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Forex News Timeline

Friday, February 26, 2021

more to come

Gold (XAU/USD) has been extending its downfall as elevated bond yields make the precious metal – which provides no returns – less attractive.  According to the charts, gold is changing hands at the lowest levels since late June 2020 – the lowest in eight months. more to come

The data published by the ISM-Chicago showed on Friday that the Chicago Purchasing Managers' Index (PMI) in February dropped to 59.5 from 63.8 in Janu

Chicago PMI falls more than expected in January.US Dollar Index holds in the positive territory above 90.50.  The data published by the ISM-Chicago showed on Friday that the Chicago Purchasing Managers' Index (PMI) in February dropped to 59.5 from 63.8 in January. This reading came in worse than the market expectation of 61.1 and showed that the economic activity continued to expand at a softer pace. Market reaction This data doesn't seem to be having a significant impact on the greenback's performance against its rivals. As of writing, the US Dollar Index was up 0.45% on a daily basis at 90.54.

EUR/USD remains immersed in the negative territory and hovers around the 1.2100 zone at the end of the week. EUR/USD looks to US data EUR/USD looks to

EUR/USD manages to rebound from the 1.2090 area.US Core CPI rose at an annualized 1.5% in January.The U-Mich index will close the daily docket later.EUR/USD remains immersed in the negative territory and hovers around the 1.2100 zone at the end of the week. EUR/USD looks to US data EUR/USD looks to extend the bounce off daily lows in the 1.2090 zone against the backdrop of a strong buying interest surrounding the greenback. In fact, the risk-off mood irrupted on Friday in response to the sharp pick up in US yields as market participants see the probability of higher inflation as a result of the planned extra fiscal stimulus under the Biden’s administration. In the euro docket, France’s flash CPI is expected to contract 0.1% MoM in February, while Spanish consumer prices are seen contracting 0.6% from a month earlier. In addition, ECB’s Schnabel is due to speak, and the European Council will enter its final 2-day meeting. Data wise in the US, headline PCE and Core PCE rose at a monthly 0.3% in January and 1.5% from a year earlier. Results from the advanced Trade Balance noted the trade deficit is seen at $83.74 billion during last month while Personal Income expanded 10.0% MoM in the first month of the year and Personal Spending expanded 2.4% inter-month. What to look for around EUR EUR/USD’s rally finally surpassed the 1.2200 barrier, although the move run out of steam in the 1.2240 region on Thursday. The underlying bullish sentiment in the euro remains under pressure for the time being amidst investors’ adjustment to potential US inflation and the subsequent increase in yields and the demand for the dollar. Looking at the medium/longer-run, the outlook for the pair remains constructive on the back of prospects of extra fiscal stimulus in the US, real interest rates favouring Europe vs. the US and hopes of a solid economic rebound in the next months.Key events in Euroland this week: European Council meeting (Thursday and Friday). ECB’s Lagarde will participate in the G20 meeting of central bank governors and finance ministers on Friday.Eminent issues on the back boiler: EUR appreciation could trigger ECB verbal intervention, always on inflation issues. EU Recovery Fund. Huge long positions in the speculative community. EUR/USD levels to watch At the moment, the index is losing 0.35% at 1.2124 and faces immediate contention at 1.2092 (low Feb.26) followed by 1.2023 (weekly low Feb.17) and finally 1.2016 (100-day SMA). On the upside, a breakout of 1.2243 (weekly high Dec.17) would target 1.2349 (2021 high Jan.6) en route to 1.2413 (monthly high Apr.17 2018).

United States Chicago Purchasing Managers' Index registered at 59.5, below expectations (61.1) in February

Following Thursday's steep decline, major equity indexes started the last trading day of February in the positive territory as the pullback in US Trea

Wall Street's main indexes trade in the positive territory on Friday.Energy shares suffer heavy losses amid falling crude oil prices.Risk-sensitive technology stocks gain traction on upbeat market mood.Following Thursday's steep decline, major equity indexes started the last trading day of February in the positive territory as the pullback in US Treasury bond yields seems to be providing a boost to market sentiment. As of writing, the Dow Jones Industrial Average was posting small daily gains at 31,352, the S&P 500 Index was up 0.4% at 3,843 and the Nasdaq Composite was rising 1.1% at 12,964. Reflecting the positive shift in market sentiment, the CBOE Volatility Index (VIX), Wall Street's fear gauge, is down 4.6% on the day. Among the 11 major S&P 500 sectors, the risk-sensitive Technology Index is up more than 1% as the best performer in the early trade. On the other hand, the Energy Index is losing nearly 2% pressures by a 1.33% drop in US crude oil prices. Later in the session, the University of Michigan's Consumer Sentiment Index will be looked upon for fresh catalysts. Earlier in the day, the US Bureau of Economic Analysis reported that Personal Income and Personal Spending in January rose by 10% and 2.4%, respectively. S&P 500 chart (daily)

The USD/CAD pair gained traction for the second consecutive session on Friday and built on the previous day's solid rebound from three-year lows. The

USD/CAD gained traction for the second straight day and recovered further from multi-year lows.The momentum stalled near a descending trend-line/50% Fibo. confluence barrier near 1.2685.Mixed technical indicators on hourly/daily charts warrant caution for aggressive bullish traders.The USD/CAD pair gained traction for the second consecutive session on Friday and built on the previous day's solid rebound from three-year lows. The momentum pushed the pair to fresh weekly tops, albeit stalled near the 1.2685 confluence hurdle. The mentioned region marks the 50% Fibonacci level of the 1.2882-1.2468 and monthly descending trend-line. This should now act as a key pivotal point for short-term traders and help determine the USD/CAD pair's next leg of a directional move. Meanwhile, bullish technical indicators on hourly charts support prospects for additional gains. That said, oscillators on the daily chart – though have been recovering from the bearish territory – are yet to confirm a near-term positive bias. This makes it prudent to wait for a sustained strength beyond the mentioned confluence barrier before confirming that the USD/CAD pair might have bottomed out in the near-term. This, in turn, will set the stage for a further appreciating move. The USD/CAD pair might then surpass the 1.2700 mark and aim to test the 61.8% Fibo. level, around the 1.2725-30 region. The momentum could further get extended towards the 1.2775 intermediate resistance en-route the 1.2800 round-figure mark. On the flip side, the 1.2600 mark now seems to protect the immediate downside. This is followed by support near the 23.6% Fibo. level, around the 1.2570-65 region, which if broken decisively will negate any positive outlook for the USD/CAD pair. USD/CAD 4-hourly chart Technical levels to watch  

The US Dollar Index (DXY), which gauges the buck vs. a basket of its main rivals, keeps the bid tone unchanged around 90.60 on Friday. US Dollar Index

DXY trades on a firm note in the 90.60 region.US Core PCE rose 0.3% MoM, 1.5% YoY in January.US final February Consumer Sentiment next on tap.The US Dollar Index (DXY), which gauges the buck vs. a basket of its main rivals, keeps the bid tone unchanged around 90.60 on Friday. US Dollar Index meets daily resistance near 90.80 The index reverses Thursday’s losses and advances well above 90.00 the figure on the back of the strong rebound in yields of the US 10-year benchmark. In fact, the move to levels last seen around a year ago in yields of the 10-year Treasuries sustained the strong comeback in the index from sub-90.00 levels on Thursday and allowed for the move to multi-day peaks in the 90.75/80 band on Friday. In the docket, US inflation gauged by the headline PCE and Core PCE rose at a monthly 0.3% in January and 1.5% from a year earlier. Additional data saw the advanced trade deficit expected at $83.74 billion during last month while Personal Income expanded 10.0% MoM in the first month of the year and Personal Spending expanded 2.4% inter-month. Closing the calendar will come the final Consumer Sentiment gauge measured by the U-Mich index. What to look for around USD The index manages to retake the 90.00 yardstick and well above following multi-week lows near 89.70 on Thursday. The reversion of the weekly drop came in tandem with the strong bounce of yields to levels last recorded a year ago. While the reflation/vaccine trade continues to keep bullish attempts in the buck contained, bouts of concerns regarding a pick-up in inflation (and inflation expectations) stemming from the expected extra fiscal stimulus could provide some pockets of strength in the dollar for the time being. Against this, occasional upside in the buck should remain short-lived amidst the broad-based bearish outlook for the currency in the medium/longer-term. This, in turn, is propped up by the reinforced mega-accommodative stance from the Fed until “substantial further progress” is seen, persistent chatter of extra fiscal stimulus and prospects of a strong recovery in the global economy, which are all seen underpinning the better sentiment in the risk complex.Key events in the US this week: PCE figures and the final February U-Mich print are all due on Friday.Eminent issues on the back boiler: US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? Future of the Republican party post-Trump acquittal. US Dollar Index relevant levels At the moment, the index is gaining 0.47% at 90.55 and a breakout of 90.77 (weekly Feb.26) would open the door to 91.05 (weekly high Feb.17) and finally 91.60 (2021 high Feb.5). On the other hand, the next support emerges at 89.68 (weekly low Feb.25) seconded by 89.20 (2021 low Jan.6) and then 88.94 (monthly low March 2018).

Prices for products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), rose by 2% in January, the data published by Sta

Raw Materials Price Index in Canada rose sharply in January.USD/CAD continues to trade in the positive territory.Prices for products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), rose by 2% in January, the data published by Statistics Canada showed on Friday. This reading followed December's increase of 1.5%. Further details of the publication revealed that the Raw Materials Price Index increased by 5.7% during the same period. Market reaction The USD/CAD pair edged slightly lower from the daily highs after this report and was last seen gaining 0.26% on the day at 1.2632.

Bank of England (BoE) Deputy Governor Dave Ramsden said on Friday that they see risks to inflation broadly balanced, as reported by Reuters. Additiona

Bank of England (BoE) Deputy Governor Dave Ramsden said on Friday that they see risks to inflation broadly balanced, as reported by Reuters. Additional takeaways " We are seeing a reflation trade, especially driven by the US." "I see market moves as a reflation trade, not an inflation trade." "Whatever measure you look at, UK inflation expectations are well anchored." "Pick-up in UK gilt yields is a corollary of more positive news in the economy, not inflation worry." "There will be a high bar to unwinding UK monetary easing." "We do keep a close eye on markets, there has been volatility in recent days." "Gilt market functioning is orderly as of now." Market reaction The GBP/USD pair showed no immediate reaction to these comments and was last seen losing 0.5% on the day at 1.3945.

The international trade deficit of the US expanded by $0.5 billion to $83.7 billion in January, the data released by the US Census Bureau showed on Fr

US' Goods Trade Balance declined to -$83.7 in January.US Dollar Index stays above 90.50 after the data. The international trade deficit of the US expanded by $0.5 billion to $83.7 billion in January, the data released by the US Census Bureau showed on Friday. "Exports of goods for January were $135.2 billion, $1.9 billion more than December export," the publication further read. "Imports of goods for January were $218.9 billion, $2.5 billion more than December imports." Finally, Wholesale Inventories in the same period increased by 1.3%. Market reaction The US Dollar Index showed no immediate reaction to this report and was last seen gaining 0.47% on the day at 90.55.

Gold maintained its offered tone through the early North American session and was last seen hovering around the $1763 region, just above eight-month l

A broad-based USD strength exerted some pressure on gold for the second straight day.The risk-off mood, a modest pullback in the US bond yields helped limit any further losses.The yellow metal had a rather muted reaction to the release of the US Core PCE Price Index.Gold maintained its offered tone through the early North American session and was last seen hovering around the $1763 region, just above eight-month lows touched earlier this Friday. The precious metal extended this week's rejection slide from 200-day EMA and witnessed some follow-through selling on the last trading day of the week. The downfall was exclusively sponsored by a strong bid tone surrounding the US dollar, which tends to drive flows away from the dollar-denominated commodity. The USD added to the previous day's solid gains led by a sharp rise in the US Treasury bond yields. The US bond market has been reacting to the prospects for a strong global economic recovery amid the progress in COVID-19 vaccinations and US President Joe Biden's proposed $1.9 trillion pandemic relief package. The reflation trade further forced investors to price in an uptick in inflation, which was reinforced by Friday's macro data. The US Bureau of Economic Analysis reported that the Core PCE Price Index remained unchanged at 1.5% on a yearly basis in January as against market expectations for a modest downtick to 1.4%. Meanwhile, the negative factor, to some extent, was offset by a mixed performance in the equity markets, which extended some support to the safe-haven XAU/SUD. This, along with a modest pullback in the US bond yields, helped limit any further losses for the non-yielding yellow metal, at least for the time being. That said, the near-term bias remains tilted in favour of bearish traders and supports prospects for further weakness. Hence, a subsequent break below the $1750 intermediate support, en-route the $1725-24 intermediate support and the $1700 mark, remains a distinct possibility. Technical levels to watch  

The data published by the US Bureau of Economic Analysis showed on Friday that Personal Income in the US grew by 10% in January following December's i

Personal Income in US rose sharply in January.US Dollar Index clings to strong daily gains above 90.60.The data published by the US Bureau of Economic Analysis showed on Friday that Personal Income in the US grew by 10% in January following December's increase of 0.6%. This reading came in slightly better than the market expectation of 9.5%. Further details of the publication revealed that Personal Spending increased by 2.4% in the same period following December's contraction of 0.4% and came in slightly worse than analysts' estimate of 2.5%. Market reaction These figures don't seem to be having a significant impact on the USD's performance against its major rivals. As of writing, the US Dollar Index was up 0.55% on the day at 90.63.

United States Personal Consumption Expenditures - Price Index (YoY) registered at 1.5% above expectations (1.1%) in January

The Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, remained unchanged at 1.5% on a yearly basis in

The Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, remained unchanged at 1.5% on a yearly basis in January, the US Bureau of Economic Analysis reported on Monday. This reading came in slightly higher than the market expectation of 1.4%. On a monthly basis, the Core PCE Price Index arrived at 0.3%. The PCE Price Index, which includes food and energy prices, was 0.3% and 1.5% on a monthly and yearly basis, respectively. Market reaction The US Dollar Index showed no immediate reaction to this report and was last seen gaining 0.55% on the day at 90.60.

United States Personal Spending below expectations (2.5%) in January: Actual (2.4%)

United States Personal Consumption Expenditures - Price Index (MoM) in line with forecasts (0.3%) in January

United States Core Personal Consumption Expenditure - Price Index (YoY) came in at 1.5%, above forecasts (1.4%) in January

United States Core Personal Consumption Expenditure - Price Index (MoM) above expectations (0.2%) in January: Actual (0.3%)

United States Wholesale Inventories increased to 1.3% in January from previous 0.3%

United States Personal Income (MoM) came in at 10%, above forecasts (9.5%) in January

Canada Industrial Product Price (MoM) climbed from previous 1.5% to 2% in January

Canada Raw Material Price Index climbed from previous 3.5% to 5.7% in January

United States Goods Trade Balance rose from previous $-84.2B to $-83.7B in January

The GBP/USD pair has managed to recover a part of its intraday losses, albeit continued with its struggle to capitalize on the move beyond mid-1.3800s

GBP/USD witnessed heavy selling for the second straight session on Friday.Strong follow-through USD buying was seen as a key factor exerting pressure.The near-term bias might have already shifted in favour of bearish traders.The GBP/USD pair has managed to recover a part of its intraday losses, albeit continued with its struggle to capitalize on the move beyond mid-1.3800s. The pair witnessed some heavy selling for the second consecutive session on Friday and extended its sharp retracement slide from nearly three-year tops, around the 1.4243 touched earlier this week. The US dollar added to the previous day's strong gains led by a sharp rise in the US Treasury bond yields and further benefitted from a softer risk tone around the equity markets. Investors remain optimistic about a strong global economic recovery amid the progress in COVID-19 vaccinations and US President Joe Biden's proposed $1.9 trillion pandemic relief package. The reflation trade forced investors to price in an uptick in inflation and pushed the yield on the benchmark 10-year US government bond beyond 1.50% for the first time since February 2020. Meanwhile, the rout in the fixed income market fueled fears about distressed selling in other assets and triggered a fresh wave of the global risk aversion trade. This was evident from a sharp pullback in the equity markets, which further underpinned the greenback's relative safe-haven status and dragged the GBP/USD pair below the 1.3900 mark during the first half of the European session. That said, the British government's plan to ease current lockdown measures and hopes for a swift UK economic recovery extended some support to the sterling. The GBP/USD pair showed some resilience below the 1.3900 mark, albeit lacked any meaningful traction. This, in turn, suggests that the positive outlook is fully priced in and the bias might have already shifted in favour of bearish traders. Market participants now look forward to the US economic docket, featuring the releases of Core PCE Price Index, Personal Income/Spending data, Goods Trade Balance and Chicago PMI. This, along with the broader market risk sentiment and the US bond yields, will influence the USD and produce some trading opportunities around the GBP/USD pair. Technical levels to watch  

The rally in EUR/USD bumped into a tough barrier at the 1.2240 region on Thursday, sparking quite a moderate correction afterwards to the 1.2090 zone.

