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US Conference Board Consumer Confidence rose to 104.2 in March, surpassing the expected 101.7, and up from February's 103.4. The Present Situation Index dipped from 153.0 to 151.1, while the Expectations Index climbed from 70.4 to 73.0. Notably, the Expectations Index has remained below 80 for 12 of the past 13 months since February 2022, a level that often indicates an impending recession within the next year.

Ataman Ozyildirim, Senior Director of Economics at The Conference Board, said that the March gain "reflects an improved outlook for consumers under 55 years of age and for households earning $50,000 and over." However, he also noted that consumers are "slightly less optimistic about the current landscape," as the share of consumers stating jobs are "plentiful" declined and those saying jobs are "not so plentiful" increased.

Moreover, consumers' expectations of inflation over the next 12 months remain elevated at 6.3%. Purchasing plans for appliances continued to soften, while automobile purchases saw a slight increase. Despite the improvement in March, consumer confidence remains below the average level of 104.5 seen in 2022, indicating cautious optimism for the future.

Full consumer confidence release here.

Daily Pivots: (S1) 130.79; (P) 131.27; (R1) 132.06; More...

Intraday bias in USD/JPY remains neutral as consolidation from 129.62 is extending. Outlook remains bearish as long as 132.99 resistance holds. Break of 129.62 will target a test on 127.20 low. Decisive break there will resume larger decline from 151.93 to 61.8% projection of 151.93 to 127.20 from 137.90 at 122.61.

In the bigger picture, rebound from 127.20 should have completed at 137.90 as a corrective move. The down trend from 151.93 (2022 high) is still in progress. Break of 127.20 will resume this down trend and target 61.8% projection of 151.93 to 127.20 from 137.90 at 122.61. This will now be the favored case as long as 137.90 resistance holds.

Daily Pivots: (S1) 0.9140; (P) 0.9170; (R1) 0.9186; More...

Outlook in USD/CHF is unchanged and intraday bias stays neutral. Corrective pattern from 0.9058 low is in extending. Another rise cannot be ruled out, but upside should be limited by 0.9474 fibonacci level. On the downside, firm break of 0.9058 will resume larger down trend from 1.1046.

In the bigger picture, fall from 1.1046 (2022 high) should still be in progress with 38.2% retracement of 1.0146 to 0.9058 at 0.9474 intact. Prior rejection by 55 week EMA was a medium term bearish sign. Break of 0.9058 will resume such decline towards 0.8756 support (2021 low). But overall, this fall is still as a leg in the long term range pattern from 1.0342 (2016 high). So, downside should be contained by 0.8756 to bring reversal.

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.