will remain the favored case as long as 38.2% retracement of 1.0351 to 1.2445 at 1.1645 holds.

As European treasury yields rebound, the Euro and Sterling gains against Dollar and Swiss Franc today. However, their upside remains limited by near term resistance. Also, momentum against commodity currencies appears less pronounced. The greenback is trading lower amid generally stabilizing risk sentiment, but market fluctuations remain limited, with European indexes and US futures fluctuating in a tight range between gains and losses.

Commodity currencies are holding their ground alongside the Yen, with traders likely awaiting the release of key economic data, such as US consumer confidence report, to make more significant moves. However, the most significant market impact is expected on Friday with the release of critical data, including Eurozone CPI and US PCE inflation.

Technically, EUR/CHF is worth a watch for the week. The corrective retreat from 0.9995 might have completed after defending 0.9837. Break of 0.9995 will resume the whole rise form 0.9704. More importantly, that would reaffirm the case that correction from 1.0095 has completed at 0.9704. Larger up trend from could be from 0.9407 could be ready to resume through 1.0095 in this case.

In Europe, at the time of writing, FTSE is down -0.02%. DAX is down -0.08%. CAC is down -0.09%. Germany 10-year yield is up 0.053 at 2.283. Earlier in Asia, Nikkei rose 0.15%. Hong Kong HSI rose 1.1%. China Shanghai SSE dropped -0.19%. Singapore Strait Times rose 0.51%. Japan 10-year JGB yield rose 0.0197 to 0.314.

US goods exports rose 5.5% yoy in Feb, imports dropped -1.9% yoy

In February, US goods exports rose 5.5% yoy to USD 167.8B. Goods imports dropped -1.9% yoy to USD 259.5B. Trade deficit widened slightly to USD -91.6B.

Whole sales inventories rose 0.2% mom to USD 920.3B. Retail inventories rose 0.8% mom to USD 747.3B.

BoE officials address credit conditions and interest rates amid market turmoil

BoE Governor Andrew Bailey acknowledged the existence of "some evidence of some tightening credit conditions" during today's parliamentary hearing, addressing concerns surrounding the current financial market turmoil. Despite the tightening, Bailey remains optimistic, stating that "we do not see a critical development in that respect."

The Governor emphasized that the BoE always considers credit conditions when setting monetary policy and expressed confidence in the bank's ability to assess the impact of raising interest rates on the position of the banks themselves.

Deputy Governor Dave Ramsden shared similar sentiments, acknowledging the importance of vigilance regarding the risks higher interest rates might pose to other parts of the economy. He added that the current environment is "volatile and challenging," highlighting the need for careful monitoring and assessment by central bank officials to ensure financial stability and well-informed policy decisions.

Australia retail sales turnover up 0.2% mom in Feb, appeared to have levelled out

Australia retail sales turnover rose 0.2% mom to AUD 35.14B in February, matched expectations. Through the year, retail sales rose 6.4% yoy.

Ben Dorber, ABS head of retail statistics, said retail sales rose modestly in February and appear to have levelled out after a period of increased volatility over November, December and January.

"On average, retail spending has been flat through the end of 2022 and to begin the new year."

Retail turnover rose modestly across most of the states and territories, with rises at 1.0% or less. Queensland recorded the only fall in turnover, down -0.4%.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2240; (P) 1.2267; (R1) 1.2314; More...

GBPUSD is still bounded in range below 1.2342 and intraday bias stays neutral first. With 1.2177 minor support intact, further rally is expected. On the upside, break of 1.2342 will target 1.2445/6 resistance zone. Firm break there will resume larger rally from 1.0351, and target 1.2759 fibonacci level. On the downside, however, break of 1.2177 minor support will argue that corrective pattern from 1.2445 is extending with another falling leg, and turn bias to the downside for 1.2009 support instead.

In the bigger picture, price action from 1.2445 are seen as a corrective pattern to rise from 1.0351 medium term bottom (2022 low). Resumption of the rally from 1.0351 is expected and break of 1.2446 will target 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. This will remain the favored case as long as 38.2% retracement of 1.0351 to 1.2445 at 1.1645 holds.

Economic Indicators Update

In February, US goods exports rose 5.5% yoy to USD 167.8B. Goods imports dropped -1.9% yoy to USD 259.5B. Trade deficit widened slightly to USD -91.6B.

Whole sales inventories rose 0.2% mom to USD 920.3B. Retail inventories rose 0.8% mom to USD 747.3B.

Full release here.

• AUDCAD reversed from support area
• Likely to rise to resistance level 0.9200

AUDCAD today reversed up from the support area located between the pivotal support level 0.9070 (which has been reversing the price from December), standing near the lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp impulse wave (1) from October.

The upward reversal from the support level 0.9070 is likely to form the daily Bullish Engulfing pattern today – the strong buy signal for this currency pair.