EUR/USD comes under pressure following tops near 1.2240.The 1.2030/20 band offers interim contention in the near-term.The rally in EUR/USD bumped into a tough barrier at the 1.2240 region on Thursday, sparking quite a moderate correction afterwards to the 1.2090 zone. Further downside cannot be ruled out in the very near-term, with interim contention emerging in the 1.2030/20, where converge the immediate support line (off the November lows) and the February 17 lows. On the broader picture, the constructive stance in EUR/USD remains unchanged while above the critical 200-day SMA, today at 1.1782. Looking at the monthly chart, the (solid) breakout of the 2008-2020 line is a big bullish event and should underpin the continuation of the current trend in the longer run. EUR/USD daily chart  

After a drop to the 89.70 region on Thursday, DXY manages to stage an important rebound to the 90.75/80 band at the end of the week. In order to exten

DXY sharply bounces off Thursday’s sub-90.00 lows.The 91.00 area now stands as the next key hurdle for bulls.After a drop to the 89.70 region on Thursday, DXY manages to stage an important rebound to the 90.75/80 band at the end of the week. In order to extend the recent recovery, bulls need to regain the area above 91.00 (February 17) ideally in the very near-term. If that’s the case, then the next target of note comes in at the so far 2021 highs around 91.60 (February 5). Bouts of upside pressure in the index, however, are deemed as corrective only amidst the broader bearish view on the dollar. That said, bullish attempts to the 91.00 hurdle and beyond could represent selling opportunities against the current backdrop. In the longer run, as long as DXY trades below the 200-day SMA (93.12), the negative stance is expected to persist. DXY daily chart  

GBP/USD has reversed sharply lower for a break of not only near -term price support at 1.4082/79 but also the rising 13-day exponential average. Econo

GBP/USD has reversed sharply lower for a break of not only near -term price support at 1.4082/79 but also the rising 13-day exponential average. Economists at Credit Suisse see scope for further but still corrective weakness to 1.3840/30, with a fresh floor looked for here. Key quotes “Support moves to 1.3910/02 initially, below which should then see a move to price and trend support at 1.3840/30. We would then look for an attempt to find a floor here for a resumption of the core uptrend.” “Below 1.3830 would warn of a more serious correction lower and a test of 1.3741/31, potentially the 55-day average at 1.3683.”  “Resistance is seen at 1.3971 initially, with a move above 1.4022/29 needed to ease the immediate downside bias. Above 1.4182 though is needed to suggest the correction is over for strength back to 1.4237, then 1.4302/77.”  

The barrel of West Texas Intermediate (WTI) touched its highest level in more than a year at $63.80 on Thursday but staged a deep correction on Friday

WTI remains under bearish pressure after breaking below $63.Broad USD strength is weighing on crude oil prices on Friday.OPEC+ is reportedly is looking to ramp up production from April.The barrel of West Texas Intermediate (WTI) touched its highest level in more than a year at $63.80 on Thursday but staged a deep correction on Friday. As of writing, WTI was down 1.8% on a daily basis at $62.30. WTI looks to post impressive monthly gains in February Earlier in the week, the US Energy Information Administration (EIA) reported a surprise 1.2 million barrels build in US crude oil stocks and limited WTI's gains. Additionally, the broad-based USD strength in the second half of the week amid surging Treasury bond yields is weighing on USD-denominated oil prices.  Meanwhile, Reuters reported on Wednesday that the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, could opt-out to increase the oil production by 500K barrels per day from April. Sources familiar with the matter told Reuters that Saudi Arabia could start rolling out the voluntarily supply reductions as well. Despite the recent pullback, WTI is still up more than 5% on a weekly basis. Furthermore, WTI remains on track to close the fourth straight month in the positive territory and is gaining nearly 20% in February. Later in the day, Baker Hughes Energy Services' weekly oil rig count data for the US will be looked upon for fresh impetus. Technical levels to watch for  

The EUR/GBP cross gained positive traction for the second consecutive session on Friday and built on this week's solid rebound from one-year lows. The

EUR/GBP stalled its recent recovery move from one-year lows near the 0.8730 region.Mixed oscillators on hourly/daily charts warrant some before placing directional bets.A sustained break below 0.8600 will negate prospects for any meaningful recovery.The EUR/GBP cross gained positive traction for the second consecutive session on Friday and built on this week's solid rebound from one-year lows. The momentum pushed the cross beyond the 23.6% Fibonacci level of the 0.9218-0.8539 downfall, albeit stalled near the 0.8730 level. The mentioned region nears a previous horizontal support breakpoint, now turned resistance around the 0.8745-50 region, which should now act as a key pivotal point for short-term traders. Meanwhile, technical indicators on hourly charts have been gaining positive traction and support prospects for additional intraday gains. That said, oscillators on the daily chart – through have been recovering from the bearish territory – are yet to confirm a positive bias and warrants some caution for bullish traders. This makes it prudent to wait for a sustained strength beyond the said support-turned-resistance before positioning for any further appreciating move. Some follow-through buying will set the stage for a move towards the 0.8800 mark (38.2% Fibo.) en-route mid-0.8800s and 50% Fibo. level, near the 0.8875-80 region. On the flip side, any further pullback now seems to find decent support near the 0.8645-40 region. This is followed by the recent daily closing lows support, near the 0.8600 mark, which if broken decisively should pave the way for the resumption of the recent downward trajectory witnessed over the past two months or so. EUR/GBP daily chart Technical levels to watch  

Brazil Nominal Budget Balance increased to 17.9B in January from previous -75.8B

Brazil Primary Budget Surplus above forecasts (50B) in January: Actual (58.4B)

The S&P 500 has seen an aggressive rejection of resistance at 3930/34 on increased volume as rising bond yields and then the poor Treasury auction las

The S&P 500 has seen an aggressive rejection of resistance at 3930/34 on increased volume as rising bond yields and then the poor Treasury auction last night took their toll. This raises the prospect of a lengthier consolidation and a test of more important supports at 3792/74 – the early February price gap and rising 63-day average, in the view of the Credit Suisse analyst team. See – S&P 500 Index: Rising bond yields to be the catalyst for a down move – Charles Schwab Key quotes “We look for a break below 3806 for a test of a cluster of what we see as more important supports at 3792/74 – the early February price gap and rising 63-day average. Our bias remains for this to remain a floor to define the lower end of a sideways range, ahead of the broader uptrend eventually resuming.”  “A close below 3774 would be seen as technically important, raising the prospect of a more protracted and deeper corrective phase with support seen next at 3728/26 and then more importantly at the 3694 late January low.”  “Immediate resistance is seen at 3845, then 3872/86, back above which is needed to ease the immediate downside bias, for strength back to 3929/34.”  

EUR/JPY run into some selling pressure following Thursday’s new 2021 highs in the 130.00 neighbourhood. If bulls regain control in the near-term, the

EUR/JPY corrects lower after hitting 130.00 on Thursday.Above 130.00 comes in the November 2018 high at 130.14.EUR/JPY run into some selling pressure following Thursday’s new 2021 highs in the 130.00 neighbourhood. If bulls regain control in the near-term, the a move above the 130.00 mark should put the 130.14 level (November 7 2018) back on the radar ahead of the summer 2018 high at 131.98 (July 17). Reinforcing the idea of extra gains, EUR/JPY keeps trading above the immediate support line (off November 19 2020 low) near 126.65, where also coincides the 55-day SMA. Looking at the broader picture, while above the 200-day SMA at 124.24 the outlook for the cross should remain constructive. EUR/JPY daily chart  

Having shown some resilience near 100-hour SMA, the USD/CHF pair managed to regain positive traction on Friday and has now recovered the previous day'

USD/CHF regained traction on Friday and recovered the previous day’s modest losses.The formation of a bullish flag chart pattern supports prospects for additional gains.The stage is set for a move beyond the 0.9100 mark, towards testing 200-day SMA.Having shown some resilience near 100-hour SMA, the USD/CHF pair managed to regain positive traction on Friday and has now recovered the previous day's modest losses. The pair was last seen trading near daily tops, around the 0.9060 region during the mid-European session. The mentioned area marks the top end of a three-day-old descending channel. Given the recent strong positive move from mid-February swing lows near the 0.8870 area, the channel constitutes the formation of a flag pattern on short-term charts and favours bullish traders. Meanwhile, technical indicators on 4-hourly/daily charts maintained their bullish bias and have again started gaining positive traction on the 1-hourly chart. This reinforces the near-term constructive outlook and supports prospects for additional near-term gains. That said, it will still be prudent to wait for a sustained break through the channel resistance before placing aggressive bullish bets. The USD/CHF pair might then aim to conquer the 0.9100 mark, which coincides with the 61.8% Fibonacci level of the 0.9297-0.8758 downfall. Some follow-through buying will reaffirm the bullish breakout and push the USD/CHF pair further towards challenging the very important 200-day SMA, currently near the 0.9145 region. On the flip side, dips towards the 0.9025-20 region (50% Fibo. level) might still be seen as a buying opportunity. This is followed by supports near the key 0.9000 and 100-day SMA support, currently around the 0.8985-80 region, which should help limit the downside. A convincing break below will negate the constructive set-up and prompt some aggressive technical selling. The USD/CHF pair might then accelerate the slide towards the 0.8915 horizontal level en-route the 23.6% Fibo. support near the 0.8885-80 region. USD/CHF 1-hourly chart Technical levels to watch  

South Africa Trade Balance (in Rands) below forecasts (15.2B) in January: Actual (11.83B)

Chile Industrial Production (YoY): -2.4% (January) vs -4.1%

India Gross Domestic Product Quarterly (YoY) came in at 0.4%, below expectations (0.5%) in 4Q

Chile Unemployment rate fell from previous 10.3% to 10.2% in January

Mexico Trade Balance s/a, $ down to $2.879B in January from previous $4.154B

Mexico Trade Balance, $ declined to $-1.236B in January from previous $6.262B

Brazil Unemployment Rate meets forecasts (13.9%) in December

Following Thursday's sharp decline, the AUD/USD pair managed to stay above 0.7800 during the European trading hours but came under strong bearish pres

AUD/USD came under renewed bearish pressure ahead of American session.AUD/USD is already losing more than 100 pips on Friday.US Dollar Index continues to push higher toward 91.00 ahead of US data.Following Thursday's sharp decline, the AUD/USD pair managed to stay above 0.7800 during the European trading hours but came under strong bearish pressure in the last hour. As of writing, the pair was losing more than 100 pips, or 1.6%, on the day at 0.7746. USD continues to outperform its rivals The unabated buying pressure surrounding the USD remains the primary market theme ahead of the weekend. The US Dollar Index (DXY) rose sharply in the late American session on Friday fueled by an impressive rally seen in the US Treasury bond yields. Although the benchmark 10-year T-bond yield, which rose more than 10% on Thursday, is staging a correction and is losing nearly 3% on Friday, the DXY continues to push higher. Supported by safe-haven flows, the index is up 0.65% on the day at 90.72. Later in the session, the Core Personal Consumption Expenditures (PCE) Price Index data from the US, the Fed's preferred gauge of inflation, will be watched closely by market participants. Additionally, the US Bureau of Economic Analysis will release the Personal Income and Personal Spending figures for January. Finally, the University of Michigan will publish the final version of its February Consumer Sentiment Index. Meanwhile, investors will keep a close eye on US Treasury bond yields and the performance of Wall Street's main indexes. Currently, the S&P 500 Futures are down 0.35% on the day, suggesting that the market mood is likely to remain sour in the second half of the day. Technical levels to watch for  

EUR/GBP has reversed sharply higher from a cluster of Fibonacci supports at 0.8543/20 and analysts at Credit Suisse see scope for a deeper recovery to

EUR/GBP has reversed sharply higher from a cluster of Fibonacci supports at 0.8543/20 and analysts at Credit Suisse see scope for a deeper recovery to 0.8793/0.8809, but with a fresh cap expected here.  Key quotes “Immediate resistance is seen at 0.8756 and then the 38.2% retracement of the fall from December and early February highs at 0.8793/0.8809. Our bias is for this latter resistance to then ideally cap for an eventual resumption of the bear trend. Above 0.8809 though can see strength extend further to 0.8841.”  “Support moves to 0.8685/75 initially, below which can see a fall back to 0.8627/17. Below 0.8596 is needed to suggest the correction may already be over for a move back to 0.8549/42, then 0.8520.”  

India FX Reserves, USD up to $583.9B in February 15 from previous $583.7B

India Bank Loan Growth: 6.6% (February 12) vs 5.9%

India Infrastructure Output (YoY) climbed from previous -1.3% to 0.1% in January

The USD/CAD pair gained more than 80 pips on Thursday and stayed relatively quiet around 1.2600 during the early European session on Friday. However,

USD/CAD gained traction after falling to 1.2600 area.US Dollar Index posts strong gains above 90.50.WTI trades in the negative territory near $63.The USD/CAD pair gained more than 80 pips on Thursday and stayed relatively quiet around 1.2600 during the early European session on Friday. However, with the USD preserving its strength, the pair gained traction and touched a fresh five-day high of 1.2650 in the last hour. As of writing, the pair was up 0.35% on the day at 1.2643. US T-bond yields continue to drive USD's market valuation The sharp upsurge witnessed in US Treasury bond yields on Thursday allowed the US Dollar Index to make a sharp U-turn in the late American session. With the 10-year benchmark 10-year US T-bond yield rising by more than 10%, the DXY closed in the positive territory above and preserved its bullish momentum on Friday. At the moment, the index is rising 0.55% at 90.63. On the other hand, the barrel of West Texas Intermediate is losing 0.8% on the day near $63, putting additional weight on the commodity-related loonie's shoulders. Later in the day, the US Bureau of Economic Analysis will publish the Personal Consumption Expenditures (PCE) Price Index figures. The market consensus point to a reading of 1.4% in the annual Core PCE Price Index. A stronger-than-expected print could provide an additional boost to the greenback in the second half of the day and vice versa. Moreover, Personal Spending, Personal Income and the University of Michigan's Consumer Sentiment Index data from the US will be looked upon for fresh impetus. The Raw Material Prices and the Industrial Price Index figures, which are unlikely to have a significant impact on the CAD's performance against its rivals, will be featured in the Canadian economic docket. Technical levels to watch for  

Andy Haldane, the Chief Economist of the Bank of England (BoE), said on Friday that the high degree of a two-sided uncertainty on inflation is underst

Andy Haldane, the Chief Economist of the Bank of England (BoE), said on Friday that the high degree of a two-sided uncertainty on inflation is understandable, as reported by Reuters. Additional takeaways "If economies bounce-back as the vaccination programme is rolled-out, policy stimulus could over-stimulate the economy and, with it, inflation." "Reasonable chance disinflationary trends could persist and indeed be amplified by the COVID crisis, posing downside inflation risks." "Few, if any, historical precedents to help judge the response of the economy to this scale of shock and degree of policy stimulus." "Costs to the economy and the BoE of getting these judgements wrong could be significant." Market reaction The GBP/USD pair remains under strong bearish pressure following these remarks and was last seen losing 0.62% on the day at 1.3925.

GBP/USD has collapsed as the dollar soared with bond-yields but the cable may have room to recover as markets rebalance at the end of the month, Yohay

GBP/USD has collapsed as the dollar soared with bond-yields but the cable may have room to recover as markets rebalance at the end of the month, Yohay Elam, an Analyst at FXStreet, reports.  Key quotes “February is drawing to an end and money managers could undo some of the recent moves to balance their books.  “The Senate parliamentarian rejected the hike in the minimum wage, complicating the passage of the stimulus bill and perhaps limiting its scope.” “The Core PCE is set to decelerate to 1.4% yearly, a reminder that prices are not going anywhere fast and that fears of overheating may be exaggerated. That would allow yields to retreat, dragging the dollar lower.”  “Support awaits at 1.39, the daily low, and then by 1.3860. Resistance is at the round 1.40 level, followed by 1.4025, the daily high.”  

