Daily Market Analysis By Z Forex

[Z Forex]

Follow US non-farm payroll, but the DXY softens and US Treasury yields are decreasing.

Today, the market eye will be on US non-farm payroll and the consensus for a healthy net 200K NFP added for November vs 261K previously. Also, the unemployment rate is expected to remain unchanged at %3.70 while the hourly earnings could soften somewhat. Yesterday, the personal consumption expenditure price index in the United States released and the data increased by %6.00 Year-on-Year in October of 2022, below %6.3 in September. It is the lowest print so far this year. Thus, The DXY index fell to the 104.70 level. In addition, it should be kept in mind that Powell’s message was not very different from his FOMC presser and the Dollar Index (DXY) pullback seems to be moderating.

Furthermore, the US ISM manufacturing surprised to the downside at 49.00 (vs previous 50.20) with price paid at 43.00 (vs. prev. 46.60). Hence, the DXY broke under the 105-figure (200-dma) while US Treasury 10y yield decreased further to levels around %3.54.

Markets also follow Covid development in China after officials appeared to have pivoted away from strict restrictions. Apart from US NFP release, we watch several centralbank official speaks including ECB Lagarde, Villeroy, Guindos, Fed Barkin and Fed Evans.

EURUSD

The EURUSD is trading around 1.05250 level. The DXY decreased sharply after the s US PCE core deflator softened for October. In other words, The DXY broke under the 105 level (200DMA). The focus will be on another Lagarde’s speech today. Overnight-Index -Swap (OIS) indicate a 50bps hike expected from ECB in December. Hawkish ECB, potential for markets to focus on FED downshift into December as well as China’s re-opening might have skewed risks to the upside for the EURUSD. In short, the sentiment remains supportive of the Euro.

Technically, the pair is approaching 1.0615 (2022 the late June peak), before that level the first resistance could be 1.0560. Further bullish extension is likely to be faster since the risk sentiment is positive today. Following that, 1.0770 will be in focus. On the downside, the support remains around 1.0500. Any pullback could meet support at 1.0440.

Support: 1.0500 – 1.0440 – 1.0385

Resistance: 1.0560 – 1.0615 – 1.0770

GBPUSD

The pound is hovering around 1.2240 level. The speech from Jerome Powell was dovish, so the market turns risk on mood. The pound reached highest level since September. It is expected hawkish interest rate policy from BOE. Easing coronavirus
restrictions in China give support the pair. In addition, inflation in UK do not show signs of meaningful slowdown yet. Today, U.S nonfarm payrolls will be announced. If the data come same level with expected, FED’s dovish conduct and cable’s rising could continue.

Technically, the pound is increasing sharply and approaching June highest level. However, the daily RSI (14) is hovering at the overbought condition. The bear investors need validation from the 200DMA at 1.2150. On the upside, the resistance at 1.2310, then at 1.2430 (50WMA). On the downside, the key support is at 1.2150. If that level breaks down, the next support will be at 1.2060.

Support: 1.2150 – 1.2060 – 1.1.2000

Resistance: 1.2310 – 1.2430 – 1.2575

XAUUSD

The yellow metal is hovering around 1800 level. The rally started with the FED's dovish appearances and a slowdown in rate hikes. Dovish message from FED Powell and China reopening optimism lead the Dollar Index to soften. Today, U.S nonfarm payrolls will be announced. If the data come same level with expected, FED’s dovish conduct and yellow metal’s rally could continue. Also, a 75bps rate hike priced by the investors for December meeting quite a few reducing with the probability of %20. Today, US 10-year treasury yield was last seen around at %3.55 level while US 2-year treasury yield was at %4.27. Additionally, the real yield for US10-year is decreasing as 104 bps.

Technically, above 1795 level, the sentiment for gold price is positive. Support is seen at 1795(200dma) level. More downside, the support is at 1784 level. On the upside, the resistance is at 1768 level. On the additional upwards, 1805 is seen as crucial resistance level.

Support: 1795 – 1784 – 1768

Resistance: 1805 – 1815 – 1845

UKOIL

Brent traders was focused whether OPEC cut production at the meeting on 4 December. Black metal prices appear flatting and hover around 87.10 level. OPEC had cut production with 2 million barrel per day in October meeting. The relevant amount is expected to be kept constant by the market. FED’s dovish conducts and increasing risk appetite supported the black metal. Today, Nonfarm payrolls will be announced. İt could be decisive on Black metal’s direction. Besides, Covid-19 restrictions and protests in China are followed closely. Last week, U.S inventories data showed that reducing more than expected. Increasing demand indicators will limited Brent prices falling.

Technically, the momentum is positive for the black metal above 84.75 (100WMA). On the downside, 86.60 is seen as support level. If broken, the next level will be at 85.50. The main resistance is at 89.35 level. More upside, 90.20 (21DMA) will be seen the next resistance.

Support: 86.60 – 85.50 – 84.45

Resistance: 89.35 – 90.20 – 91.30

 

[Z Forex]

Broader Positive Risk Sentiment and China reopening rumors on the agenda.

The dollar index dropped carelessly after FED Powell’s speech at the Brookings Institution. Although FED officials give speech about that the rate will be hiked, the market priced that FED will only hike 50bps in December. In addition, the market has focused on easing Covid19 restrictions. Hence, the risk impulse turns positive.