AUDCAD can then be expected to rise further toward the next resistance level 0.9200 (which stopped the earlier impulse wave 1).

• EURCAD reversed from support level 1.4740
• Likely to rise to resistance level 1.492

EURCAD today reversed up from the support area located between the key support level 1.4740 (previous resistance from the start of March), standing near the 38.2% Fibonacci correction of the previous upward impulse (iii).

The upward reversal from the support level 1.4740 stopped the previous minor ABC correction (iv).

Given the prevailing daily uptrend, EURCAD can then be expected to rise further toward the next resistance level 1.492 (top of the previous impulse wave (iii)).

Gold stormed $2000 twice last week, but both attempts failed to consolidate above this significant round level. The double correction since the previous week clears the way to the upside but does not signal that gold is in trouble.

The momentum of gold’s rally from the lows of the 8th pushed it up by over $200 at its peak, creating a short-term overbought situation. Last week, the brief touch below $1940 was too quick and impulsive to pave the way for upward movement.

The problems in the US and Europe caused gold and silver rallies as investors tried to park their capital quickly for fear of leaving their money in the banks. Such momentum is unlikely to be the basis for growth in the medium to long term, but changes in monetary policy could.

Last week, the Fed raised interest rates with one hand while handing out liquidity to banks with the other. These are incompatible policy moves, and now the balance of power is such that the Fed would prefer to stop raising rates so that it does not have to act repeatedly as a lender of last resort.

We saw a similar shift in Fed monetary policy in the past at the end of 2018, when the two-year gold rally began. The subsequent two-year sideways rally and pullback to $1600 have made gold attractive again for long-term buyers as a slowdown in the pace of Fed rate hikes looms on the horizon.

A change in the central bank’s rhetoric promises a fresh impetus for buying. At the last meeting, the FOMC raised rates, but Powell said in a press conference that banking problems were cooling the economy as much as policy tightening. Although we have not received formal confirmation, this has cleared the way for a rate change.

Gold’s long-term upside potential is close to $2640, representing 161.8% of the rally from the 2018 lows. Such an ambitious rally requires an impressive run-up, and we are likely witnessing one right now.

Of course, as always in such circumstances, we must be careful that the correction does not turn into a new downward spiral. Such a signal level could now be in the $1930 area. A break below $1900 could be the last nail in the coffin of gold’s bullish outlook, but it is an alternative scenario – not the main one.

Futures for Canada's main stock index rose on Monday, following positive global markets and gains in crude oil prices. First Citizens BancShares Inc's announcement of purchasing the loans and deposits of failed Silicon Valley Bank also boosted investor confidence in the global financial system. As a result, March futures on the S&P/TSX index were up 0.4% earlier, while crude oil prices gained more than 1%. We need to however evaluate the possibility of a sustained increase or a return to the bearish movement.

USDCAD

The Daily timeframe of USDCAD is currently showing signs of bullish strength. The Moving Averages are positioned in a way that indicates a bullish trend, with the 50-Day MA within reach as an area of support. To further strengthen the bullish sentiment, we also have the Fibonacci retracement levels, the drop-base-rally demand zone, and the break of the previous high at the 1.36700 area.

Analysts Expectations:

• Direction: Bullish
• Target: 1.39300
• Invalidation: 1.35600

NZDCAD

NZDCAD is currently trading inside a descending channel and has recently been rejected from the resistance trendline of the channel. The 50 and 100-day MAs are the only things that stand between where price is at the moment, and where I expect it to go in a few days. Once price breaks through the support trendline, and the 100-Day MA, it would sail very quickly toward the 200-Day MA.

Analysts Expectations:

• Direction: Bearish
• Target: 0.83000
• Invalidation: 0.85800

CADJPY

CADJPY has made an initial reaction away from the pivot zone marked by the rectangle. It also seems to have filled the volatility gap from the opening of the new week yesterday. Based on the 76% of the Fibonacci retracement, the trendline resistance, and the Moving Averages, it is safe to expect a bearish reaction from the markets.

Analysts’ Expectations:

• Direction: Bearish
• Target: 94.400
• Invalidation: 97.300

AUDCAD

After breaking below the trendline support of the ascending channel, price can be currently considered as making a bullish retracement into the Bearish Order block (supply zone) in order to find the required liquidity and momentum to push lower.

Analysts’ Expectations:

• Direction: Bearish
• Target: 0.90600
• Invalidation: 0.91505

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

The Australian dollar is trading at 0.6672 in Europe, up 0.39%. Australian retail sales posted a weak gain of 0.2% and the quarterly CPI release is next. The banking crisis has eased a bit and risk currencies like the Aussie are in positive territory today.