Portugal Gross Domestic Product (QoQ) down to 0.2% in 4Q from previous 0.4%

Portugal Consumer Price Index (YoY) rose from previous 0.3% to 0.5% in February

Portugal Gross Domestic Product (YoY) declined to -6.1% in 4Q from previous -5.9%

Portugal Consumer Price Index (YoY) fell from previous 0.3% to 0.2% in February

Portugal Gross Domestic Product (YoY): 0.5% (4Q) vs -5.9%

Portugal Consumer Price Index (MoM) fell from previous -0.3% to -0.5% in February

Economist at UOB Group Ho Woei Chen, CFA, expects the Bank of Korea (BoK) to remain on hold this year. Key Quotes “The Bank of Korea (BOK) kept its be

Economist at UOB Group Ho Woei Chen, CFA, expects the Bank of Korea (BoK) to remain on hold this year. Key Quotes “The Bank of Korea (BOK) kept its benchmark Base Rate unchanged at 0.50% today, in line with consensus and our expectation. The central bank has been on hold since cutting the benchmark rate by 75 bps between March and May 2020. BOK governor Lee Ju-yeol said that the rate decision today was unanimous and reiterated that the central bank will maintain its accommodative monetary policy until the economic recovery is stable.” “he upward revision in its 2021 inflation forecast is not expected to change BOK’s policy stance given that it continues to expect inflation to be well-anchored below its target of 2.0% in the next two years. Importantly, BOK’s GDP outlook for South Korea economy is unchanged at 3.0% in 2021 and 2.5% in 2022, indicating that the prospect of rate normalisation remains low for now. The growth forecasts may be raised slightly when the government’s extra budget is implemented.” “An early withdrawal of policy accommodation is unlikely given the uncertainty of the economic recovery trajectory. We expect that consumption demand and labour market recovery will need to be in place before BOK is ready to raise interest rates. On the other hand, the rapid rise in household credit and property prices will continue to warrant attention from the policymakers. We maintain our forecast for BOK to stay on hold through 2021.”

The XAG/USD pair lost nearly 2% on Thursday after the surging US Treasury bond yields provided a boost to the greenback in the late American session.

Silver is suffering heavy losses for the second straight day on Friday.Next support for XAG/USD is located ar $26.60.Sellers are likely to remain in control unless silver rebounds above $27.30.The XAG/USD pair lost nearly 2% on Thursday after the surging US Treasury bond yields provided a boost to the greenback in the late American session. On Friday, the bearish pressure surrounding silver remains intact and the pair was last seen losing 1.7% on the day at $26.95. Silver technical outlook Following Thursday's sharp drop, XAG/USD closed below the 20-day SMA for the first time in a month and the Relative Strength Index (RSI) indicator on the daily chart dropped below 50, pointing to a bearish shift in the near-term outlook. The 200-period SMA on the four-hour chart is forming the first technical support at $26.60. If a candle on that chart manages to close below that level, $26.20 (February 18 low) could be seen as the next target ahead of $25.90 (February low). On the other hand, the immediate hurdle could be seen at $27.30 (100-period SMA on the four-hour chart) before $28 (psychological level/February 26 high) and $28.35 (February 23 high). XAG/USD four-hour chart Additional levels to watch for  

India Federal Fiscal Deficit, INR rose from previous 11584.7B to 12340B in January

The USD/JPY pair reversed an early dip to the 105.85 region and turned positive for the fourth consecutive session on Friday. The momentum pushed the

USD/JPY attracted some dip-buying on Friday and turned positive for the straight session.The set-up supports prospects for a move towards the channel hurdle near the 105.75 area.Any weakness below the 106.00 mark might still be seen as an opportunity for bullish traders.The USD/JPY pair reversed an early dip to the 105.85 region and turned positive for the fourth consecutive session on Friday. The momentum pushed the pair to fresh five-month tops, around mid-106.00s during the first half of the European session. Looking at the technical picture, the recent move up from YTD lows has been along an upward sloping channel. The ascending trend-channel formation points to a well-established short-term bullish trend and supports prospects for additional gains. The constructive outlook is reinforced by oscillators on the daily chart, which are holding in the bullish territory and still far from being in the overbought zone. Hence, a subsequent strength towards the trend-channel resistance, near the 106.75 region, looks a distinct possibility. A sustained move beyond mark a fresh bullish breakout and set the stage for a further near-term appreciating move. The USD/JPY pair might then accelerate the momentum towards the 107.00 mark en-route the next hurdle near the 107.55-60 supply zone. On the flip side, the 106.00 mark now seems to protect the immediate downside. Any subsequent slide might continue to attract some dip-buying near the 105.85-80 region. This should help limit the fall near the very important 200-day SMA, around the 105.40 area. The latter is closely followed by the trend-channel support, around the 105.15 region. Failure to defend the mentioned support, leading to a subsequent breakthrough the key 105.00 psychological mark will negate the near-term bullish outlook. USD/JPY daily chart Technical levels to watch  

The NZD/USD pair lost more than 60 pips on Thursday after the USD started to gather strength in the late American session. On Friday, the pair continu

NZD/USD remains under bearish pressure following Thursday's slide.US Dollar Index trades at weekly highs above 90.50.Focus shifts to key macroeconomic data releases from the US.The NZD/USD pair lost more than 60 pips on Thursday after the USD started to gather strength in the late American session. On Friday, the pair continues to push lower and was last seen losing 0.7% on the day at 0.7320. DXY edges higher ahead of key data The sharp upsurge witnessed in the US Treasury bond yields following the 7-year note auction provided a boost to the greenback. The US Dollar Index (DXY), which dropped to its lowest level in nearly 8 weeks, staged a decisive rebound and closed in the positive territory on Thursday supported by a more-than-10% increase in the benchmark 10-year US T-bond yield. Ahead of key macroeconomic data releases, the DXY preserve its bullish momentum and is currently rising 0.5% on the day at 90.58, the highest level in a week. On Friday, the US Bureau of Economic Analysis will publish the Personal Consumption Expenditures (PCE) Price Index data. Markets expect the Core PCE Price Index, the Federal Reserve's preferred gauge of inflation, to arrive at 1.4% on a yearly basis in January. A stronger-than-expected reading could allow the USD to gather additional strength as the higher inflation expectations remain the primary driving force of US T-bond yields. Other data releases from the US will include Personal Spending, Personal Income, Goods Trade Balance and the University of Michigan's Consumer Sentiment Index. Technical levels to watch for  

USD/JPY hit 106.42, a fresh 2021 high, as bulls maintain the pressure. The pair has the 107.00 level in its sights, as FXStreet’s Chief Analyst Valeri

USD/JPY hit 106.42, a fresh 2021 high, as bulls maintain the pressure. The pair has the 107.00 level in its sights, as FXStreet’s Chief Analyst Valeria Bednarik notes.  Key quotes “Japan published February Tokyo inflation data, with the headline figure printing at -0.3% YoY, as expected. The core reading, which excludes fresh food prices, also printed at -0.3% YoY. Industrial Production was up 4.2% MoM in January but contracted 5.3% compared to a year earlier.” “The US will publish January Personal Income and Personal Spending and the final estimate of the February Michigan Consumer Sentiment Index, foreseen at 76.5.” “The USD/JPY pair holds on to most of its weekly gains, and the risk remains skewed to the upside in the near-term. The downside seems well limited by the 105.80 area, as buyers keep surging on approaches to the level.”  

EUR/USD has reversed sharply lower and needs to hold 1.2109 to maintain thoughts of a near-term “head & shoulders” base with resistance seen at 1.2184

EUR/USD has reversed sharply lower and needs to hold 1.2109 to maintain thoughts of a near-term “head & shoulders” base with resistance seen at 1.2184/85, per Credit Suisse.  Key quotes “With the market still above its rising 13-day exponential average and more importantly its 1.2109 recent low our bias is to still stay higher for now whilst above here.”  “Below 1.2109 would see the basing effort curtailed for now to warn of further weakness to 1.2063/61, then what we would look to be better support at 1.2035/19, with a fresh floor looked for here.”  “Resistance moves to 1.2184/85 initially, above which is needed to add weight to this view for strength back to 1.2208, then 1.2238/48. Above here can see a move to our 1.4302/77 first core upside target.”  

Gold remained depressed through the first half of the European session, albeit has managed to recover a part of its intraday losses to eight-month low

Gold witnessed some follow-through selling for the second consecutive session on Friday.Oversold RSI on the 1-hourly charts assisted the commodity to bounce off eight-month lows.Bearish oscillators on 4-hourly/daily charts support prospects for a further near-term decline.Gold remained depressed through the first half of the European session, albeit has managed to recover a part of its intraday losses to eight-month lows. The precious metal was last seen trading near the $1764-63 region, down around 0.75% for the day. From a technical perspective, slightly oversold RSI on the 1-hourly chart seemed to be the only factor that extended some support to the XAU/USD. That said, oscillators on 4-hourly/daily charts are holding in the bearish territory and are still far from being in the oversold zone. This, in turn, favours bearish traders and supports prospects for further weakness. However, any subsequent slide is more likely to find some support near a short-term descending trend-line, currently around the $1750 region. Bearish traders could wait for a sustained break through the mentioned support before placing fresh bets. The XAU/USD might then accelerate the fall further towards the $1725-24 support en-route the $1700 round-figure mark. On the flip side, immediate resistance is pegged near the daily swing high, around the $1775 region. A sustained strength beyond might trigger a short-covering move and push the XAU/USD back towards the $1800 mark. This is closely followed by another descending trend-line resistance, around the $1805-06 area, which if cleared will negate any near-term bearish bias. Meanwhile, the two converging descending trend-lines constitutes the formation of a bullish falling wedge. Some follow-through buying beyond the weekly highs resistance near the $1815-16 region will add credence to the bullish breakout and set the stage for a further near-term appreciating move for the yellow metal. XAU/USD daily chart Technical levels to watch  

Italy Trade Balance non-EU dipped from previous €7.91B to €1.71B in January

Greece Producer Price Index (YoY): -5.4% (January) vs -8%

Greece Retail Sales (YoY) fell from previous -6.9% to -11% in December

Following recent tops, the single currency came under selling pressure and drags EUR/USD back to the mid-1.2100s at the end of the week. EUR/USD weake

EUR/USD comes under pressure and returns to 1.2130.The dollar bounces off lows on the back of higher yields.US PCE takes centre stage later in the NA session.Following recent tops, the single currency came under selling pressure and drags EUR/USD back to the mid-1.2100s at the end of the week. EUR/USD weaker on USD-rebound, looks to US data EUR/USD reverses two consecutive daily builds, including fresh multi-week highs around 1.2240 recorded on Thursday, and returns to the 1.2150 region on Friday. The sharp and sudden pick up in yields of the US 10-year benchmark prompted investors to favour the greenback vs. extending the rally in the risk complex, at least in the very near-term. In the meantime, the reflation trade stays as the almost exclusive driver for the price action in EUR/USD and the broader risk universe, helped by the firmer vaccine rollout in the Old Continent and the firm recovery in the global economy in the next months. In the euro docket, France’s flash CPI is expected to contract 0.1% MoM in February, while Spanish consumer prices are seen contracting 0.6% from a month earlier. In addition, ECB’s Schnabel is due to speak, and the European Council will enter its final 2-day meeting. Across the pond, all the attention will be on the inflation figures tracked by the PCE (the Fed’s preferred gauge) followed by Personal Income/Spending, flash Trade Balance results and the final print of the U-Mich index for the month of February. What to look for around EUR EUR/USD’s rally finally surpassed the 1.2200 barrier, although the move run out of steam in the 1.2240 region on Thursday. The underlying bullish sentiment in the euro remains under pressure for the time being amidst investors’ adjustment to potential US inflation and the subsequent increase in yields and the demand for the dollar. Looking at the medium/longer-run, the outlook for the pair remains constructive on the back of prospects of extra fiscal stimulus in the US, real interest rates favouring Europe vs. the US and hopes of a solid economic rebound in the next months.Key events in Euroland this week: European Council meeting (Thursday and Friday). ECB’s Lagarde will participate in the G20 meeting of central bank governors and finance ministers on Friday.Eminent issues on the back boiler: EUR appreciation could trigger ECB verbal intervention, always on inflation issues. EU Recovery Fund. Huge long positions in the speculative community. EUR/USD levels to watch At the moment, the index is losing 0.22% at 1.2140 and faces immediate contention at 1.2097 (21-day SMA) followed by 1.2023 (weekly low Feb.17) and finally 1.2016 (100-day SMA). On the upside, a breakout of 1.2243 (weekly high Dec.17) would target 1.2349 (2021 high Jan.6) en route to 1.2413 (monthly high Apr.17 2018).

The GBP/USD pair witnessed some heavy selling for the second consecutive session on Friday and dropped to over one-week lows during the early European

GBP/USD remained under some selling pressure for the second straight session on Friday.The intraday downtrend managed to find some support near the 1.3900 confluence level.Mixed technical indicators warrant some caution before placing aggressive directional bets.The GBP/USD pair witnessed some heavy selling for the second consecutive session on Friday and dropped to over one-week lows during the early European session. The sharp corrective slide from almost three-year tops stalled near the 1.3900 confluence support amid oversold RSI on intraday charts. The mentioned level comprises the 50% Fibonacci level of the post-BoE strong positive move and 100-period SMA on the 4-hourly chart. This should now act as a key pivotal point for intraday traders. Meanwhile, oscillators on the daily chart have eased from the overbought zone and are still holding in the bullish territory. This, along with the emergence of some dip-buying, warrants some caution for bearish traders. That said, the GBP/USD pair's inability to capitalize on the move beyond mid-1.3900s supports prospects for additional losses. The mixed technical set-up makes it prudent to wait for a sustained break through the 1.3900 mark before traders start positioning for any further depreciating move. A convincing break below would turn the GBP/USD pair vulnerable to accelerate the fall towards mid-1.3800s en-route the 61.8% Fibo. level support near the 1.3820-15 region. On the flip side, the 1.3950 level now seems to act as immediate resistance. Any further recovery might be seen as a selling opportunity near the 1.3975-80 region (38.2% Fibo. level). This, in turn, should cap the GBP/USD pair near the key 1.4000 psychological mark, marking a three-week-old ascending trend-line support breakpoint. GBP/USD 4-hourly chart Technical levels to watch  

The upside momentum in USD/CNH has improved and allows a potential move to 6.5150 in the next weeks, noted UOB Group’s FX Strategists. Key Quotes 24-h

The upside momentum in USD/CNH has improved and allows a potential move to 6.5150 in the next weeks, noted UOB Group’s FX Strategists. Key Quotes 24-hour view: “Our expectation for USD to ‘edge lower’ was incorrect as it staged a surprisingly sharp rally to an overnight high of 6.4970. USD extended its gains to 6.5080 during early Asian hours but has since retreated. The rapid retreat amid overbought conditions suggests further USD strength is unlikely. USD is more likely to consolidate, expected to be between 6.4600 and 6.5000.” Next 1-3 weeks: “We have held a positive view in USD for more than a week now. After USD eased from 6.4760, we noted yesterday (25 Feb, spot at 6.4500) that ‘upward momentum has deteriorated further’. We added, USD ‘has to move and stay above 6.4700 within these 1 to 2 days or break of 6.4200 would indicate positive phase has ended’. USD surged overnight and extended its gains to 6.5080 during Asian hours. Upward momentum has been boosted and we see room for USD to move towards the major resistance at 6.5150. On the downside, the ‘strong support’ level has moved higher to 6.4400 from 6.4200.”

Spain Current Account Balance fell from previous €3.34B to €0.73B in December

Norway Registered Unemployment n.s.a in line with forecasts (4.3%) in February

Norway Registered Unemployment s.a rose from previous 128.1K to 128.46K in February

The AUD/USD pair refreshed weekly lows during the early European session, albeit quickly recovered few pips thereafter. The pair was last seen trading

AUD/USD extended the overnight rejection slide from the 0.8000 mark, or three-year tops.Sustained USD buying, the risk-off mood exerted pressure on the perceived riskier aussie.A modest pullback in the US bond yields capped gains for the USD and helped limit losses.The AUD/USD pair refreshed weekly lows during the early European session, albeit quickly recovered few pips thereafter. The pair was last seen trading near the 0.7840 region, down around 0.40% for the day. The pair witnessed some selling for the second consecutive session on Friday and extended the previous day's sharp fall from the key 0.8000 psychological mark, or fresh three-year tops. Some follow-through US dollar buying was seen as a key factor exerting pressure on the AUD/USD pair, through bulls managed to defend the 0.7800 round-figure mark. As investors digested Fed Chair Jerome Powell's dovish remarks during the congressional testimony, the USD was back in demand amid a sudden spike in the US Treasury bond yields on Thursday. In fact, the yield on the benchmark 10-year US government bond rose beyond 1.50%, or more than one year high and provided a strong lift to the greenback. Meanwhile, the fixed income market rout raised fears about distressed selling in other assets and took its toll on the global risk sentiment. This was evident from a sharp pullback in the equity markets, which further benefitted the greenback's relative safe-haven status and drove flows away from the perceived riskier aussie. That said, a modest pullback in the US bond yields held the USD bulls from placing aggressive bets. This, in turn, extended some support, rather assisted the AUD/USD pair to stage a modest intraday bounce from the 0.7800 mark. It will now be interesting to see if the pair can capitalize on the move or meets with some fresh supply at higher levels. Market participants now look forward to the US economic docket, featuring the releases of Core PCE Price Index, Goods Trade Balance and Chicago PMI. Apart from this, the US bond yields and the broader market risk sentiment will influence the USD price dynamics. This might assist traders to grab some short-term opportunities around the AUD/USD pair. Technical levels to watch  

The European Central Bank (ECB) Executive Board Member, Isabel Schnabel crossed the wires in the last hour, saying that gradual increases in real yiel

The European Central Bank (ECB) Executive Board Member, Isabel Schnabel crossed the wires in the last hour, saying that gradual increases in real yields may not necessarily be a cause of concern.3 Key Quotes: If a rise in nominal yields reflects an increase in inflation expectations is a welcome sign. Changes in nominal rates have to be monitored closely. A rise in real long-term rates at the early stages of the recovery may withdraw vital policy support too early and too abruptly. Risks of moral hazard should not condemn the central bank to a course of inaction. ECB may need to add support if yields hurt growth. ECB still has some room to cut interest rates. The comments did little to influence the shared currency or provide an impetus to the EUR/USD pair, which was last seen trading with modest losses around mid-1.2100s.