Furthermore, FED’s Evans had a speech and he said that he sees slower rate hike pace, slightly higher peak rate. The Treasury yield have been supported by FED’ Evans. Today, US10-year treasury yield is around %3.53 while US2-year bond yield is hovering around %4.32. The spread US10Y2Y widens -79bps. A negative 10-2 yield spread has historically been viewed as a precursor to a recessionary period, but has occurred 6-24 months before the recession occurring, and is thus seen as a far-leading indicator.

Besides, The Caixin China General Services PMI fell to 46.7 in November 2022 from 48.4 in October, pointing to the third straight month of drop. Today, the inflation data in Turkey will be released. The annual inflation rate in October was at %85.50 YoY, but this time a decrease waiting for the inflation to %84.65 YoY. Also, the investors are looking for the signs about the health of US economy. Hence, they will focus on US ISM service PMI.


EURUSD

EURUSD is trading around 1.0575 level. Risk-on mood remain firm because of that the DXY is decreasing dramatically. In addition, bets smaller FED rate hikes continue to remain supportive for the pair. On the other hand, the European Central Bank (ECB)’s inflation target at %2.00. Yet, inflation pressure continues in Eurozone. Thus, ECB raised the rates 200bps since July to %1.50. Also, more hawkish ECB gives way to the pair to be supportive.

Technically, below 1.0500 level, the momentum is negative. Support remains around 1.0430. Any pullback could meet support at 1.0365 (200DMA). The daily RSI is trading parallel to overbought condition level. On the upside, 1.0615 should be followed. Further bullish extension is likely to be faster since the risk sentiment is still positive.

Support: 1.0520 – 1.0430 – 1.0365

Resistance: 1.0615 – 1.0710 – 1.0770

GBPUSD

The pound continues to rise due to easing DXY and is hovering around 1.2330 level. FED’s dovish speech and increasing risk appetite supported the DXY falling. Cable’s traders are waiting BOE’s decision at the meeting on December 15. It is expected hawkish interest rate policy from BOE. Also, FED’s meeting will come true on December 14. So, these meeting will be decisive for cable’s direction. Easing
coronavirus restrictions in China also give support the pair. This week, increasing risk appetite could be supportive on cable’s prices.

On the daily chart of the pound, below 1.2395 (50-WMA) level the momentum will be negative. The weekly stochastic is very above overbought condition. On the downside, the key support is still at 1.12260. If that level breaks down, the next support will be at 1.2155. On the upside, the resistance at 1.2395, then at 1.2600.

Support: 1.2260 – 1.2155 – 1.2060

Resistance: 1.2395 – 1.2600 – 1.2650

XAUUSD

The yellow metal is trading around 1803 level. The risk appetite is still positive. The investors are waiting for US ISM Services PMI data today. However, the high US nonfarm Payroll data led to the odds of FED’s rate hike slowdown fail a fair amount. Furthermore, a 50bps rate hike priced by the investors for December meeting with the probability of %80. Today, US 10-year treasury yield was last seen around at %3.53 level while US 2-year treasury yield was at %4.32. Additionally, the real yield for US10-year is increasing 93 bps.

Technically, above 1795 level, the sentiment for gold price is positive. Support is seen at 1785 level. More downside, the support is at 1778 level. On the upside, the resistance is at 1815 level (2022 July high level). On the additional upwards, 1825 is seen as crucial resistance level.

Support: 1795 – 1785 – 1778

Resistance: 1815 – 1825 – 1845

UKOIL

OPEC meeting came true yesterday and participants agreed same level cut those 2 million barrels per day. Thus, selling pressure continues for Black metal. Today, brent is hovering around 85.95 level. Due to the Russian invasion of Ukraine, the G7 countries, the Eurozone and Australia have decided to apply a ceiling price of $60 per barrel to Russian oil starting today. Besides, due to FED’s dovish speech and increasing risk appetite supported the DXY falling. But it does not enough to limited black metal’s falling. This week, Covid-19 restrictions and protests in China are followed closely. Increasing demand indicators could limited Brent prices falling.

Technically, the momentum is negative for the black metal below 85.10 (100WMA). On the downside, 84.05 is seen as support level. If broken, the next level will be at 82.80. The main resistance is at 87.90 level. More upside, 89.65 (21DMA) will be seen the next resistance.

Support: 85.10 – 84.05 – 82.80

Resistance: 87.90 – 89.65 – 91.35

 

[Z Forex]

Risk appetite is mixed before the news from the FED. Today, Lagarde on stage before the mid-December meetings.

Growth data in the European region, third quarter growth figures came in above expectations. Third quarter annual growth was announced as %2.3, while expected %2.1. Now all eyes are on ECB President Lagarde's speech. With the strong data coming in, Lagarde's hand is relaxed to set policies regarding tightening.

US Unit Labor Costs and Nonfarm Labor Productivity data announced are positive. In the third quarter of 2022, Unit Labor Costs rose %2.4, below expectations of a %3.5 increase, while Nonfarm Labor Productivity in the US rose %0.8, well above expectations of a %0.3 increase.

Bank of Canada continues to rise interest rates like other central banks. Yesterday, The Bank brought the interest rate to %4.25 with an increase of 50 bps. Members also signaled that the rate hike should continue until the inflation target is reached.

According to the data released this morning, although Japan shrank by %0.8 in the third quarter, this figure is below the expectations of %1.1 contraction. Strong Japanese data is suppressing the rise of the Yen parity, but this needs to be supported by a dovish stance from the FED.

Markets are calm today. Today, we will follow US Initial Jobless Claims. With this data, the FED can find a sign for the employment levels and considers for its interest policy. ECB President Lagarde is also expected to speak. Signals are awaited from Lagarde regarding the decisions the ECB will take at its meeting on December 15. Besides, traders started to wait U.S. inflation datas which will be announced tomorrow.