RBA keeping eye on retail sales and inflation ahead of rate meeting

The markets were braced for a sharp deceleration in retail sales for February, but the meagre 0.2% gain missed the estimate of 0.4% and follows a strong gain of a revised 1.8% in January. Consumers are holding tighter to their wallets as the double whammy of rising interest rates and high inflation has dampened consumer spending.

RBA Governor Lowe said that this week’s retail sales and inflation release will be key factors in the rate decision on April 4th. The strong drop in retail sales supports the case for the Reserve Bank of Australia to take a pause. As for inflation, it is expected to drop to 7.1% in February, down from 7.4% in February. If the release is higher than the forecast, the RBA will be under pressure to raise rates at next week’s meeting. Another factor that Lowe will have to consider is the banking crisis, as central banks will need to think twice before raising rates since it puts further stress on the banking system.

The Federal Reserve announces its rate decision on Wednesday and the fact that the meeting is a live one will add to the drama. Market pricing has swung wildly, as only a few weeks ago the markets expected a 50 bp hike. Throw in a nasty bank crisis, and currently, the markets are split between a 25 bp increase and a pause. In December, the Fed’s Summary of Economic Projections (SEP) which includes forecasts for interest rates and inflation. There has been a lot of market turbulence since then, and any revisions in the SEP could affect the movement of the US dollar.

AUD/USD Technical

• AUD/USD is testing resistance at 0.6676. Above, there is resistance at 0.6728.
• There is support at 0.6565 and 0.6402

European markets flashed green on Tuesday along with Asian equities as fears over a looming banking crisis eased.

A deal backed by U.S regulators for First Citizens Bank to purchase failed Silicon Valley Bank (SVB) has boosted global sentiment and cooled jitters over the banking sector. The renewed appetite for risk is likely to stimulate demand for global equities at the expense of safe haven assets. However, some caution still lingers from the recent market chaos and this could encourage investors to think twice before jumping on the risk train. U.S futures are pointing to a mixed open as market players await the Senate hearings on Silicon Valley Bank. Looking at commodities, gold struggled to nurse wounds from Monday’s selloff as easing bank fears dulled its allure.

This week, financial markets will focus on key inflation figures from across the globe, speeches by Fed officials, and the U.S Senate hearings on Silicon Valley Bank. Although some normality seems to be returning to markets, this could easily be disrupted by negative news or data that rekindle concerns not only over the banking sector but also inflation.

More Pain Ahead For USD?

The past few weeks have not been kind to the dollar.

It has weakened against most G10 currencies since the start of March thanks to growing expectations around the Federal Reserve slowing and eventually halting rate hikes in the face of the banking turmoil. Although fears of a full-blown crisis have cooled, markets still expect the Fed to cut its benchmark rates by 50 basis points by September.

These expectations could be intensified by the upcoming hearings on Silicon Valley Bank’s collapse and U.S inflation data on Friday. If the mid-week hearings before the House and Senate reveal fresh information on the chaos witnessed in the U.S banking sector, this could rekindle contagion fears, ultimately hitting the dollar as rate cut expectations mount. Regarding the inflation data, the Core PCE Deflator for February is expected to show inflation rising 4.7%, which would match January’s annual figure. Ultimately, a report that meets or prints below forecasts could fuel speculation around the Fed’s next move being a rate cut. Although the path of least resistance for the dollar is starting to point south, hawkish commentary from Fed officials could limit downside losses.

Currency spotlight: EURUSD

It could be a wild week for the EURUSD due to high-risk events and key inflation data.

The currency pair has kicked off the week on a positive note, pushing higher thanks to a weaker dollar. Given how the looming US Senate hearings and speeches from Fed officials mid-week will influence the dollar, this could translate to more volatility in EURUSD. Things could really spice up on Friday due to inflation data from the eurozone and the United States. Headline eurozone inflation is expected to fall sharply in March to 7.1% from 8.5% seen in the previous month. But the ECB is more focused on the core readings, so if these decline, this may weaken the euro as investors ponder whether the ECB may pause rate hikes down the road.

Looking at the technical picture, the EURUSD has the potential to push higher towards 1.09 if a solid daily close above the 1.08 level is achieved. Should bulls run out of steam, prices may slip back towards 1.0750 and 1.0710, respectively.

Commodity spotlight – Gold

Investor appetite for gold has been dampened by a combination of technical and fundamental forces.

After kissing the psychological $2000 level three times last week, bears have exploited this stubborn resistance to attack, with easing banking fears further dulling the metal’s safe haven allure. While prices could trade lower in the shorter term to medium term, the longer term still remains in favour of bulls due to expectations around the Fed cutting interest rates in September.

Looking at the technical picture, gold seems to be experiencing a pullback after failing to conquer the $2000 level. This could see the precious metal dip once again towards $1955 and $1935 before the bulls re-enter the scene. If prices break below $1925, gold is likely to test $1900.