EUR/USD has been tumbling from the highs as the US bond rout boosts the dollar. Nonetheless, there are four reasons for a bounce at the critical 1.211

EUR/USD has been tumbling from the highs as the US bond rout boosts the dollar. Nonetheless, there are four reasons for a bounce at the critical 1.2110 confluence point, according to FXStreet’s Analyst Yohay Elam.  Key quotes “President Joe Biden's proposed $1.9 trillion stimulus plan hit a snag. Elizabeth MacDonough, the Senate parliamentarian, disqualified the hike in the minimum wage from the bill. While House Speaker Nancy Pelosi is set to push the legislation forward, it is in a bind in the upper chamber. Prospects of a delay in further aid to the economy soothe concerns about the economy overheating.”  “The publication of the Core Personal Consumption Expenditure (Core PCE) figure is likely to show that price rises remain tame.”  “The third factor that may play in favor of bonds – thus against higher yields and the dollar – is end-of-month flows. Money managers are set to adjust their portfolios in order to tidy up their reports, and that may balance the recent moves.”  “Powell may hint in another public appearance next week that the current $120 billion/month pace is not a ceiling and that would help. At the moment, the sell-off in bonds and stocks may be seen as a correction rather than a change of course.” “Support below 1.2110 awaits at 1.2080, 1.2055, 1.2025 and 1.20. Some short-term resistance awaits at 1.2150, a peak recorded earlier in February. It is followed by 1.2183, the daily high, and by 1.2220 and 1.2145.”  

Sweden Gross Domestic Product (QoQ) down to -0.2% in 4Q from previous 4.9%

Sweden Gross Domestic Product (YoY) climbed from previous -2.5% to -2.2% in 4Q

Sweden Retail Sales (MoM) above forecasts (-3%) in January: Actual (3.4%)

Sweden Gross Domestic Product (QoQ) dipped from previous 4.9% to 0.5% in 4Q

Sweden Retail Sales (YoY) up to 3.1% in January from previous -0.6%

Sweden Gross Domestic Product (YoY) dipped from previous -2.5% to -2.6% in 4Q

Sweden Trade Balance (MoM) increased to 5.2B in January from previous 2.7B

The greenback, when measured by the US Dollar Index (DXY), regains composure and reclaims the 90.00 barrier and (well) above at the end of the week. U

DXY reverses the recent weakness and reclaims the 90.50 area.US 10-year yields climbed to the vicinity of 1.60% on Thursday.US PCE, Trade Balance, Personal Income/Spending next on tap.The greenback, when measured by the US Dollar Index (DXY), regains composure and reclaims the 90.00 barrier and (well) above at the end of the week. US Dollar Index up on higher yields, looks to data The index quickly reversed the drop to fresh 7-week lows in sub-90.00 levels on Thursday on the back of the sharp rebound in US yields, particularly the 10-year Treasury, which advanced to the vicinity of 1.60%, levels last seen in February 2020. The sharp move in yields motivated investors to cash out recent gains in the risk complex and accelerate inflows into the safe haven USD. There are no changes in the broader trading scenario, which remains dominated by the progress of the vaccine rollout, bets for a strong economic rebound in H2 2021 (both in the US and the rest of the world) and the recently reinforced ultra-accommodative stance from the Federal Reserve. Later in the US data sphere, inflation figures tracked by the PCE (the Fed’s preferred gauge) will take centre stage seconded by Personal Income/Spending, advanced Trade Balance results and the final print of the Consumer Sentiment for the month of February. What to look for around USD The index manages to retake the 90.00 yardstick and well above following multi-week lows near 89.70 on Thursday. The reversion of the weekly drop came in tandem with the strong bounce of yields to levels last recorded a year ago. While the reflation/vaccine trade continues to keep bullish attempts in the buck contained, bouts of concerns regarding a pick-up in inflation (and inflation expectations) stemming from the expected extra fiscal stimulus could provide some pockets of strength in the dollar for the time being. Against this, occasional upside in the buck should remain short-lived amidst the broad-based bearish outlook for the currency in the medium/longer-term. This, in turn, is propped up by the reinforced mega-accommodative stance from the Fed until “substantial further progress” is seen, persistent chatter of extra fiscal stimulus and prospects of a strong recovery in the global economy, which are all seen underpinning the better sentiment in the risk complex.Key events in the US this week: PCE figures and the final February U-Mich print are all due on Friday.Eminent issues on the back boiler: US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? Future of the Republican party post-Trump acquittal. US Dollar Index relevant levels At the moment, the index is gaining 0.29% at 90.39 and a breakout of 91.05 (weekly high Feb.17) would open the door to 91.32 (100-day SMA) and finally 91.60 (2021 high Feb.5). On the other hand, the next support emerges at 89.68 (weekly low Feb.25) seconded by 89.20 (2021 low Jan.6) and then 88.94 (monthly low March 2018).

The USD/CAD pair retreated around 35-40 pips from daily tops and was last seen trading with modest gains, around the 1.2610-15 region. A combination o

USD/CAD gained traction for the second consecutive session on Friday.Some follow-through USD buying remained supportive of the move up.Retreating oil prices undermined the loonie and provided a modest lift.The USD/CAD pair retreated around 35-40 pips from daily tops and was last seen trading with modest gains, around the 1.2610-15 region. A combination of factors assisted the pair to gain traction for the second consecutive session on Friday and build on the previous day's solid rebound of around 150 pips from three-year lows, around the 1.2470-65 region. The US dollar added to the overnight strong gains, led by a sharp spike in the US Treasury bond yields. The US bond market has been reacting strongly to the progress on a massive US fiscal spending plan and the impressive pace of COVID-19 vaccinations globally. The reflation trade, along with rising inflation expectations pushed the yield on the benchmark 10-year US bond beyond 1.50%, or more than one year high and underpinned the USD. Meanwhile, the runaway rally in the US bond yields raised fears about distressed selling in other assets and triggered a fresh wave of the global risk-aversion trade. This was evident from a weaker trading sentiment around the equity markets, which provided an additional boost to the greenback's relative safe-haven status. On the other hand, retreating crude oil prices dented demand for the commodity-linked loonie and extended some additional support to the USD/CAD pair. The prevalent risk-off environment and a broad-based USD strength prompted traders to lighten their bullish positions amid expectations that rallying oil prices could lead to more supply in the market. That said, a modest pullback in the US bond yields held the USD bulls from placing fresh bets and kept a lid on any further gains for the USD/CAD pair, at least for the time being. From a technical perspective, the pair's inability to capitalize on the momentum warrants some caution for bullish traders. This makes it prudent to wait for some strong follow-through buying beyond the 1.2655 supply zone before confirming that the USD/CAD pair has bottomed out in the near-term and positioning for any further appreciating move. Market participants now look forward to the US economic docket, featuring the releases of Core PCE Price Index, Goods Trade Balance and Chicago PMI. Apart from this, the US bond yields and the broader market risk sentiment will influence the USD price dynamics. This, in turn, might produce some short-term trading opportunities around the USD/CAD pair. Technical levels to watch  

US stocks fell sharply on Thursday as Treasury bond yields rose. The S&P 500 declined 2.5% which put the index very close to its intraday low from ear

US stocks fell sharply on Thursday as Treasury bond yields rose. The S&P 500 declined 2.5% which put the index very close to its intraday low from earlier this week, yet it remains nearly 3% higher in February. Economists at Charles Schwab note that higher bond yields are set to pressure equities.  Key quotes “The market’s recent success had also led to increased speculative fervor, which is a risk. Heightened optimism doesn’t necessarily indicate an imminent down move, particularly when there is no negative catalyst. However, rising bond yields appeared to be just such a catalyst.” “Higher bond yields tend to put downward pressure on equity multiples. Richly valued growth sectors are now under the most pressure. With 4Q 2020 earnings season winding down, there will be less earnings growth visibility in the near-term, so this pressure may continue.” “Technical support is being tested. S&P 500 stopped just short of touching its 50-day simple moving average (SMA) of 3,805 for the second time this week.” “The Cboe Volatility Index (VIX) rose 36% on Thursday to close above 29 and moved above its 50, 100 and 200-day SMAs for the first time in three weeks. At its current level, the VIX is implying daily moves in the S&P 500 index of 60 points per day in either direction.”  

Austria Producer Price Index (MoM): 0.9% (January) vs 0.4%

Austria Producer Price Index (YoY) climbed from previous -1% to -0.3% in January

Recently, the pound strengthened significantly against the USD, mainly driven by momentum. From a value perspective, economists at HSBC believe the re

Recently, the pound strengthened significantly against the USD, mainly driven by momentum. From a value perspective, economists at HSBC believe the recent GBP strength is not justified and the cable appears to be overstretched.  Key quotes “The UK’s economic recovery remains lacklustre compared to others. The HSBC UK activity surprise index is one of the few trending sideways, not up, showing that the economy is not outperforming expectations in the way the US or Eurozone are.” “UK forward rates have risen this year with negative rates being priced out, but the move has been largely in line with what has happened in other G10 rates markets, especially the US. As rate differentials are what should matter for FX, the rate move does not justify the significant rally in the GBP.” “UK equities remain a laggard suggesting that it is not foreign equities inflows driving GBP outperformance.” “Momentum is clearly a powerful force in FX but we have built a value case for why the GBP is overstretched and that case does not change until the fundamentals behind it change. For a currency, the danger in exceeding your grasp is not that you reach heaven but that you get a nasty fall back to reality when the momentum wanes.”  

Switzerland KOF Leading Indicator came in at 102.7, above expectations (96.6) in February

Switzerland Gross Domestic Product s.a. (QoQ) above forecasts (0%) in 4Q: Actual (0.3%)

Spain Consumer Price Index (MoM) below forecasts (-0.05%) in February: Actual (-0.6%)

Spain HICP (MoM) below forecasts (-0.2%) in February: Actual (-0.6%)

Spain Consumer Price Index (YoY) below expectations (0.6%) in February: Actual (0%)

Spain HICP (YoY) registered at -0.1%, below expectations (0.4%) in February

In opinion of FX Strategists at UOB Group, USD/JPY could now extend the upside to the 106.70 region in the near-term. Key Quotes 24-hour view: “Yester

In opinion of FX Strategists at UOB Group, USD/JPY could now extend the upside to the 106.70 region in the near-term. Key Quotes 24-hour view: “Yesterday, we held the view that USD ‘could break last week’s peak near 106.20 but the next resistance at 106.70 is likely out of reach’. Our view was not wrong as USD eased off after rising to 106.40. Further USD strength appears unlikely. For today, USD is more likely to consolidate and trade between 105.80 and 106.40.” Next 1-3 weeks: “We highlighted yesterday that risk has shifted to the upside and USD ‘could advance to 106.20, possibly 106.70’. USD subsequently rose to 106.40. Upward momentum has improved and the focus now is at 106.70. Only a break of 105.40 (‘strong support’ level was at 105.20 yesterday) would indicate that USD is unlikely to strengthen further.”

France Gross Domestic Product (QoQ) below expectations (-1.3%) in 4Q: Actual (-1.4%)

France Producer Prices (MoM) above expectations (0.3%) in January: Actual (1.2%)

France Consumer Spending (MoM) below expectations (-3.5%) in January: Actual (-4.6%)

France Consumer Price Index (EU norm) (MoM) came in at 0%, above forecasts (-0.3%) in February

The reflation thematic has taken hold locally and globally since the end of Q4. With the recovery now more assured and central banks keeping policy ea

The reflation thematic has taken hold locally and globally since the end of Q4. With the recovery now more assured and central banks keeping policy easy, economists at ANZ Bank expect these trends to continue over the next two years, and that’s reflected in the forecast for a stronger New Zealand dollar.  Key quotes “We are in an episode like that at the moment, and while the NZD remains a ‘market darling’ and reflation remains the thematic, we expect it to continue trading at the rich end of valuations, especially with commodity prices also buoyant.” “Given the degree of momentum in markets and the more assured domestic outlook (which is built on a foundation of successfully containing COVID-19), we have upgraded our NZD forecast and now see the NZD/USD pair gradually appreciating towards 0.77 by the end of 2021.”  

France Consumer Price Index (EU norm) (YoY) came in at 0.7%, above forecasts (0.5%) in February

On Thursday, the EUR/USD pair gave up intraday gains to revert back near the 1.2150/60 handle. Terence Wu, FX Strategist at OCBC Bank, stays neutral o

On Thursday, the EUR/USD pair gave up intraday gains to revert back near the 1.2150/60 handle. Terence Wu, FX Strategist at OCBC Bank, stays neutral on the euro.  Key quotes “EUR/USD brought out of the 1.2200 resistance, before retracing back to the 1.2140/60 vicinity. This keeps us neutral for now, but the bias has shifted towards a potential upward extension, with the initial target at 1.2180, then Thursday’s high at 1.2240.”  “Support is at 1.2100 for now.”  

Gold edged lower through the early European session and dropped to fresh eight-month lows, around the $1756 level in the last hour. The precious metal

Gold remained under some selling pressure on the last trading day of the week.A broad-based USD strength weighing on the dollar-denominated commodity.The risk-off mood did little to impress bulls or lend any support to the XAU/USD.Gold edged lower through the early European session and dropped to fresh eight-month lows, around the $1756 level in the last hour. The precious metal added to the previous day's heavy losses and witnessed some follow-through selling for the second consecutive session on Friday. The overnight slump was sponsored by a sudden spike in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal. The impressive pace of COVID-19 vaccination and the progress in the US President Joe Biden's proposed $1.9 trillion stimulus package has been fueling hopes for a strong global economic recovery. The reflation trade, along with rising inflation expectations continued pushing the US bond yields higher. In fact, the yield on the benchmark 10-year US government bond rose beyond 1.50%, or more than one year high. This, in turn, provided a strong lift to the US dollar, which gained traction on the last trading day of the week and exerted additional pressure on the dollar-denominated commodity. Meanwhile, a fresh wave of the global risk-aversion trade – as depicted by a sharp pullback in the equity markets – did little to impress bulls or lend any support to the safe-haven XAU/USD. The lack of any buying interest favours bearish traders supports prospects for further weakness. Even from a technical perspective, a break below the $1964-60 cluster support adds credence to the bearish outlook. Hence, a subsequent slide towards testing the $1750 support zone, en-route the $1725-24 region and the $1700 round-figure mark, now looks a distinct possibility. Market participants now look forward to the US economic docket, featuring the releases of Core PCE Price Index, Goods Trade Balance and Chicago PMI. This, along with the US bond yields, will influence the USD. Apart from this, the broader market risk sentiment might further produce some trading opportunities around the XAU/USD. Technical levels to watch  

On Thursday, the AUD/USD pair witnessed a key day reversal from psychological resistance at 0.8000 and is now testing the 0.7820 January high, Karen J

On Thursday, the AUD/USD pair witnessed a key day reversal from psychological resistance at 0.8000 and is now testing the 0.7820 January high, Karen Jones, Team Head FICC Technical Analysis Research, briefs. Key quotes “AUD/USD charted a key day reversal from psychological resistance at 0.8000 and we will attempt to exit remaining long positions.”  “The 0.7820 January high is now exposed, but key support short-term is the 55-day ma at 0.7703 and uptrend support at 0.7722. Failure here would target the 0.7564 February low.”  “Above 0.8000 is the 2018 peak at 0.8135.”  

Gold (XAU/USD) hits four-day lows at $1756 and risks a drop below $1750 amid bearish technical setup, FXStreet’s Dhwani Mehta reports. See – Gold Pric

Gold (XAU/USD) hits four-day lows at $1756 and risks a drop below $1750 amid bearish technical setup, FXStreet’s Dhwani Mehta reports. See – Gold Price Analysis: Dovish Fed to continue to support XAU/USD – DBS Bank Key quotes “Should the sell-off in the Treasury yields accelerate, it could drag global stocks lower while reviving the haven demand for the greenback. Such a move could limit the bounce in the metal, paving the way for the next leg lower.” “The US House vote on President Joe Biden’s $1.9 trillion stimulus package later on Friday at 14:00 GMT will be closely followed for the next direction in gold. In the meantime, the Treasury yields price-action could likely be the key driver for the bright metal.” “The recent sell-off charted out a bear flag formation which got validated on the break below the rising trendline support at $1768. The pattern confirmation exposes the end-July lows of $1757, below which the measured target at $1732 could be tested.” “A sustained move above the rising trendline resistance at $1777 could add credence to the recovery momentum. Although the bearish 21-HMA at $1780 is likely to be a tough nut to crack for the XAU buyers.”  