EURUSD

The pair was fluctuating near the psychological level (1.0500) and hovering around 1.0520 levels. It was supported by strong growth data from the Euro region and limited its decline. Today, pair traders will follow Lagarde's speeches. With the upcoming hawkish statements, the parity may continue to rise, but this needs to be reinforced by the dovish stance from the FED.

Technically, below 1.0540 level, the momentum is negative. Support remains around 1.0450. Any pullback could meet support at 1.0360/50 region (200DMA). The daily RSI is below overbought condition level. On the upside, 1.0560 should be followed. Further bullish extension is likely to be slower since the risk sentiment is still mixed today.

Support: 1.0450 – 1.0390 – 1.0360/50

Resistance: 1.0540 – 1.0560 – 1.0610

GBPUSD

Cable moves mixed against the dollar. Although macro data from the British side supports the GBP against the Dollar, the rise in DXY is suppressing the rise in the pound. With the strengthening US economic data, the FED's hand is getting stronger for the continuation of monetary tightening. DYX limited its falling and try to hold above 105.00 levels. This is causing the sterling's rise against the dollar to be suppressed.

On the daily chart of the pound, below 1.2390 (50-WMA) level the momentum will be negative. The daily stochastic is very below overbought condition. On the downside, the key support is still at 1.2131 (200DMNA). If that level breaks down, the next support will be at 1.2050. On the upside, the resistance at 1.2260, then at 1.2310.

Support: 1.2131 – 1.2050 – 1.2000

Resistance: 1.2260 – 1.2310 – 1.2390

XAUUSD

The yellow metal turned positive yesterday with a sudden rise. Uncertainty in the interest rate policy of the FED prevents the upward movement of gold. Positive US data strengthens the hand of the FED not to slowdown the tightening. Yellow metal traders’ eyes at the Fed meeting on December 14. Expectations for a 50 bps rate hike at the meeting continue to decline. A 50bps rate hike priced by the investors for December meeting with the probability of %75. Today, US 10-year treasury yield was last seen around at %3.46 level while US 2-year treasury yield was at %4.29. Additionally, the real yield for US10-year is increasing 88 bps.

Technically, above 1764 (21DMA) level, the sentiment for gold price is positive. Support is seen at 1773 level. More downside, the support is at 1750 level. On the upside, the resistance is at 1795 level. On the additional upwards, 1815 is seen as crucial resistance level.

Support: 1773 – 1764 – 1750

Resistance: 1795 – 1815 – 1838

UKOIL

Black metal continues its decline. Positive Covid-19 news from China does not prevent oil from falling. It is currently hovering around 78.10. The price cap for Russian oil still continues to be discussed. But tomorrow's U.S. Producer inflation data can be determinant for oil price. The strengthening of DXY also supports the decline of oil. Uncertainties over oil seem to continue for a while.

Technically, the momentum is negative for the black metal below 87.19 (21DMA). On the downside, 76.50 is seen as support level. If broken, the next level will be at 75.00. The main resistance is at 80.00 level. More upside, 82.10 will be seen the next resistance.

Support: 76.50 – 75.00 – 73.80

Resistance: 80.00 – 82.10 – 83.50

 

[Z Forex]

Eyes in the market will be Central Banks’ decisions on interest rate policies.



This week, the market will be shaped by policies from central banks. Markets priced 50bps points higher from the Fed, BoE and ECB as a whole. While the policy rate will rise from %4.0 to %4.50 with the FED's interest rate hike, with BoE's increase rate will reach %3.50 from %3.0. The ECB's deposit interest rate will increase from %1.5 to %2.0.



Despite the fact that the more-than-expectation producer prices data came from the US last week, which caused minor concerns in the market, the expectation of a 50bps score increase from the FED did not change much. However, as of this morning, there is a slight decrease in risk appetite. According to the CME FedWatch Tool, the Fed's 50bps increase fell to %75.

The market is pretty calm today. Growth and manufacturing production data from the UK will shed light on the BoE's interest policy meeting on Thursday. Recession concerns in the UK are quite high. However, although the Macro data looks negative, a hawkish stance is expected from the BoE. Because inflation is still at record levels.

Later today, Bank of Canada Governor Macklem has a speech. Last week, the BoC continued to increase interest rates, increasing the policy rate level to %4.25 with an increase of 50 bps, and signaled that the hawkish stance would continue. Today, parallel statements are expected from the governor.


EURUSD

The pair is moving around 1.0500 (psychological level) again and was last seen 1.0515 levels. The US Consumer Price Index, which will be announced tomorrow, is putting pressure on the pair. A 50 bps increase from the ECB is considered certain, but there is some uncertainty on the FED side. With the high inflation data to be announced tomorrow, the Euro may decline slightly against the dollar.

Technically, below 1.0540 level, the momentum is negative. Support remains around 1.0490. Any pullback could meet support at 1.0360/50 region (200DMA). The daily RSI is nearly overbought condition level. On the upside, 1.0595 should be followed. Further bullish extension is likely to be slower since the risk sentiment is mixed.

Support: 1.0490 – 1.0440 – 1.0355

Resistance: 1.0595 – 1.0630 – 1.0745

GBPUSD

Cable traders are following the upcoming data stream. We started the new week with a decrease in risk appetite. That's why the pound is back to 1.2225 levels. With the GDP data to be announced today, the signals about the economic slowdown will be more certain. Because the fears of recession on the English side are quite high. However, the number of people who expect a hawkish stance from the BoE is still high. With a strong future GDP data, this belief may increase even more.

On the daily chart of the pound, above 1.2120 (200-DMA) level the momentum will be positive. The daily RSI (14) is very close to overbought condition. On the downside, the key support is still at 1.2120 (200-DMA). If that level breaks down, the next support will be at 1.2040. On the upside, the resistance at 1.2320, then at 1.2380.

Support: 1.2195 – 1.2120 – 1.2040

Resistance: 1.2320 – 1.2380 – 1.2440

XAUUSD

Yellow metal's rise has been limited. The week started with declining risk appetite and gold is under selling pressure. It is currently hovering around 1789 levels. Although it increased its bullish expectations last week, it cannot hold above the critical level of 1805. The fact that the US Producer Price Index was higher than expected also increased the uncertainties about the interest rate hike by the FED. According to the CME FedWatch Tool, the Fed's 50 bps increase fell to 75%. This increases the selling pressure on gold. Today, US 10-year treasury yield was last seen around at %3.56 level while US 2-year treasury yield was at %4.34. Additionally, the real yield for US10-year is increasing 91 bps.

Technically, above 1792 (200-DMA) level, the sentiment for gold price is positive. Support is seen at 1770 level. More downside, the support is at 1760 level. On the upside, the resistance is at 1805 level. On the additional upwards, 1815 is seen as crucial resistance level.

Support: 1770 – 1760 – 1745

Resistance: 1805 – 1815 – 1845

UKOIL

Black metal has stopped its decline and is currently hovering around 76.40. There was a threat of production cuts from Russia regarding the price cap of European region. Developments in China are also in the direction of the removal of Covid-19 policies and increasing the demand for oil. However, these developments are not enough for the rise of oil. Inflation data from the US and the FED's interest policy are the developments that oil investors expect. The strengthening of DXY also supports the decline of oil. Recession fears will shape with will be announced data from US.

Technically, the momentum is negative for the black metal below 85.50 (21DMA). On the downside, 76.10 is seen as support level. If broken, the next level will be at 75.15. The main resistance is at 77.95 level. More upside, 80.20 will be seen the next resistance.

Support: 76.10 – 75.15 – 73.25

Resistance: 77.95 – 80.20 – 83.25

 

[Z Forex]

EURUSD

The pair hold above the 1.0600 and is currently 1.0631 level. It tested 1.0740 level after the central banks interest rate decisions. However, the pair could not see that level again. Due to President Lagarde speech the pair holds strength against dollar. Lagarde said that they can raise interest rates by 50 bps in the next meetings. Last week's Eurozone Manufacturing PMI from S&P Global data came in much higher than expected, and it may have an impact on the US GDP and PCE price index the pair prices that will be announced this week.

On daily chart, the pair is consolidating in a wider range 1.0590 – 1.0740. Technically, above 1.0475 (21DMA), the momentum will be positive. Also, the daily RSI is returning from overbought condition. Support is seen at 1.0590, then 1.0545. Resistance 1.0735/40 region. If the break comes, the pair continue to rise till towards 1.0830 level.

Support: 1.0590 – 1.0545 – 1.0495

Resistance: 1.0735 – 1.0830 – 1.0940

GBPUSD

The pound tested 1.2445 levels after the central banks decision but bounced back hard from there. It is currently hovering around 1.2175 levels. However, macroeconomic uncertainties and recession fears are on the agenda in the UK. On Tuesday, the nurses decided to march to protest the wages offered to them. Along with these developments, the US GDP and PCE price index, which will be announced on Friday, will be followed closely. Risk appetite in the market together with macroeconomic uncertainties will have an impact on cable value.

On the daily chart of the pound, above 1.2100 (200-DMA) level the momentum will be positive. In addition, the daily RSI (14) is consolidating between 40.00-60.00 range. On the downside, support at 1.2150 (21-DMA), before at 1.2105. On the upside, the resistance at 1.2210, then at 1.2320.

Support: 1.2150 – 1.2105 – 1.2065
Resistance: 1.2210 – 1.2320 – 1.2445

XAUUSD

The yellow metal is trying to rise above the 1795 level and was last seen at the 1793 level. Although in quite a hawkish stance from central banks, the fall of gold was limited. Gold, which bounced up from 1773 levels after the central banks' decisions, is waiting for the US PCE price index data to be announced on Friday. However, the fact that this week is Christmas week indicates a calm market. DXY is trying to hold above 104.00 level. DXY and risk appetite will have an impact on the direction of gold. 25 bps rising is on the table for February meeting from now. According to the CME FedWatch Tool, the Fed's 25 bps increase rose to %72 in February meeting. US 10-year treasury yield was last seen around at %3.52 level while US 2-year treasury yield was at %4.19. Additionally, the real yield for US10-year is increasing 117 bps.

Technically, 1787 (200-DMA) level, the sentiment for gold price is negative. Support is seen at 1775/72 region. More downside, the support is at 1765 level. On the upside, the resistance is at 1788/92 region. On the additional upwards, 1805 is seen as crucial resistance level.

Support: 1775/72 – 1765 – 1752

Resistance: 1788/92 – 1805 – 1820

UKOIL

Black metal is trying to hold above 80.00 level and is hovering around 79.48. While positive news about covid-19 in China supported the price of oil, the more hawkish stance of central banks limited the rise in prices. On Friday, US energy department announced that the US government will begin a buyback program for oil. On the other hand, European energy ministers will meet to limit the price of Russian oil. The news from here and the decisions that Russia will take against the sanctions will be very effective for the pricing of black metal.