Switzerland Employment Level (QoQ) below expectations (5.158M) in 4Q: Actual (5.135M)

On Thursday, the USD/JPY pair extended higher in a consistent fashion and Terence Wu, FX Strategist at OCBC Bank, continues to favour the US dollar ag

On Thursday, the USD/JPY pair extended higher in a consistent fashion and Terence Wu, FX Strategist at OCBC Bank, continues to favour the US dollar against the Japanese yen. Key quotes “The 106.20 was eclipsed quickly as the immediate target shifts to 107.10/30 levels.”  “Continue to favour upside as a beneficiary of better yield differentials in favour of the USD, with initial support at 105.80.”  

The Chinese authorities must defy the expectations and set a target for economic expansion for this year, Bloomberg reports, citing comments from Zhan

The Chinese authorities must defy the expectations and set a target for economic expansion for this year, Bloomberg reports, citing comments from Zhang Liqun, a researcher at the Development Research Center of China’s State Council. Further comments “Without a certain pace of expansion, the quality of the economy doesn’t have support.” “I think it is necessary to set a goal for economic growth this year, and the conditions are in place for it,” referring to the strong post-covid pandemic recovery. “The lack of a GDP target last year was mainly due to uncertainty due to the pandemic.” Related readsChina's economy to grow 8-9% in 2021 – PBOC's advisorAdvisor: China may not afford major tax cuts in 2021

The GBP/USD pair has failed at the 1.4245 March 2018 high and and is set to test the 1.3864/1.3755, Karen Jones, Team Head FICC Technical Analysis Res

The GBP/USD pair has failed at the 1.4245 March 2018 high and and is set to test the 1.3864/1.3755, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, reports. Key quotes “GBP/USD has failed just ahead of its initial target at 1.4240 (1.4245 is the March 2018 high) and our profit stops have been hit.”  “We look for a correction lower, dips lower should find some support at the 20-day ma at 1.3864 and at the two-month uptrend at 1.3755.”  “The 55-day ma lies at 1.3683, but our longer-term uptrend is not encountered until 1.3411.”  “Minor resistance lies 1.4090 ahead of 1.4238/44. Our overall target remains the 2018 peak at 1.4377.”  

Here is what you need to know on Friday, February 26: The sell-off in bonds has spiraled out of control, sending triggering a similar stampede out of

Here is what you need to know on Friday, February 26: The sell-off in bonds has spiraled out of control, sending triggering a similar stampede out of stocks and causing worries. President Biden's stimulus hit a snag due to a ruling against the minimum wage. End-of-month flows and US economic figures are eyed.Quick reflation: Stocks were able to stomach higher bond yields while they were rising slowly, but the surge of basis points in the benchmark ten-year Treasury yield to 1.61% already triggered a sell-off in global stocks. As of Friday, returns have fallen back, with the ten-year yield dipping below 1.50%. Investors are repricing the chances of a rate hike by the Federal Reserve, shrugging off soothing words from Chair Jerome Powell earlier in the week and from other members such as Esther George, the most hawkish member of the bank.  Growth prospects are partially based on President Joe Biden's proposed $1.9 trillion stimulus package – but that has suffered a blow. Elizabeth MacDonough, the Senate parliamentarian, ruled that a hike in the minimum wage cannot be included in the package. It is unclear how Democrats, divided on the topic, will proceed.  Fears that rapid growth would lead to overheating are also behind the rout. Friday's publications include Personal Spending, Personal Income, and the Core Personal Consumption Expenditure (Core PCE), the Fed's preferred measure of inflation. It is likely to show that price development remains subdued.  Thursday's US data releases were mixed, with Durable Goods Orders beating on the headline but missing on a core measure. Jobless claims dropped, but statistics may have been skewed by the storm in southern states.  US Durable Goods Orders and Initial Claims Is the Treasury market right? The US dollar has been the main beneficiary, surging against the pound, yen and commodity currencies – despite oil prices holding above their highs. The euro stands out by holding up relatively well, partly due to rising bond yields in the old continent.Intervention: Phillip Lane, the European Central Bank's Chief Economist, warned about this increase and hinted his institution is ready to act. The Bank of Japan and officials in Korea made similar warnings while the Reserve Bank of Australia took one step forward and bought bonds in markets. Bitcoin has been on the back foot, trading toward the lower end of its wide weekly range, around $46,000. Ethereum is changing hands below $1,500 and XRP under $0.50. Vaccines: EU leaders advanced plans for vaccine passports and pledged to speed up the rollout of immunization. AstraZeneca promised to ramp up its supply of jabs. The US FDA is set to give emergency authorization to Johnson and Johnson's single-shot vaccine later today, after a committee gave its nod. FedEx and UPS are attempting to accelerate the pace of dose supplies.  The last day of the week and the month will likely experience choppy trading as money managers adjust their portfolios to meet requirements. 

Senior European Union (EU) policymakers are considering a major revamp of its relationship with the UK, which would enable both sides to work towards

Senior European Union (EU) policymakers are considering a major revamp of its relationship with the UK, which would enable both sides to work towards a package of solutions around the outstanding issues of the Northern Ireland Protocol among other areas of tensions, RTE News reported on Friday. Additional details “Senior figures have confirmed to RTÉ News that a formal, set-piece event marking the ratification of the Trade and Cooperation Agreement (TCA), which was concluded by both sides on on Christmas Eve, could inaugurate a more harmonious relationship.” “It is understood very tentative discussions have been underway at a senior level between officials in Brussels and London.” “The fear among senior EU officials is that unless there is a clear reset then the relationship could become one of perpetual tension.” “The European Parliament is expected to formally ratify the TCA on 24 March, meaning national capitals would give their final and formal consent to the treaty early to mid-April.” GBP/USD extends drop towards 1.39 GBP/USD fails to cheer the upbeat headlines, as it remains under heavy selling pressure, approaching the 1.3900 level. The spot drops 0.50% to trade near-day lows of 1.3923, at the press time.

The USD/JPY pair managed to rebound over 30 pips from the Asian session lows and was last seen trading in the neutral territory, around the 106.15-20

USD/JPY attracted some dip-buying near the 105.85 region amid a broad-based USD strength.The risk-off mood extended some support to the safe-haven JPY and might cap any further gains.The USD/JPY pair managed to rebound over 30 pips from the Asian session lows and was last seen trading in the neutral territory, around the 106.15-20 region. The pair witnessed a modest intraday pullback from the 106.40-45 region, or fresh five-month tops amid a fresh wave of the global risk-aversion trade, which tends to underpin the safe-haven Japanese yen. However, a broad-based US dollar strength helped limit the downside, rather assisted the USD/JPY pair to attract a fresh buying near the 105.85 region. As investors digested Fed Chair Jerome Powell's dovish remarks during the congressional testimony, the USD was back in demand amid a sudden spike in the US Treasury bond yields. The US bond market has been reacting strongly to the progress on a massive US fiscal spending plan and the impressive pace of COVID-19 vaccinations globally. The House version of the US President Joe Biden's proposed $1.9 trillion pandemic relief package is expected to get a vote as soon as Friday or over the weekend. Adding to this, the US Food and Drug Administration indicated that it could grant emergency use approval to Johnson & Johnson's COVID-19 vaccine by the end of this week. The developments continued fueling reflation trade and pushed the yield on the benchmark 10-year US government bond beyond 1.50%, to more than one-year highs. This was seen as a key factor that provided a strong lift to the greenback. Meanwhile, the emergence of some dip-buying favours bullish traders and supports prospects for additional gains. Market participants now look forward to the US economic docket, featuring the releases of Core PCE Price Index, Personal Income/Spending data, Goods Trade Balance and Chicago PMI. This, along with the US bond yields, will influence the USD. Apart from this, the broader market risk sentiment might produce some trading opportunities around the USD/JPY pair. Technical levels to watch  

Turkey Trade Balance increased to -3.03B in January from previous -4.53B

Denmark Gross Domestic Product (YoY) up to -2.6% in 4Q from previous -3.7%

Denmark Gross Domestic Product (QoQ) dipped from previous 5.2% to 0.6% in 4Q

Germany Import Price Index (MoM) above forecasts (0.9%) in January: Actual (1.9%)

Germany Import Price Index (YoY) registered at -1.2% above expectations (-2.1%) in January

Norway Credit Indicator: 4.9% (January) vs 4.8%

According to preliminary figures for natural gas futures markets from CME Group, open interest rose by 5.6K contracts following five consecutive daily

According to preliminary figures for natural gas futures markets from CME Group, open interest rose by 5.6K contracts following five consecutive daily pullbacks. In the same direction, volume rose by around 4.5K contract after two pullbacks in a row. Natural Gas could slip back to $2.40/MMBtu The corrective downside in natural gas remains unabated. Thursday’s downtick coupled with rising open interest and volume exposes further downside. Against this, the next support of note now emerges around the $2.40 per MMBtu.  

The sharp correction in AUD/USD from three-year highs of 0.8008 extends into early European trading this Friday. The long positions unwinding continue

AUD/USD risks further falls as technical set up remains bearish. Bears extend control after the rising wedge breakdown on the 4H chart.  100-SMA at 0.7782 is on the sellers’ radars, as the RSI looks vulnerable.The sharp correction in AUD/USD from three-year highs of 0.8008 extends into early European trading this Friday. The long positions unwinding continues, as the returns on the US Treasury yields appear more attractive amid ongoing reflation trade. From a short-term technical perspective, the sell-off in the major gained momentum after the price confirmed a rising wedge breakdown on the four-hour chart in the last US session. The selling pressure intensified in the overnight trades, as the bears took out the 50-simple moving average (SMA) at 0.7850. Sellers await acceptance below 50-SMA on a four-hour candlestick closing basis in order to target the 0.7800 round figure. The next relevant support of the upward-sloping 100-SMA at $0.7782 could limit the declines.     more to come ...

In light of the recent price action, the upside phase in AUD/USD could have come to an end, suggested FX Strategists at UOB Group. Key Quotes 24-hour

In light of the recent price action, the upside phase in AUD/USD could have come to an end, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that AUD ‘could continue to rise but in view of the still overbought conditions, it is unlikely able to maintain a foothold above the major resistance at 0.8000’. While AUD rose to a high of 0.8005, the subsequent sharp sell-off came as a surprise (AUD dropped to 0.7823 after NY close). The rapid decline appears to be overdone but there is room for AUD to test 0.7800 first before the current weakness should stabilize. Resistance is at 0.7880 followed by 0.7925.” Next 1-3 weeks: “We have held a positive view in AUD for more than 2 weeks now. In our latest narrative from yesterday (25 Feb, spot at 0.7970), we noted that ‘overbought shorter-term conditions could slow the pace of advance but a break of 0.8000 would not be surprising and would shift the focus to 0.8030’. AUD subsequently cracked 0.8000 (high of 0.8005) before staging a surprising sharp sell-off. The break of our ‘strong support’ at 0.7870 indicates that the positive phase in AUD has come to an end. The current movement is viewed as the early stages of a consolidation phase. That said, the near-term bias is titled to the downside but for now, any weakness is viewed as part of a 0.7750/0.7950 range.”

CME Group’s flash prints for crude oil futures markets noted open interest rose for the second straight session on Thursday, this time by around 23.9K

CME Group’s flash prints for crude oil futures markets noted open interest rose for the second straight session on Thursday, this time by around 23.9K contracts. In the same line, volume went up by around 125.3K contracts after three consecutive daily pullbacks. WTI: Initial support emerges at $58.60 Prices of the WTI met resistance in the $64.00 neighbourhood before charting an inconclusive session on Thursday, extending the rally to new yearly peaks. The uptick was against the backdrop of increasing open interest and volume, allowing for some consolidation ahead of the potential resumption of the uptrend. That said, WTI still faces the next significant hurdle at the 2020 high around $65.60 (January 8).

“We will be continuing to keep an eye on the yields surge day by day,” the European Central Bank (ECB) Chief Economist Philip Lane said in an intervie

“We will be continuing to keep an eye on the yields surge day by day,” the European Central Bank (ECB) Chief Economist Philip Lane said in an interview with Expansión. Further comments Effect of lockdown on the economy is less than it was last year. We think a lot of the pandemic shock will be offset by the end of the year. What we are seeing now is not a significant, persistent change in inflation path. Excessive tightening in yields is inconsistent in fighting shock to inflation path. We will be continuing to keep an eye on the yields surge day by day. There is no risk of overheating the economy with stimulus. The recovery will be faster if fiscal policy makes its contribution. Lowering rates further is still a credible option, all tools are still available. Market reaction EUR/USD has ticked a few pips higher on the above comments, now trading at 1.2156. The spot is down 0.16% on the day.

Cable risks a corrective downside to the mid-1.3800s in the next week, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yes

Cable risks a corrective downside to the mid-1.3800s in the next week, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘upward pressure has waned and GBP is likely to trade sideways between 1.4080 and 1.4220’. We did not anticipate the sudden and sharp sell-off in GBP to an overnight low of 1.4001 (GBP extended its decline after Asian opening). Further weakness is not ruled out but oversold conditions suggest the support at 1.3900 is unlikely to come into the picture (minor support is at 1.3935). Resistance is at 1.4030 followed by 1.4080.” Next 1-3 weeks: “After GBP breached 1.4150 two days ago (24 Feb, spot at 1.4170), we highlighted that ‘the focus has shifted to 1.4300’. We did not anticipate the overnight sharp sell-off that easily cracked our ‘strong support’ level of 1.4020. The break of the ‘strong support’ indicates that the positive phase in GBP that started about 2-1/2 weeks ago has come to an abrupt end. The current movement is viewed as the early stages of a corrective pullback. At this stage, any pullback is likely limited to a test of 1.3850. On the upside, 1.4110 is acting as a ‘strong resistance’ level.”

Investors trimmed their open interest positions in gold futures market by around 2.4K contracts on Thursday, resuming the downtrend and offsetting the

Investors trimmed their open interest positions in gold futures market by around 2.4K contracts on Thursday, resuming the downtrend and offsetting the previous small build according to advanced readings from CME Group. Volume, instead, went up for the second session in a row, this time by around 96.1K contracts. Gold remains under pressure in YTD lows Thursday’s negative price action in gold was amidst shrinking open interest, leaving the idea of further downside somewhat curtailed. However, another build in volume could play against this view. On the downside, there is no supports of note until the June 2020 lows in the $1,670 region per ounce troy.

UOB Group’s FX Strategists now see EUR/USD navigating within the 1.2060-1.2230 range in the next weeks. Key Quotes 24-hour view: “We expected EUR to s

UOB Group’s FX Strategists now see EUR/USD navigating within the 1.2060-1.2230 range in the next weeks. Key Quotes 24-hour view: “We expected EUR to strengthen yesterday but we were of the view that ‘1.2230 is unlikely to come into the picture’. However, EUR soared to 1.2242 before selling-off sharply. The rapid decline has scope to extend lower but any weakness is likely limited to a test of 1.2100 (minor support is at 1.2125). Resistance is at 1.2185 followed by 1.2205.” Next 1-3 weeks: “We highlighted yesterday (25 Feb, spot at 1.2165) that ‘shorter-term momentum has improved but EUR has to close above 1.2200 before a sustained advance can be expected’. EUR subsequently rose to 1.2242 before dropping sharply to end the day at 1.2176. The build-up in momentum has fizzled out and EUR is likely to trade between 1.2060 and 1.2230 for now.”