Today, the momentum is negative after hawkish central banks’ decisions. Technically, below 81.72 (21DMA). On the downside, 79.50 is seen as support level. If broken, the next level will be at 78.50. On the upside the resistance at 81.70, then at 82.50

Support: 79.50 – 78.50 – 77.20

Resistance: 81.70 – 82.50 – 83.65

 

[Z Forex]

DXY continues its decline during the Christmas week. With this decline, metals started to rise. US Consumer Confidence and PCE Price Index data is now awaited.



The echoes of BOJ's hawkish stance continue in the market. BoJ decided to allow 10-year government bond yields to increase 0.50 points from 0.25. That's why, Japanese Yen appreciated against dollar and was last seen at 132.170 level. With these decision, risk appetite mood was on and DXY started to fall. DXY is trying to hold above 103.50 level.

Yesterday, the annual producer inflation in Germany fell %3.9 on a monthly while the market expectation was %2.5 fall. This data came in with a decrease of %4.2 in October and the data for November showed that the peak point in inflation was seen. Also the yearly PPI data fell to %28.2 in November from %34.5. It was below than expectation compared by %30.6.

The markets focused on US GDP and PCE Price Index which will be announced this week. Currently, due to BOJ’s decisions, DXY is falling and metals rally. The data coming from the US will remove some of the uncertainty in the market.

Today, Canada Core CPI and US Consumer Confidence data will be released. Canada CPI data is expected to increase %0.2 in November, while US Consumer Confidence data is expected to increase slightly to 101.0.

Finally, US Crude Oil Inventories data will be released by The Energy Information Administration (EIA) today. This data will be an important indicator for the situation on demand for oil. Currently, the weekly change is expected to decrease by 1,657M barrels.


EURUSD

The pair is hovering around 1.0610. DXY continues falling due to BoJ hawkish decision. However the pair's rising limited and did not exceed 1.0650 level yesterday. The positive news about inflation continues to come from the European Region, but traders are focused on the US PCE Price Index, which will be released on Friday. The pair tested 1.0740 level after the central banks interest rate decisions. However, the pair could not see that level again.

A daily low is near 1.0578 (yesterday’s low). Still, the pair is consolidating in a narrow range 1.0575 – 1.0660. Technically, above 1.0515 (21DMA), the momentum will be positive. Also, the daily RSI is nearly overbought condition. Support is seen at 1.0575 (yesterday’s low), then 1.0490. Resistance 1.0660 region. If the break comes, the pair continue to rise till towards 1.0735 level.

Support: 1.0575 – 1.0490 – 1.0440

Resistance: 1.0660 – 1.0735 – 1.0830

GBPUSD

The pound is hovering around 1.2160. Cable, which reached above the 1.2200 level after the surprise decision of BOJ, could not hold at these levels. This week will be quite calm due to Christmas. Macroeconomic uncertainties and recession fears are on the agenda in the UK. Along with these developments, the US GDP and PCE price index, which will be announced this week, will be followed closely. Risk appetite in the market together with macroeconomic uncertainties will have an impact on cable value.
Daily closing below the critical 200DMA will lead a fresh downsing toward to the level of 1.1798 (50DMA). Yet, the daily stochastic is nearly oversold condition. On the downside, support at 1.2100 level which is the rising trend line, before at 1.2025. On the upside, the resistance at 1.2230, then at 1.2300.

Support: 1.2100 – 1.2025 – 1.1950

Resistance: 1.2230 – 1.2300 – 1.2375

XAUUSD

Yesterday, while the pairs were calm, the yellow metal rally. Gold is currently hovering around 1812 levels and trying to hold above 1815. Gold, which has risen after the BOJ's decision, is focused on Consumer Confidence data from the USA today. In addition, the US PCE price index data to be announced on Friday will also have an impact on yellow metal prices. 25 bps rise in February meeting showed a little increase. According to the CME FedWatch Tool, the Fed's 25 bps increase is %69 in February meeting. US 10-year treasury yield was last seen around at %3.70 level while US 2-year treasury yield was at %4.25. Additionally, the real yield for US10-year is 120 bps.
Technically, above 1785 (200-DMA) level, the sentiment for gold price is positive. Support is seen at 1785/90 region. More downside, the support is at 1770 level. On the upside, the resistance is at 1830 level. For the additional upwards, 1845 is seen as crucial resistance level.

Support: 1785/90 – 1770 – 1756
Resistance: 1830 – 1845 – 1870

UKOIL
Black metal focused on the weekly Crude oil change that will be announced today. It is currently hovering around 80.00 and trying to hold this level. Oil prices started to rise due to buyback plan by US government and BoJ's more-than-expectation hawkish stance was weakened DXY. However, black metal's rising was limited. Chinese Covid-19 uncertainties continues and it also pressured prices. On the other hand, European energy ministers agreed to limit the price of Europen natural gas prices. However, it is wonder that what sanctions Russia will take against the Euro region price cap and these news will be very effective for the pricing of black metal.
Today, the momentum is negative after hawkish central banks’ decisions. Technically, below 81.30 (21DMA) level, the sentiment for black metal price is negative and seems to be sequezee exactly at their current level. On the downside, 79.50 is seen as support level. If broken, the next level will be at 78.50. On the upside the resistance at 80.75, then at 81.30.

Support: 79.50 – 78.50 – 77.20
Resistance: 80.75 – 81.30 – 82.50

 

[Z Forex]

Recession fears decreased with the data of increasing US Consumer data. DXY continues its decline. Oil jumped with increasing demand.

The US Consumer Confidence data jumped to 108.3, while the expectations were 101.0. With this data, it was seen that the fears of recession for consumers were somewhat left behind. With this news, the US stock markets started to take back their losses after the FED.

Canada’s annual inflation rate rose to %6.8 in November. The rate was more than expectations of %6.7. The increase in energy prices and food prices played a role in this increase. The data rose slower by %0.1 in November than previously month of %0.7 on a monthly basis. however, Canadian inflation rate showed slowing not much as expectations.

Stocks of crude oil in the US was also announced by US Energy Information Administration yesterday. US oil fell 5.894M barrels week on week, well above market expectations of 1.657M barrels. US oil jumped to above 78$ due to reduced stocks more than expectation. While oil traders awaited to increase demand news, reducing stocks data supported these expectations.

Today, the markets are waiting the growth data from UK and US respectively. While %0.2 contraction is expected in the UK economy, strong growth data is expected on the US. In addition, US Initial Jobless Claims will be announced today. The market expectation is increasing to 221K while 211K previously.

Besides, Japan National Core CPI will be announced today. BOJ had decided surprisingly hawkish decisions on Tuesday. That’s why, CPI data from Japan will be followed closely and will examine whether Japanese central bank decided correctly. Yen hold the positive outlooks against dollar. It stucked around 132.0 levels.

EURUSD

The pair is trying to hold above 1.0650 again. DXY continues falling due to inreasing risk appetite. Yesterday, US Consumer Confidence data released which show to reduce of recession fears. Growth datas from UK and US could be decisive on risk appetite and the pair’s prices today. The positive news about inflation continues to come from the European Region, but traders are also focused on the US PCE Price Index, which will be released on Friday. The pair tested 1.0740 level after the central banks interest rate decisions. However, the pair could not see that level again.

The EURUSD pair is bouncing from 1.0600 level and touching up an intraday high around 1.0650. If the break comes, the pair continue to rise till towards 1.0735 level which is the monthly high marked in the last week. Technically, above 1.0515 (21DMA), the momentum will be positive. Also, the daily RSI is returning from overbought condition. Support is seen at 1.0590/1.0600 region, then 1.0515. Resistance 1.0660 region. A break there opens the way towards 1.0735 level.

Support: 1.0590 – 1.0515 – 1.0455

Resistance: 1.0660 – 1.0735 – 1.0830

GBPUSD

The pound is hovering around 1.2120. Cable, which reached above the 1.2200 level after the surprise decision of BOJ, could not hold at these levels. Cable decreased to lowest level for three weeks ahead of growth data which will be released today. Market expected to contraction by %0.2 for quarterly. Macroeconomic uncertainties and recession fears are on the agenda in the UK. After the nurses which walked to increase wages, ambulance workers also decided to walk due to wages. Risk appetite in the market together with macroeconomic uncertainties will have an impact on cable value.
The sterling dropped to the lowest levels in three weeks to 1.2055 level. The daily closing below the critical 200DMA will lead a fresh downsing toward to the level of 1.1815 (50DMA). Yet, the daily stochastic is well below oversold condition. On the downside, support at 1.2050 level which is the rising trend line and also the 200-daily moveing average. If a break comes, 1.1945 will be the focus. On the upside, the resistance at 1.2160, then at 1.2230.

Support: 1.2050 – 1.1945 – 1.1815
Resistance: 1.2160 – 1.2230 – 1.2310

XAUUSD

Yellow metal continues the rally and touched the 1820 level. It is currently hovering around 1814 levels. Gold traders releived with US Consumer Confidence data and reduced recession fears. Today, growth data from US and UK will be followed closely. In addition, the US PCE price index data to be announced on Friday will also have an impact on yellow metal prices. 25 bps rise in February meeting showed quite increase again. According to the CME FedWatch Tool, the Fed's 25 bps increase is %74 in February meeting. US 10-year treasury yield was last seen around at %3.65 level while US 2-year treasury yield was at %4.20. Additionally, the real yield for US10-year is 117 bps.
Gold price advanced one-week high to the level 1824 yesterday, but closed the previous day around 1815. Technically, the 21-daily moveing average (DMA) cross the 200-DMA upward. It means the bullish momentum could continue. On the upside, the resistance is at 1824 level. For the additional upwards, 1837 is seen as crucial resistance level. Support is seen at 1810 region. More downside, the support is at 1800 level.

Support: 1810 – 1800 – 1790/86
Resistance: 1824 – 1837 – 1845/47

UKOIL

Black metal jumped to 82.00 level again. US Crude Oil inventories decreased more than expectation by 5.894M barrel. Oil traders took the signal which increasing demands. Oil prices had already started to rise due to buyback plan by US government and BoJ's more-than-expectation hawkish stance was weakened DXY. Traders are waiting good news that come from China and Covid-19 cases. On the other hand, European energy ministers agreed to limit the price of Europen natural gas prices. However, it is wonder that what sanctions Russia will take against the Euro region price cap and these news will be very effective for the pricing of black metal.
Technically, above 81.90 (21DMA) the momenutm will be positive. On the downside, 80.20 is seen as support level. If broken, the next level will be at 78.30. The main resistance is at 83.20 level. More upside, 85.80 will be seen the next resistance.

Support: 80.20 – 79.55 – 78.30
Resistance: 83.20 – 85.80 – 86.20

 

[Z Forex]

Despite the hawkish Fed, US Futures, and Major currencies are steady.