South Africa M3 Money Supply (YoY) came in at 9.15% below forecasts (9.55%) in January

USD/CHF picks up bids around 0.9060 while heading into Friday’s European session. In doing so, the Swiss currency pair attacks the familiar region sur

USD/CHF trims early Asian losses to revisit 0.9060-65 region.Upbeat MACD, bullish chart patterns favor the buyers.Upper line of the 10-week-old rising channel tests short-term bulls before immediate ascending channel and 200-day SMA.Bears need to defy multiple channels, refresh monthly low to retake controls.USD/CHF picks up bids around 0.9060 while heading into Friday’s European session. In doing so, the Swiss currency pair attacks the familiar region surrounding the intraday high amid bullish MACD. A sustained upside clearance of the early-month top joins bullish MACD and two ascending trend channels to back the USD/CHF buyers. However, the road to the north has many speed-breakers wherein the resistance line of the longer channel, at 0.9100 now, restricts the quote’s nearby rise. Even if the USD/CHF bulls manage to cross 0.9100, life won’t be easy as the upper limit of the two-week-old ascending channel and 200-day SMA, respectively around 0.9115 and 0.9135 respectively, will challenge the further upside. Alternatively, short-term sellers will seek a clear break of 0.9040, comprising the early month top, to challenge immediate channel’s support, currently around 0.8990. However, the USD/CHF bears won’t be serious until the quote drops below the multi-week-old rising channel’s lower line, at 0.8900 now. Also acting as a downside filter is the monthly low near 0.8870. Overall, USD/CHF remains on the firm footing but the upside moves are likely to be capped. USD/CHF daily chart Trend: Gradual upside expected  

South Africa Private Sector Credit came in at 3.26%, below expectations (3.8%) in January

Large FX option expiries for Feb 26 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2175 1.5bn - GBP/USD: GBP amo

Large FX option expiries for Feb 26 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2175 1.5bn - GBP/USD: GBP amounts         1.4030 2.3bn 1.4060 1.2bn - AUD/USD: AUD amounts 0.7900 5.2bn 0.7975 2.2bn - USD/CAD: USD amounts         1.2530 1.4bn 1.2630 1.4bn - EUR/GBP: EUR amounts 0.8600 1.6bn

USD/INR prints mild losses while easing from the month’s high to around 73.04 during the initial Indian session on Friday. The quote crossed a downwar

USD/INR consolidates recent gains around monthly top, clings to 50-day SMA.Bullish MACD, sustained break of 16-week-old resistance, now support, favor bulls.Sellers need to drop back below the stated trend line to retake controls.USD/INR prints mild losses while easing from the month’s high to around 73.04 during the initial Indian session on Friday. The quote crossed a downward sloping resistance line from November 04 the previous day. However, 50-day SMA seems to test the bulls off-late. Considering the bullish MACD joining the sustained trend line breakout, USD/INR is up for further rise but awaits a fresh monthly high above 73.20 to recall the pair buyers. Following that, the 100-day SMA level of 73.48 and the yearly top around 73.56 will be eyed. On the contrary, the downside break of the previous resistance line, at 72.80 now, may recall the 72.50 and the 72.30 levels on the chart. In a case where the USD/INR bears keep dominating past-72.30, the early 2020 tops near 72.20 will add filters to the downside targeting the 72.000 threshold. USD/INR daily chart Trend: Further upside expected  

Impact of the virus crisis has been very unevenly felt across the economy Expects a negative quarter in Q1 But not in any sense like the one seen in s

“We do expect a negative quarter in the first quarter of 2021,” the Bank of England (BOE) Governor Andrew Bailey said in an interview with Daily Echo on Friday. Additional comments “Clearly there has been a disruption, no surprise there. On the other hand, there’s a clear message that there is a very solid and sustained and growing underlying container trade, for instance.” “Obviously it’s hugely hit, as we know, but some sense of optimism that with the news on the lifting plan, vaccination program, reduction in cases of COVID, that there’s some light coming through at the end of the tunnel, a sense of some renewed interest, some beginnings of stirrings in terms of getting ready to start planning things.” “So, I came away there with a sense of it’s been really huge hit but a sense of 'Maybe we’re now beginning to see real light coming through at the end of the tunnel'. “What I’ve heard today adds a lot of really helpful flavor to the broad picture we have.” “The impact of Covid on the economy had been “very unevenly felt.” “Some parts of the economy, particularly service sectors that rely on a close human contact – non-essential retailing, hospitality, travel – badly hit, some other parts not particularly hit. If you’re an online retailer, you’re doing pretty well actually, so it is a mixed story in that respect and that pattern comes through in what I’ve heard.”. “The impact of the second lockdown last year had been less severe than the first. “Obviously we’re now in the third lockdown which is a more substantial one and we do expect a negative quarter this quarter, but not in any sense like the one we had in spring of last year.”

Netherlands, The Retail Sales (YoY) fell from previous -0.2% to -7.8% in January

Gold (XAU/USD) has stalled its bounce and meanders near multi-day lows, with the risks tilting to the downside, as the US dollar resumes its overnight

Gold (XAU/USD) has stalled its bounce and meanders near multi-day lows, with the risks tilting to the downside, as the US dollar resumes its overnight recovery while Treasury yields catch a fresh bid. The US rates spiked on Thursday after a catastrophic Treasury auction, weighing heavily on the non-yielding gold. Markets now look forward to the US Core PCE Index, Michigan Consumer Sentiment data and the yields dynamic ahead of the US House vote on the $1.9 trillion stimulus package. Gold Price Chart: Key levels of note The Technical Confluences Indicator shows that the path of least resistance appears to the downside for gold, with the XAU bears eyeing the previous week low of $1761 on a failure to defend the immediate cushion at $1765, the confluence of the previous day low and previous low on four-hour. Further south, the pivot point one-week S1 at $1753 could offer some support, below which a minor cap at $1741 could be probed. A sharp sell-off below the latter cannot be ruled out, exposing the pivot point one-week S2 at $1726 On the flip side, recapturing the $1777 hurdle is critical to reviving the recovery rally. That level is the meeting point of the previous high four-hour and Fibonacci 23.6% one-week. The next relevant barrier awaits at $1782, the Fibonacci 38.2% one-day, above which the bulls could challenge the intersection of the Fibonacci 38.2% one-month and SMA10 four-hour at $1787. The Fibonacci 61.8% resistance at $1790 is the level to beat for the XAU bulls. Here is how it looks on the tool   About Confluence Detector The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.   

GBP/USD drops to the fresh weekly low of 1.3944, currently down 0.37% intraday around 1.3955, while heading into the London open on Friday. In doing s

GBP/USD stands on the slippery ground, refresh one-week low.US dollar picks up bids as corrective pullback in bond prices seems to fade.EU-UK stays at the loggerheads over the NI border, UK PM Johnson pressured to repeal the Brexit NI protocol.BOE’s Ramsden, US stimulus and PCE data eyed.GBP/USD drops to the fresh weekly low of 1.3944, currently down 0.37% intraday around 1.3955, while heading into the London open on Friday. In doing so, the cable reacts to the US dollar’s latest run-up amid receding weakness in the Treasury yields. Also on the negative side could be Brexit-related chatters as well as hopes of US stimulus. US 10-year Treasury yields halt pullback from the yearly top while the UK counterparts waver around the 11-month top. Although comments from the Fed tried to placate bond bears, which worked during early Asia, the overall downside sentiment remains on the table. Read: Treasury yields havoc prevails in Asia, 10-year JGB poke October 2018 top Other than the government bond moves, Brexit chatters also weigh on the Cable as neither the European Union (EU) nor the UK is ready to compromise over the Northern Ireland (NI) border. While portraying the disappointment, Northern Ireland's First Minister Arlene Foster said the protocol had "completely ruptured the flow of goods from Great Britain to Northern Ireland", per The Mirror. Elsewhere, UK carmakers seek more government support, mainly due to the dampening demand, whereas the house markets regain momentum as British stimulus help people save and purchase new homes. Amid these plays, the UK lowers COVID-19 alert status as pressure on hospitals eases, said Reuters. However, vaccine allegations by the bloc on the US and the UK keep the risks high. Above all, the Treasury yields exert downside pressure on the UK and the US stock futures while also favoring the US dollar index (DXY) ahead of the stimulus talk in the American house. Also important will be the US Core Personal Consumption Expenditure (PCE) - Price Index for January, expected 1.4% YoY versus 1.5% prior, as the figures will justify the reflation fears and provide direction to the global bonds. Technical analysisSustained break of a three-week-old support line directs GBP/USD sellers toward a 21-day SMA level of 1.3860. Meanwhile, 10-day SMA joins the support-turned-resistance to highlight the 1.4000 as the key short-term hurdle.  

Japan Construction Orders (YoY) climbed from previous -1.3% to 14.1% in January

Japan Annualized Housing Starts rose from previous 0.784M to 0.801M in January

Japan Housing Starts (YoY) came in at -3.1%, below expectations (-2.5%) in January

Singapore Industrial Production (YoY) came in at 8.6%, above forecasts (5.7%) in January

Singapore Industrial Production (MoM) came in at 4.6%, below expectations (5.5%) in January

The Bank of Japan (BOJ) Governor Haruhiko Kuroda voices the same concern expressed by a senior central bank official Seiichi Shimizu earlier this Frid

The Bank of Japan (BOJ) Governor Haruhiko Kuroda voices the same concern expressed by a senior central bank official Seiichi Shimizu earlier this Friday, citing that the risks to the Japanese economy and the inflation outlook remain skewed to the downside. Additional quotesCannot say there is nothing more monetary policy can do.  It may take time but the BOJ must achieve 2% inflation by helping expand the positive output gap, prop up inflation expectations with a commitment to expand base money until inflation stably above 2%. By stressing BOJ’s commitment to hit 2% inflation, it hopes to push up inflation expectations and lower real interest rates.

NZD/USD drops to 0.7354 in a fresh pullback from the latest swing top of 0.7375, down 0.18% intraday, during early Friday. The kiwi pair staged a corr

NZD/USD remains on the back-foot, fails to break above 100-HMA.200-HMA follows a confluence of key support line, 50% Fibonacci retracement to test bears.Bulls need confirmation from 0.7420 to retake controls.NZD/USD drops to 0.7354 in a fresh pullback from the latest swing top of 0.7375, down 0.18% intraday, during early Friday. The kiwi pair staged a corrective pullback from a one-week-old support line, coupled with a 50% Fibonacci retracement level of February 17-25 upside, amid oversold RSI. However, failures to sustain a break of 100-HMA seem to trigger the recent weakness. NZD/USD sellers currently target the 0.7310 support convergence having the stated trend line and Fibonacci retracement level. Though, any further weakness will be tamed by a 200-HMA level of 0.7295. On the contrary, fresh recovery moves not only need to cross the 100-HMA level of 0.7365 but also the early Thursday lows near 0.7420 to recall the NZD/USD buyers. Following that, the latest high, also the highest since August 2017, will challenge the Kiwi bulls around 0.7465. NZD/USD hourly chart Trend: Further weakness expected  

After falling to 1.2137 in Asia, EUR/USD has now regained poise to trade largely unchanged on the day near 1.2160. The bounce could be attributed to t

EUR/USD trades flat after hitting lows below 1.12140 in Asia. The US yield pulled back from 12-month high, weakening demand for the greenback. Copper-gold ratio suggests scope for an extended rally in bond yields. After falling to 1.2137 in Asia, EUR/USD has now regained poise to trade largely unchanged on the day near 1.2160.  The bounce could be attributed to the 10-year US Treasury yield's pullback to 1.50% from the 12-month high of 1.55% reached Thursday.  The relief, however, could be short-lived, as the copper-gold ratio, an indicator of global growth, suggests the yield has plenty of room to rise, as noted by Jeroen Blokland, Portfolio Manager for the Robeco Multi-Asset funds.  The uptrend in yields will likely gather pace, bringing more pain for stocks and EUR/USD if the US core personal consumption expenditures price index (PCE) scheduled for release at 13:30 GMT beats estimates. Federal Reserve's preferred measure of inflation is expected to have risen by 0.2% month-on-month in January, following December's 0.3% increase.  However, the dollar may have a tough time holding on to gains for the long haul if the short-duration bond yields remain relatively low, according to Goldman Sachs. While the 10-year Treasury yield has risen by nearly 50% this year, the two-year yield, which is more sensitive to short-term interest rate/inflation expectations, has added just four basis points.  The investment banking giant expects coronavirus vaccinations and rapid global growth to keep the greenback under pressure.  EUR/USD faced rejection at 1.2243 on Thursday and ended the day with a Gravestone Doji candle on the daily chart, warning an impending sell-off. The dollar found haven bids as the steep rise in the US Treasury yields weighed over stock markets.  Technical levels  

Asian equity bears ignore the recent bounce in the bond prices while portraying the sea of red during early Friday. In doing so, the risk barometer re

Asian shares remain on the back foot despite pullback in global Treasury yields.RBA, RBNZ joined the Fed to placate reflation fears.US pushes China over phase one trade deal commitments, attacks Iran-backed military.US dollar fades recovery moves but commodities, Antipodeans stay pressured.Asian equity bears ignore the recent bounce in the bond prices while portraying the sea of red during early Friday. In doing so, the risk barometer respects likely escalation in the US-China tension as well as Washington-Tehran tussle amid reflation fears. That said, MSCI’s index of Asia-Pacific shares outside Japan drops over 2.20% whereas Japan’s Nikkei 225 declines 2.73% ahead of the European session. Japan’s equity markets couldn’t cheer recovery in the key data at home, like Retail Sales, Industrial Productions and Tokyo CPI, as a senior BOJ official cite downside risk to the economy. Stocks from Australia and New Zealand also ignored efforts of the RBA and the RBNZ, via direct bond purchase and comments to favor prolonged easy money policy respectively. Further, Chinese markets also couldn’t benefit from hopes of a strong recovery and chatter surrounding no tax hikes as America warned Beijing to follow the phase one trade deal commitments. Hong Kong’s Hang Seng and South Korea’s KOSPI lose over 2.5% whereas Indonesia’s IDX Composite and India’s BSE Sensex mark less than 1.0% downside while following the market sentiment. It’s worth mentioning that the Treasury yields of Australian and New Zealand 10-year bonds ease from April 2019 peak while those from Japan step back after touching the highest levels since October 2018 earlier in Asia. Further, the US counterpart also eases from the yearly top to 1.477%, down four basis points (bps) by the press time. Although bond rout seems to have taken a back-seat, for now, the market sentiment isn’t improved as the reflation fears stay on the card and so as the US covid stimulus. As a result, equity bears are likely to witness further happy days and may gain momentum should today’s US Core PCE data print escalated price pressure.

The path of least resistance for EUR/GBP is on the higher, according to technical studies. The pair jumped 0.87% on Thursday, marking a positive follo

EUR/GBP confirmed a bull Doji reversal higher on Thursday. The pair is better bid near 0.87 at press time. The path of least resistance for EUR/GBP is on the higher, according to technical studies.  The pair jumped 0.87% on Thursday, marking a positive follow-through to the bear fatigue signaled by Wednesday's long-tailed Doji candle. In other words, Thursday's gain confirmed a bullish Doji reversal pattern.  The reversal higher signaled by the candlestick pattern is backed by a breakout on the widely-tracked 14-day Relative Strength Index, a momentum indicator.  The RSI has breached a 2-1/2-month descending trendline, implying an end of the bearish trend from December highs above 0.92.  The pair could challenge resistance at 0.8866 (Sept. 3 low) next week. A close under 0.8539 (Wednesday's low) would invalidate the bullish bias.  Daily chartTrend: Bullish Technical levels  

AUD/JPY holds lower ground near 83.25, down 0.40% intraday, during early Friday. The pair took a U-turn from a three-year high the previous day while

AUD/JPY stays depressed while extending the previous day’s pullback moves.50-bar SMA, 18-day-old support line probe immediate downside.Bulls need to defy Gravestone Doji at multi-month top to retake controls.AUD/JPY holds lower ground near 83.25, down 0.40% intraday, during early Friday. The pair took a U-turn from a three-year high the previous day while flashing a bearish ‘gravestone Doji’ candlestick on the four-hour chart (4H). Also favoring the sellers could be the RSI drop from the overbought area. However, a confluence of 50-bar SMA and an ascending trend line from February 02 currently tests the AUD/JPY bears around 82.90-85. Should the quote drops below 83.85, the mid-month top near 82.40 and December 17 low near 81.75 will lure the sellers ahead of highlighting the 81.00 threshold. Meanwhile, the corrective pullback may eye the 84.00 round-figure whereas 84.30 and 84.55 can test the AUD/JPY buyers afterward. Though, bulls are less likely to be convinced unless crossing the latest top near 85.00, which in turn will reject the bearish candlestick formation. AUD/JPY four-hour chart Trend: Further weakness expected  

Liu Shijin, a policy adviser to the People's Bank of China, said Friday that the Chinese gross domestic product growth could be 8-9% in 2021. However,

Liu Shijin, a policy adviser to the People's Bank of China, said Friday that the Chinese gross domestic product growth could be 8-9% in 2021.  However, the high growth rate would be the result of 2020's low base, Shijin added, according to Reuters. China's economy grew by 2.3% in 2020.  According to Shijin, an average growth of around 5% over the two years (2020, 2021) would be a good outcome.       

Concord Resources Ltd, a leading trading house, says new demand from green initiatives could propel copper to fresh record highs above $12,000 per ton

Concord Resources Ltd, a leading trading house, says new demand from green initiatives could propel copper to fresh record highs above $12,000 per tons over the next 18 months.  An article published by Bloomberg quotes Concord's CEO Mark Hansen as saying that, "People need to be aware of the potential for a changing paradigm in terms of pricing. "In copper, the market is not yet pricing in the addition of potentially millions of new tons of copper demand over the coming decade." While copper has doubled in the past 11 months to set a nine-year high of $9,260, it is still down 10% from the record high of $10,190 reached in 2011.  The relentless rally in the metal, widely considered a barometer of the global economy's health, has boded well for the Australian dollar.  AUD/USD clocked a high of 0.8007 earlier this week – the highest level since January 2018.