The FOMC Meeting Minutes showed that FED members were still worried over high inflation and the resilience shown by the labor market.



Fed officials acknowledged that recent data on easing inflation was positive, but emphasized that they would need to see more evidence of sustained of falling rates of inflation before feeling confident in the trend. They indicated that they would continue to maintain a "tight" monetary policy until there was clear evidence that inflation was decreasing consistently.



Investors see the ceiling value of the Fed’s interest-rate range hitting 5.25% this summer and then retreating. According to the meeting minutes, none of the Federal Reserve officials expect a cut in interest rates to be necessary for 2023.



Fed members described the job market as extremely robust, citing low unemployment, continued strong employment growth, high job openings, and rising nominal wages. Some members noted that there were early indications that imbalances in the labor market, such as the number of job openings and voluntary quits, may be beginning to improve in the latter half of 2022.



On the other hand, the manufacturing sector saw a decline in activity in December. It can be understood that the Fed's forceful approach has had a cooling effect on the economy.

In the bond markets, interest rates were largely unchanged following the release of the Fed minutes. The 10-year Treasury yield decreased by 8 basis points to 3.71%, while the 2-year yield decreased by 3 basis points to 4.38%.


Investors will pay attention to PMI reports from the UK and Nonfarm Employment

EURUSD

There is market skepticism about the likelihood of a hawkish stance. The Dollar Index, which is sensitive to expectations for US interest rates, has not shown much movement and has remained within a narrow range for the day. This has resulted in choppy trading and a lack of progress for several major currency pairs. One notable example is the EURUSD pair, which was unable to sustain momentum after breaking through a support level at 1.0580, indicating a lack of focus on fundamental factors.

Technically, 1.0600 (21-DMA) level is crucial to hold price to not fall more. It may move to 1.0695/0710 region, if the 1.0595 support level works. The histogram of the MACD oscillator keeps staying in the positive area. But the moving average curve is falling.

Support: 1.0595 – 1.0580 – 1.0515

Resistance: 1.0650 – 1.0695 – 1.0745

GBPUSD

The value of the British pound against the US dollar has remained near a one-month low of $1.97, despite the recent decline in the value of the dollar. This is due to investors considering the potential future monetary policies of both the Federal Reserve and the Bank of England. The Fed has indicated that it may increase interest rates for an extended period, while the BoE has suggested that it may soon stop tightening its monetary policy due to an anticipated recession in the UK and the recent peak in inflation.

Technically, Pound is trading near 1.20s, 200-Daily Moving Average (DMA). The daily closing below the critical 1.2030 and on the downside 1.1935 area is seen as another support level. On the upside, the resistance will be at 1.2080, then at 1.2130.

Support: 1.2030 – 1.1990 – 1.1935

Resistance: 1.2080 – 1.2130 – 1.2230

XAUUSD

Gold prices remained above $1,850 per ounce on Thursday, close to their highest level in nearly seven months. This is due in part to a general weakness in the value of the US dollar. Despite this, investors have not been swayed by the Federal Reserve's signals that it does not plan to lower interest rates this year and that it may need to adopt a more restrictive monetary policy. The Fed has also left the possibility open for a slower pace of interest rate increases.

Technically, Chart shows that the 21-daily moving average (DMA) crosses the 200-DMA upward. It means the bullish momentum could continue. On the upside, the resistance is at 1860 level. For the additional upwards, 1877 is seen as crucial resistance level. Near support is seen at 1845 level. More downside, the support is at 1833 level.


Support: 1850 – 1845 – 1833

Resistance: 1860 – 1865 – 1877

XAGUSD

Silver is trading around $23 per ounce. This stability was supported by increased demand for precious metals due to economic concerns and potential supply shortages. The invasion of Ukraine by Russia and resulting geopolitical risks led to an increase in demand, while Western sanctions on Russia, a major producer of silver, threatened supply and contributed to silver reaching a yearly peak of $26.4.

Technically, Silver is still inside the uptrend channel as we see on the chart. Moreover, Investors may follow the uptrend with critical support levels that shown below. On the upside, the resistance is at 24.00 level. For the additional upwards, 24.35 is seen as crucial resistance level. Support is seen at 23.65 region. More downside, the support is at 23.35 (21-DMA).


Support: 23.65 – 23.50 – 23.35

Resistance: 24.00 – 24.15 – 24.35

USDJPY

The ISM Manufacturing PMI in the US fell to 48.4 in December, indicating that the manufacturing sector has contracted for two consecutive months. The number of job vacancies as reported by JOLTS also suggests that the labor market remains tight. The Federal Reserve has warned that any unnecessary easing of financial conditions could harm efforts to maintain price stability. The Bank of Japan is expected to revise its expectations for core inflation, which excludes energy prices and fresh food, for the years 2022 and 2023 in its quarterly macroeconomic forecasts to be released this month.

Technically, Japanese Yen fell below the 132 level due to the economic data flow during the day and then managed to stay above the 132 level. The pair is still trading below 8-21-50-200 daily moving averages (DMA). It is usually a bearish signal. In addition, there is a downtrend (Black Trend Line). If buyers come back again, it needs to break to downtrend upwards. On the upside, the resistance is at 132.70 level. For the additional upwards, 134.20 is seen as crucial resistance level. Support is seen at 130 region. More downside, the support is at 129.50 region.