Gold is trading near $1,773 per ounce, having put in a low of $1,765 in early Asia. The minor bounce could be associated with the US 10-year Treasury

Gold trades marginally higher in Asia as US yields decline. The metal's short-duration technical charts show scope for a corrective bounce.Gold is trading near $1,773 per ounce, having put in a low of $1,765 in early Asia.  The minor bounce could be associated with the US 10-year Treasury yield's pullback from the 12-month high of 1.55% to 1.5%.  Gold's 15-minute chart shows a bullish divergence of the Relative Strength Index. Meanwhile, long tail attached to the current and the previous 4-hour candle signals bear fatigue.  As such, the metal could extend the recovery toward resistance at $1,780 – a lower high on the 15-minute chart. A violation there would expose the descending trendline.  The overall bias would remain bearish while prices are held under the Feb. 23 high of $1,816.  15-minute chartTrend: Corrective bounce Technical levels  

S&P 500 Futures retrace from the weekly low while rising to 3,840, up 0.30% intraday, during early Friday. The risk barometer marked the heaviest drop

S&P 500 Futures pick-up bids near the weekly low, US 10-year Treasury yields ease from yearly top.US-China trade headlines, America-Iran tussle fail to get major attention amid global bond rout.US stimulus chatters, PCE data will be eyed, bond coupon moves keep the driver’s seat.S&P 500 Futures retrace from the weekly low while rising to 3,840, up 0.30% intraday, during early Friday. The risk barometer marked the heaviest drop in a month the previous day as global markets got swayed by the slump in the bond coupon. However, the latest pullback in Treasury yields seems to have offered US stock futures’ an immediate relief. The US 10-year Treasury yields rose to the highest since February 2020 while those from Japan, Australia and New Zealand also refreshed the multi-month tops the previous day. The moves ignored central bankers’ efforts to tame the reflation fears and took a tool on Wall Street. It’s worth mentioning that the jump in the yields also favored the US dollar index (DXY) to stage the strongest comeback in seven weeks while also exerting downside pressure on commodities and Antipodeans. Recently, news of the US trade warning to China and missile attack on Iran-backed militant group couldn’t impress markets. Though, US House Speaker Nancy Pelosi’s hint to include a minimum wage hike in the $1.9 trillion covid relief stimulus seems to have helped the counter-trend traders. That said, stocks in Asia-Pacific remain offered while gold prints mild gains and WTI stays depressed by press time. Given the market’s attention on the global bond performance, the US covid aid package updates and the US Core Personal Consumption Expenditure (PCE)-Price Index for January will be the key to watch. It should also be noted that any surprise announcements by central bankers, especially the Fed, will also have their impact on the market moves and must not be missed.

Advisor: China may not afford major tax cuts in 2021 developing story ....

Advisor: China may not afford major tax cuts in 2021   developing story ....

WTI remains on the back foot, currently down 0.11% to $63.20, despite the latest bounce off intraday low of $62.71 during the early Friday. The black

WTI snaps four-day winning streak, trims early Asian losses off-late.Bearish candlestick, overbought RSI favor WTI sellers to eye monthly support line.One-week-old rising trend line adds to the upside filters.WTI remains on the back foot, currently down 0.11% to $63.20, despite the latest bounce off intraday low of $62.71 during the early Friday. The black gold refreshed a 13-month high the previous day before declining from $63.71. The following pullback, however, couldn’t last long and portrayed a Doji candlestick on the daily (1D) chart. Not only the bearish candlestick but overbought RSI conditions also probe the energy benchmark’s uptrend. Hence, oil sellers can keep their eyes on the monthly support line, at $60.72 now, during further declines. However, any further weakness will be probed by the three-week-old horizontal support near $57.40. Alternatively, a daily closing beyond $63.71 will defy the bearish Doji but will need a clear break of the immediate resistance line, currently around $64.00 to recall the oil buyers. Overall, WTI bulls seem tiring and hence notable pullbacks can’t be ruled out. WTI daily chart Trend: Pullback expected  

The dollar index (DXY), which tracks the greenback's value against majors, trades near 90.28 press time, having printed a high of 90.36 a few minutes

The dollar index retreats from the session high of 90.36. The Us 10-year yield drops six-basis points from 12-month highs.Analysts at Goldman Sachs maintain bearish view on the dollar.The dollar index (DXY), which tracks the greenback's value against majors, trades near 90.28 press time, having printed a high of 90.36 a few minutes ago.  The DXY's recovery rally from the seven-week low of 89.68 reached early Thursday has stalled, with the US 10-year Treasury yield retreating from the 12-month high of 1.55% to 1.49%.  The benchmark yield has been on a tear of late, with market-based measures showing signs of inflation pressures and oil and indsutrial commodities rising to multi-year highs. That triggered fears of an early unwinding of stimulus the Federal Reserve (Fed).  As such, stocks came under pressure on Thursday, boosting haven demand for the greenback.  The rotation of money out of growth stocks could gather pace, possibly yielding deeper stock market losses and a more robust USD recovery.  However, Fed's Chairman Jerome Powell assured markets of continued stimulus support earlier this week. Besides, according to Goldman Sachs, the dollar would remain weak while short-duration yields remain relatively low.  While the 10-year yield has increased by nearly 50 basis points this year, the two-year yield has gained just four basis points.  Technical levels  

The risks to the economic and inflation outlook are tilted to the downside, Reuters reports, citing comments from the Bank of Japan (BOJ) official. Ad

The risks to the economic and inflation outlook are tilted to the downside, Reuters reports, citing comments from the Bank of Japan (BOJ) official. Additional quotes Various uncertainties exist over the outlook of Japan prices. Consumer prices likely to remain negative for time being on one-off factors, gradually rise thereafter as economy improves. Risks to economic, price outlook are skewed to downside Recent sharp rise in Japan's money stock due to huge govt stimulus, aggressive lending by banks. more to follow ....  

AUD/USD bounces off intraday low to 0.7857 during the early Friday. In doing so, the quote also takes a U-turn from the weekly trough while consolidat

AUD/USD trims intraday losses after refreshing the weekly low.RBA jumped bond purchase amid global treasury yield rally, Aussie 10-year coupon rose to April 2019 top.Aussie Private Sector Credit Eased, S&P 500 Futures stays depressed.US stimulus talks, PCE data and bond moves will be the key.AUD/USD bounces off intraday low to 0.7857 during the early Friday. In doing so, the quote also takes a U-turn from the weekly trough while consolidating the initial losses incurred due to the global Treasury yields havoc. Also favoring the pair bears was the RBA’s latest action and Aussie data. Australia’s Private Sector Credit for January eased below 0.3% to 0.2% MoM whereas the YoY reading also fell to 1.7% from 1.8% prior. RBA bought 3-year government bonds worth three billion Australian dollars to tame the Treasury yields that spiked to the highest in 22 months. The bonds in Australia aren’t alone to witness the bears’ show as their counterparts in Japan, the US and New Zealand also poked multi-month top earlier in the day. However, the US 10-year Treasury yields steps back from the highest in a year, flashed the previous day, to mark 2.8 basis points (bps) of a decline to 1.493% by press time. The moves of the US 10-year Treasury yields seem to offer breathing space to the S&P 500 Futures that marked the heaviest drop in a month on Thursday. It's worth mentioning that the US missile attack on Iran and House Speaker Nancy Pelosi’s update on the much-awaited stimulus fail to gain any major attention. Also being the risk news was the American push for China to follow the trade deal agreement and Beijing's dislike for US Navy's entrance in the South China Sea. Looking forward, bond moves are likely to keep the driver’s seat and may exert additional downside pressure on the AUD/USD if today’s US PCE data suggests an inflation uptick. Also important would be anticipated voting on the US covid relief package in the American Lower House. Technical analysis The pullback from the multi-month high eyes 0.7820-13 key support area, comprising a three-week-old support line and highs marked during April 2018 and January 2021. However, bulls can stay hopeful to witness 0.8000 again on the charts. Though, its run-up beyond the latest top has a bumpy road before the year 2018 peak surrounding 0.8135.  

China needs to follow through on the commitments of the Phase One trade deal, Katherine Tai, US President Joe Biden’s nominee for Trade Representative

China needs to follow through on the commitments of the Phase One trade deal, Katherine Tai, US President Joe Biden’s nominee for Trade Representative, said during her confirmation hearing on Thursday.   more to come ....

House Speaker Nancy Pelosi has stated, “House Democrats believe that the minimum wage hike is necessary. Therefore, this provision will remain in the

House Speaker Nancy Pelosi has stated, “House Democrats believe that the minimum wage hike is necessary.  Therefore, this provision will remain in the American Rescue Plan on the Floor tomorrow.  Democrats in the House are determined to pursue every possible path in the Fight For 15.” Confirmation that the $15 federal minimum wage will be included in the latest version of the $1.9 trillion bill follows the Senate voting on a nonbinding agreement to ban raising the minimum wage during the pandemic.

USD/JPY has been trading between a range of 106.13 and 106.43 on Friday following a series of domestic data events and action on Wall Street. there wa

USD/JPY on the bid as the market factor sin rising inflation prospects and a Fed taper. 10-year yields reached new highs since Feb 2020 at 1.61%, before dropping to 1.54%.USD/JPY has been trading between a range of 106.13 and 106.43 on Friday following a series of domestic data events and action on Wall Street.  there was a rally in the greenback and again in Asia due to the pace of the selloff in US treasuries that has increased sharply despite dovish comments from the Fed.  Bonds yields are going up because there is a massive supply of bonds and expectations of rising inflation. ''The rise in treasury yields was led by a poor result in the 7-year Treasury note auction and expectations that the Fed may push forward rate hikes,'' analysts at Westpac explained noting the price action as follows:  ''The 2-year bond yields were up 6 bps to 0.19% before falling down to 0.16%, 5-year yields reached 0.75% (highest since March 2020) and 10-year yields reached new highs since Feb 2020 at 1.61%, before dropping to 1.54%.'' Huge US deficits can't be funded by the Fed entirely and there is now no buyer for the extra bonds. Real yields are negative and there is little demand for negative yielding US treasuries as they are now not demanded as a safe haven.  This sentiment is creeping its way back into markets and this can lead to sell-offs on Wall Street. In fact, the US stock market did slide on the auction, initially led by the NASDAQ and tech before both the Dow and S&P followed suit.  Nevertheless, the US dollar is higher as it has garnered strength in the belief that the Fed will have to start tapering sooner than preferred.  USD/JPY levels Meanwhile, from a technical perspective, USD/JPY is heading deeper into the supply zone and is due for a weekly retracement.  Monthly chart Weekly chart Daily chart The daily chart offers a 38.2% Fibonacci retracement prospect that aligns with the prior resistance as an initial downside target. 

Analysts at Goldman Sachs expect more US dollar weakness in the coming months despite rising rates. Key quotes “As long as US front-end rates remain l

Analysts at Goldman Sachs expect more US dollar weakness in the coming months despite rising rates. Key quotes “As long as US front-end rates remain low and other curves are moving as well.” “USD also subject to weakness due to valuations limiting the selloff in bond yields.” “Rapid global growth over the next six months as vaccination and reopenings take place.” Related readsTreasury yields havoc prevails in Asia, Japan 10-year JGB poke October 2018 topEmerging Asia has an important buffer against a recent jump in global bond yields – Bloomberg

Brazil intervened in the foreign exchange markets on Thursday for the first time this year, as its currency real (BRL) fell to four-month lows against

Brazil intervened in the foreign exchange markets on Thursday for the first time this year, as its currency real (BRL) fell to four-month lows against the US dollar, according to Reuters.  The central bank sold $1.5 billion in two auctions. USD/BRL rose to 5.5387 on Thursday – the highest level since Nov. 6 – and was last seen at 5.5313.  With the 10-year US Treasury yield rising almost 100 basis points over its Brazilian counterpart, the cost of opportunity of investing in Brazil has changed dramatically, the head of trading at a bank in Sao Paulo told Reuters. 

GBP/USD licks its wounds around 1.3985, down 0.12% intraday, during early Friday. The cable dropped to the lowest in a week following its downside bre

GBP/USD bounces off intraday low, keeps the break of crucial support convergence.RSI has room for further downside but eight-day-old horizontal support tests short-term sellers.Bulls need validation from 1.4080-85 before retaking the controls.GBP/USD licks its wounds around 1.3985, down 0.12% intraday, during early Friday. The cable dropped to the lowest in a week following its downside break of 50-bar SMA and an ascending trend line from February 04. Although the mid-month top recently probes GBP/USD sellers, sustained break of the key support convergence and a lack of oversold RSI signal further downside by the pair. As a result, the sterling bears can target the 61.8% Fibonacci retracement level of February 04-24 upside, near 1.3825, if it manages to break the 1.3950 immediate support. During the fall, the 50% Fibonacci retracement level around the 1.3900 threshold also offers a breathing space to the GBP/USD prices. Meanwhile, an upside break of 1.4010 needs to cross 23.6% Fibonacci retracement level near 1.4085 to regain the buyers’ confidence. Following that, 1.4180 and the latest top near 1.4245 will be the key to watch. Overall, GBP/USD is up for consolidating the latest gains. GBP/USD four-hour chart Trend: Further weakness expected  

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4713 versus Friday's fix at 6.4522.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4713 versus Friday's fix at 6.4522.

NZD/USD extends Thursday's decline as the continued rise in the government bond yields keeps risk assets under pressure. The Kiwi printed lows below t

NZD/USD tests former resistance-turned-support at 0.7315. Rising yields weigh over stocks and put a bid under the US dollar. RBNZ's Governor Orr says negative rates are an option.NZD/USD extends Thursday's decline as the continued rise in the government bond yields keeps risk assets under pressure.  The Kiwi printed lows below the former resistance-turned-support of 0.7315 (Jan. 6 high) a few minutes before press time, having put in a multi-year high of 0.7464 on Thursday.  The 10-year US Treasury yield clocked a fresh 12-month high of 1.55% during the overnight trade, taking the year-to-date gain to over 50 basis points and spurring a rotation out of and retreat in stocks. The S&P 500 fell nearly 2.5%, putting a haven bid under the US dollar and pushing NZD/USD lower.  Reserve Bank of New Zealand's Governor Orr said early today that negative rates are an option, seemingly adding to bearish pressures around the NZD. The US airstrike on an Iranian-backed militant group in Syria likely boosted haven demand for the greenback.  NZD/USD is currently trading near 0.7350, representing a 0.25% drop on the day. Support at 0.7315 could be breached if the US yields continue to rise.  Technical levels  

Pentagon says strikes destroyed multiple facilities at border control point used by Iranian-backed militant groups The Pentagon confirmed earlier the

Pentagon says strikes destroyed multiple facilities at border control point used by Iranian-backed militant groups The Pentagon confirmed earlier the strike on Iranian-backed militia in eastern Syria in response to the recent attacks against the US personnel in Iraq.  Attacks on Baghdad’s Green Zone, Balad Air Base and Irbil International Airport in the past week resulted in a rocket falling within the perimeter of the vast US Embassy complex.  Meanwhile, there is no reaction in the markets to these events, but an watchful is being kept on developments.   

Thursday’s global bond rout extends to Asia during early Friday as the Treasury yields from Japan, Australia and New Zealand remain on the front foot

Global bond coupons keep rallying in Asia, stocks remain on the back-foot.10-year JGB yields cross 0.15% mark, its counterparts from Australia and New Zealand jump to April 2019 levels.Fed, RBNZ and RBA try their best to tame the bond bears but markets don’t list.Thursday’s global bond rout extends to Asia during early Friday as the Treasury yields from Japan, Australia and New Zealand remain on the front foot while challenging the multi-month high. 10-year Treasury yield on the Japanese Government Bond (JGB) recently crossed the 1.5% mark, at 0.152% now, to probe the October 2018 peak. Also on the same line were bond coupons from Australia and New Zealand that poke April 2019 levels despite the RBA and RBNZ efforts to placate the bears. In its latest efforts, RBA bought 3-year government bonds worth three billion Australian dollars whereas the RBNZ Governor Adrian Orr rekindled the monetary policy status-quo for a prolonged period. Elsewhere, the US 10-year yields waver around 1.52% after refreshing the yearly top with 1.563% the previous day. It’s worth mentioning that the Fed members, including Chairman Jerome Powell, recently tried to tame the Treasury yield rally while saying that they are neither concerned nor should be about the surge in the yields. Due to the bond havoc, Wall Street benchmarks flashed notable losses while S&P 500 Futures currently marks 0.40% losses after marking the heaviest drop in a month the previous day. The Treasury yields run-up also favors the US dollar buyers and negatively affects the commodities as well as Antipodeans. Read: Gold Price Analysis: XAU/USD extends the heaviest drop in three weeks below $1,800

EUR/USD is losing altitude in Friday's Asian session, having formed a "Gravestone Doji" – bearish candlestick pattern – on Thursday. A Gravestone Doji

EUR/USD trades lower in Asia, as dollar gains on risk-off. Thursday's bearish candlestick pattern favors a deeper decline.EUR/USD is losing altitude in Friday's Asian session, having formed a "Gravestone Doji" – bearish candlestick pattern – on Thursday.  A Gravestone Doji on the daily chart occurs when the bulls fail to keep gains at session highs, and bears end up pushing prices back to the daily opening price. EUR/USD clocked a high of 1.2243 on Thursday but closed flat at 1.2167, implying bull fatigue and warning of an impending reversal lower.  The pair is now trading near 1.2142, representing a 0.2% drop on the day.  The immediate support is seen at 1.2109 (Wednesday's low), which, if breached, would open the doors to 1.2023 (Feb. 17 low). On the higher side, a close above 1.2243 is needed to invalidate the bearish bias.  Daily chartTrend: Bearish Technical levels  

Australia Private Sector Credit (YoY) fell from previous 1.8% to 1.7% in January

Australia Private Sector Credit (MoM): 0.2% (January) vs previous 0.3%

In a surprise move outside of its usual operations mid-week, has announced that it is buying 3-year Australian government bonds to the tune of AUD 3bn

In a surprise move outside of its usual operations mid-week, has announced that it is buying 3-year Australian government bonds to the tune of AUD 3bn. This is weighing on AUD, already dented by the rise in US yields and the USD from the New York session following a terrible 7-year auction that lead to a spike in yields.  At the time of writing, AUD/USD is now down 0.35% to a low of 0.7841 from a high of 0.7883 so far.   

Gold prices drop to $1,767, down 0.13% intraday, during Friday’s Asian session. In doing so, the yellow metal tracks the corrective pullback in S&P 50

Gold remains pressured after staging the notable downside.S&P 500 Futures stretches losses from Treasury yield havoc.US stimulus, PCE data will be the key but bond moves keep the driver’s seat.Gold prices drop to $1,767, down 0.13% intraday, during Friday’s Asian session. In doing so, the yellow metal tracks the corrective pullback in S&P 500 Futures after the Treasury yields roiled global markets the previous day. Markets pay a little heed to Fedspeak… Although the Federal Reserve policymakers signaled that they are neither concerned nor should be about the jump in the Treasury yields, the same triggered market havoc and propelled the US dollar index (DXY) on Thursday. The US central bankers keep emphasizing their readiness to buy bonds but market players don’t listen and propel the coupons to the yearly top. The resulted moves dragged equities amid the reflation fears while the US dollar’s recovery moves from a seven-week low weighed on the commodities and Antipodeans. It should be noted that the vaccine optimism and upbeat prints of the US Q4 GDP, Durable Goods Orders and drop in weekly Jobless Claims were additional reasons for the US dollar’s recovery. Also on the positive side could be the hopes of President Joe Biden’s $1.9 trillion covid relief stimulus as the latest market chatters suggest the bill is to be voted in the Lower House today. Against this backdrop, S&P 500 Futures drop 0.40% whereas the US 10-year Treasury yields rise 3.8 basis points to 1.55%. Looking forward, gold traders will keep eye on the Treasury yields’ moves while also observing the US Core PCE data for January for fresh impulse. It should, however, be noted that the bears are likely to keep the reins until any major negatives renew gold’s safe-haven demand. Technical analysis Gold bears need a successful break below July 2020 low near $1,757 to extend the latest south-run. It should, however, be noted that the bulls are less likely to return until witnessing a daily close beyond a seven-week-old resistance line, currently near $1,805.  

The Reserve Bank of New Zealand governor Adrian Orr says will not be changing policy for a prolonged period of time. More to come...

The Reserve Bank of New Zealand governor Adrian Orr says will not be changing policy for a prolonged period of time. More to come...

Further to the prior analysis, AUD/NZD Price Analysis: Bulls eye a 50% reversion confluence of old support, instead of an immediate correction, the pr

AUD/NZD bulls remain in play so long as they can get over the line. The M-formation is a bullish chart pattern that would be expected to see a retest of old support. Further to the prior analysis, AUD/NZD Price Analysis: Bulls eye a 50% reversion confluence of old support, instead of an immediate correction, the price continued to deteriorate. However, this offers a discount to the bulls in anticipation of a significant retracement.  Prior analysis, daily Live market, daily chart  Hourly chart The market on the hourly chart is establishing support here and a break of resistance would be expected to equate to a significant correction to the formation's neckline. 

Japan Retail Trade s.a (MoM) up to -0.5% in January from previous -0.8%

Japan Industrial Production (MoM) above expectations (4%) in January: Actual (4.2%)

Japan Large Retailer Sales down to -7.2% in January from previous -3.5%

Japan Industrial Production (YoY): -5.3% (January) vs previous -2.6%

Japan Foreign Investment in Japan Stocks fell from previous ¥330.1B to ¥94.1B in February 19

Japan Foreign Bond Investment fell from previous ¥477.1B to ¥-1893B in February 19

Japan Retail Trade (YoY) above forecasts (-2.6%) in January: Actual (-2.4%)

Bank of America (BofA) came out with the latest EUR/USD forecast while suggesting a highly uncertain outlook for the major currency pair despite targe

Bank of America (BofA) came out with the latest EUR/USD forecast while suggesting a highly uncertain outlook for the major currency pair despite targeting 1.15 for the next year. The US bank cites the US dollar moves as the key driver while also highlighting the Eurozone (EZ) fiscal and monetary policies for the EUR/USD moves. "Our EURUSD equilibrium range is 1.20-1.25, but our analysis suggests the EUR should be below its long-term average for as long as the EZ output gap is large,” said the bank further. It should be noted that the EUR/USD prices have been upbeat off-late as the US dollar remained heavy. However, the recent bounce off the US dollar index (DXY), from a seven-week low, coupled with the surge in the Treasury yields, favor the EUR/USD sellers. Read: EUR/USD Forecast: Bullish breakout losses momentum as yields soar

Japan Tokyo CPI ex Fresh Food (YoY) above expectations (-0.4%) in February: Actual (-0.3%)

Japan Tokyo CPI ex Food, Energy (YoY) remains unchanged at 0.2% in February

Japan Tokyo Consumer Price Index (YoY) rose from previous -0.5% to -0.3% in February

As per the prior analysis, GBP/NZD Price Analysis: Bulls look to a 50% mean reversion of daily candle, the market remains favourable for an upside cor

GBP/NZD bulls are seeking an optimal entry point.The daily target is compelling as the price stabilises at support.  As per the prior analysis, GBP/NZD Price Analysis: Bulls look to a 50% mean reversion of daily candle, the market remains favourable for an upside correction.  Prior analysis, daily chart Live market, daily While the position is there, the hourly conditions are critical.  Prior analysis, hourly chart Live market, hourly  Ignoring the spike, which is a false read, the price has been building a bullish case in the consolidation and higher lows.  MACD is turning higher and bulls can continue to monitor for bullish structure and an optimal entry point over the course of the coming sessions. 

USD/CAD retraces the previous day’s heavy recovery, the strongest in a month, while battling the 1.2600 threshold during Friday’s Asian session. The q

USD/CAD bulls catch a breather after crossing one-week-old resistance, now support.Strong RSI suggests further rise but a confluence of 100-bar SMA, 16-day-old descending trend line probes the buyers.Bears can keep eyes on 2018 lows on the break of 1.2450.USD/CAD retraces the previous day’s heavy recovery, the strongest in a month, while battling the 1.2600 threshold during Friday’s Asian session. The quote dropped to the fresh low since 2018 before bouncing off 1.2468 on Thursday. In doing so, the loonie pair broke an immediate resistance line, now support, amid oversold RSI. Given the currently strong RSI conditions, the latest recovery is likely to extend unless the quote holds the trend line breakout. However, a convergence of 100-bar SMA and a downward sloping trend line from February 04, currently around 1.2680, will be the key to watch. In a case where the quote rallies past-1.2680, multiple levels around 1.2760-65 will lure the USD/CAD buyers. On the contrary, a downside break of the previous resistance line, at 1.2585 now, should drag the quote back towards the 1.2500 threshold ahead of highlighting the latest low of 1.2468 for the USD/CAD bears. Though, any further weakness will be challenged by the mid-February 2018 bottom surrounding 1.2450, a break of which may not hesitate to attack the 2018 low of 1.2248. USD/CAD four-hour chart Trend: Further recovery expected  

Crude oil markets largely managed to avoid the chaos seen in other asset classes (i.e. the sharp sell-offs seen in global bond and equity markets). At

Crude oil markets avoided the sell-off seen in equity and bond markets on Thursday.Focus remains on positive demand-side fundamentals, though will shift to OPEC+, who meet next week.Crude oil markets largely managed to avoid the chaos seen in other asset classes (i.e. the sharp sell-offs seen in global bond and equity markets). At one point, front-month futures contracts for the American benchmark for sweet light crude (West Texas Intermediary or WTI) dropped as low as the $62.60s but has since recovered back to the mid-$63.00s, though has been unable to press onwards beyond session (and cycle) highs in the $63.70s. In the end, WTI finished Thursday’s trade flat at $63.45. Futures trade, which paused as it normally does at 22:00GMT, has just restarted again, as it usually does at 23:00GMT. Driving the day In terms of crude oil-specific fundamentals drivers on Thursday, there was not much. For the most part this week, focus has been on positive demand-side fundamentals (i.e. vaccine rollouts, more US fiscal stimulus incoming, dovish/accommodative Fed and other central banks). But focus is increasingly shifting onto the supply side; this week’s US crude oil inventory data showed surprise builds and there might me more US inventory builds ahead as oil refiners struggle to recover from recent US weather disruptions as quickly as oil extractors. Meanwhile, OPEC+ sources highlight divergent views in the cartel as to how much supply they should bring back online in April, if any. In the end, this is likely to largely be determined by how much of their 1M barrel per day in voluntary output cuts (in February and March) the Saudi Arabian’s choose to bring back in April; if the Saudis bring back the whole 1M barrels per day, this reduces the scope for how much the rest of the cartel can increase output. There has also been some geopolitical news that might be taken as crude oil negative; US officials announced that US President Joe Biden held a call with Saudi King Salman where they discussed regional security, including the option for a diplomatic end to war in Yemen. However, the US reiterated its commitment to help Saudi Arabia defend itself against attacks from Iranian-aligned groups. Reportedly, King Salman discussed with Iran's “stability-disturbing behaviour” in the region with the US President but stressed that the country is keen to reach a political solution to the conflict in Yemen. If the war in Yemen can be brought to a halt and some kind of peace deal brokered, this would reduce some of the geopolitical risk premia priced into crude oil markets and would be a negative for crude oil markets. But it is likely to be a long, difficult road to any deal.    

Amid the global stock market havoc triggered through the rally in the Treasury yields, Bloomberg came out with an analytical piece suggesting the jump

Amid the global stock market havoc triggered through the rally in the Treasury yields, Bloomberg came out with an analytical piece suggesting the jump in the Asian central banks’ foreign exchange reserves as the key buffer to the region versus the wild moves. The report notes that the central banks in Asia’s emerging economies added $467.7 billion to their foreign-exchange reserves last year, the most since 2013. “Rising yields have historically triggered currency volatility and driven up borrowing costs in the region,” said the piece further. The total holdings by emerging Asian economies, excluding Australia and Japan came in as $5.74 trillion versus $5.8 trillion hits in 2014, per the update. The report quotes Chua Hak Bin, senior economist at Maybank Kim Eng Research Pte in Singapore to highlight the fear of taper tantrums if the Fed exits prematurely from their bond-buying program. “That will be another blow to poorer emerging markets, already lagging the recovery because of the uneven vaccine rollout and impact from lockdowns,” said Mr. Bin further. Also suggesting further optimism for Asia were the comments from Alex Wolf, Hong Kong-based head of investment strategy Asia at JP Morgan Private Bank. The investment banker said, “Asia looks set to enjoy a cyclical rebound with low real rates to shield against volatility. Bear in mind that insofar as rising yields are a reflection of growth optimism, a lot of that growth should come from Asia in 2021.” Read: Wall Street Close: Equity markets on the ropes as bond yields surge

Silver picks up bids to $27.45 during the initial Asian session trading on Friday. The white metal rose beyond $28.00 before declining to $27.35 the p

Silver prices consolidate latest losses while staying beyond 21-day SMA for one month.Seven-week-old horizontal resistance, monthly falling trend line guard immediate upside.50-day SMA, ascending support line from November add filters to the downside.Bearish MACD, strong resistance to the north and US dollar gains keep sellers hopeful.Silver picks up bids to $27.45 during the initial Asian session trading on Friday. The white metal rose beyond $28.00 before declining to $27.35 the previous day. Even so, 21-day SMA continued on its role of strong short-term support since late-January. It should, however, be noted that the bearish MACD signals and nearness to the key resistance confluence, including multiple highs marked since January 06 and a downward sloping trend line from February 01, challenge the silver bulls. Also on the negative side is the latest US dollar bounce off a seven-week low amid marked havoc led by the Treasury yields. Hence, the quote’s further upside depends upon how well it can break the $28.00 resistance, which in turn needs validation from the weekly top of $28.33 before challenging the monthly high near $30.06. Meanwhile, a downside break of 21-day SMA, at $27.28 now, will be probed by a 50-day SMA and an ascending support line from early January, respectively around $26.50 and the $26.00 threshold. In a case where the precious metal drops below $26.00, the yearly bottom surrounding $24.20 may gain the market’s attention. Silver daily chart Trend: Sideways  

NZD/USD shows a little reaction to New Zealand’s (NZ) January month trade numbers despite keeping the previous day’s downbeat performance around 0.737

NZD/USD licks its wounds after snapping the five-day winning streak with the heaviest losses in a month.New Zealand Trade Balance for January turned negative on MoM, Exports, Imports also weakened.Antipodeans take clues from the market’s reflation fears, US dollar strength.Risk catalysts keep the driver’s seat, Treasury yields are worth observing.NZD/USD shows a little reaction to New Zealand’s (NZ) January month trade numbers despite keeping the previous day’s downbeat performance around 0.7370 during the initial Asian session on Friday. New Zealand’s January month trade figures suggest the headline Trade Balance dropped from upwardly revised figures of $69M and $2.98B to $-626M and $2.75B respectively on MoM and YoY. Further details suggest that the Imports dropped from $5.32B to $4.82B whereas the Exports declined to $4.19B versus $5.38B. Market players are more concerned with the global rout in bonds off-late. The surge in Treasury yields weighed down the equities and helped the US dollar to stage a strong comeback from a seven-week low. The same dragged the NZD/USD down to mark the heaviest drop in a month following its run-up to the highest since August 2017 during Thursday’s Asian session. While the risk-off mood strengthened the US dollar and offered heavy losses to the Antipodeans, second thoughts on the RBNZ’s acceptance of Finance Ministry guidelines, to consider housing and government policies for taking a decision, also weighed on the kiwi prices. “The RBNZ’s dual mandate remains unchanged, but from now on, the Bank must assess the impact of monetary policy on housing when making decisions. An important change, but not one that speaks to a need for tighter monetary policy,” said the Australia and New Zealand Banking Group (ANZ). It’s worth mentioning that the mixed ANZ figures for New Zealand couldn’t withstand the strong US Q4 GDP, Durable Goods Orders and Jobless Claims, which in turn exerted extra downside pressure on the NZD/USD prices. On a risk-positive side, Johnson & Johnson’s vaccine turned out to be the strongest cure for the coronavirus (COVID-19) with one-jab status after AstraZeneca, Pfizer and Moderna conveyed their upbeat results of the two-jab process. Also on the brighter side were the hopes of the US covid stimulus as the policymakers are up for voting on the much-awaited $1.9 trillion relief package in the House. Amid these plays, Wall Street benchmarks dropped heavily, Nasdaq down over 3.5%, whereas the US 10-year Treasury yields refreshed yearly top around 1.60% before easing to 1.54%, up 15 basis points (bps) by the end of Thursday’s North American session. Looking forward, chatters surrounding the US covid stimulus and vaccine news should join the fresh tension between the US and China, over the South China Sea. However, major attention will be given to the US Core PCE data and Treasury yields’ moves. Technical analysis Failures to keep the upside break of multiple highs marked since September 2017, around 0.7435-40, NZD/USD is likely to revisit January tops near 0.7315. However, its further weakness will have a bumpy road before breaking an ascending support line from November 2020, at 0.7200 now.  
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