Support: 131.75 – 130.55 – 129.50

Resistance: 132.70 – 133.50 – 134.20

 

[Z Forex]

Market Update: US Index Futures Positive, Major Currencies Increase, Precious Metals Up, Asian Markets Soar, Oil Rises, and US Dollar Index Downs"

In February, Chinese business activity surpassed pre-COVID levels, indicating a strong economic recovery in the country following the relaxation of most anti-COVID measures this year. According to data released on Wednesday by the National Bureau of Statistics, the manufacturing Purchasing Managers' Index (PMI) increased to 52.6. This figure was significantly higher than anticipated, surpassing expectations for a reading of 50.5 and exceeding January's reading of 50.1.
This week, the primary focus is on the U.S., German, and UK PMI data for February, with releases scheduled on Wednesday and Friday. The market is keenly observing any indications of resilience in the U.S. economy as it would provide the Federal Reserve with more flexibility to continue raising interest rates.

The United States 10-year treasury yield increased to 3.94%. The 2-10-year yield spread is at -86 bps. However, the 10Y real rate tightens to 147 bps today.

EURUSD

Fundamental Outlook: Today, investors who focus on parity will monitor the release of German PMI (Purchasing Managers' Index) data and inflation data. ECB officials have made comments suggesting the possibility of an interest rate increase of 50 basis points. It is anticipated that German inflation figures will show a decrease from 8.7% to 8.5%.

Technical Analysis: Yesterday, the currency pair trended upward, reaching the 8-day exponential moving average. However, the daily closing price failed to hold above this average. Today, there will be another attempt to maintain the price above this level. Given the high volume of economic data expected today, there is a possibility of volatile price movements as the data is analyzed. Traders should watch the support level at 1.0575 and the resistance level at 1.0620.

Support: 1.0575 - 1.0540 – 1.0480

Resistance: 1.0620 – 1.0670 – 1.0710

GBPUSD

Fundamental Outlook: Today, the British pound increased in value, which occurred after the signing of a new trade agreement between the United Kingdom and the European Union by British Prime Minister Rishi Sunak. Furthermore, in order to address double-digit inflation, it is anticipated that the Bank of England will raise the interest rates by 25 basis points to 4.25% within the next month. The UK Manufacturing PMI data for today will be monitored attentively by investors.

Technical Analysis: The technical analysis indicates that the British pound has remained supported by the 200-day moving average (blue line) and has experienced a bounce off this level as of yesterday. As a result, the pound has surged above the 1.20s, indicating bullish sentiment. However, traders should monitor the 1.2085 level as potential resistance to further upside movement, as this level has historically acted as a barrier to price increases. On the other hand, the 1.2010 level can be considered a critical support level, as a breach of this level may signal bearish pressure and lead to further downside movement. Overall, traders should pay close attention to these key levels to determine the direction of the British pound's future movements.

Support: 1.2010 – 1.1955 – 1.1905

Resistance: 1.2085 – 1.2125 – 1.2190

USDJPY

Fundamental Outlook: The Japanese yen experienced a 0.1% decline, hovering near its lowest point so far this year. This was a result of the country's manufacturing Purchasing Managers' Index (PMI) remaining in contraction through February, as indicated by recent data releases.

Technical Analysis: Currently, the currency pair is targeting the 200-day moving average, which may impede its bullish trend. To maintain its upward trajectory, the pair must overcome a critical resistance level located at 136.70. Conversely, a support level has surfaced at 135.70, which could provide a buffer for pullbacks during a bearish trend. Traders must monitor these levels closely, as they offer crucial insights into potential price movements and inform strategic trading decisions.



Support: 135.70 – 135.10 – 134.00

Resistance: 136.70 – 137.15 – 137.90

XAUUSD

Fundamental Outlook: On Wednesday, gold prices experienced an increase after a two-day rebound from their lowest levels so far this year. The market remains watchful for any additional signals related to the U.S. economy and the Federal Reserve, which could impact the price of gold.

Technical Analysis: The market is witnessing trading of 10-year interest rates at 3.95%. This comes as a result of the growing risk appetite in the global market, coupled with the potential for global economies to bounce back from the recession. Therefore, the yellow metal is being closely monitored. From a technical standpoint, there is potential for continued positive pricing at the 1822 level. However, the 1847 resistance level should be taken into account. Should this level be surpassed, the 1855/57 resistance zone becomes crucial to monitor.

Support: 1822 – 1817 – 1804

Resistance: 1847 – 1857 – 1870

XAGUSD

Fundamental Outlook: Over the course of five consecutive days, the price of silver had been declining, reaching its lowest level since late December. This was a result of several strong U.S. inflation readings and the Federal Reserve's hawkish signals, which prompted investors to move away from non-yielding assets, including metals.

Technical Analysis: The price of silver has demonstrated a bullish trend after experiencing consecutive bearish movements. However, its ascent towards the 8-day exponential moving average has been met with resistance, suggesting a potential retracement. The 0.5 Fibonacci level serves as a crucial pivot point for sustaining the upward momentum. It is worth noting that the support level of 21.20 remains significant, indicating a potential rebound from this level. As such, traders may consider entering long positions above the 0.5 Fibonacci level, with a stop-loss order placed below the 20.80 support level.


Support: 20.80 – 20.60 – 20.40

Resistance: 21.20 – 21.45 – 21.85

UKOIL

Fundamental Outlook: On Wednesday, oil prices saw an increase as the release of stronger-than-anticipated Chinese economic data sparked hopes for a rebound in demand for oil in the country. Despite indications of another significant increase in U.S. inventories, this positive news helped the markets to look past this negative development.

Technical Analysis: Brent Oil is currently attempting to break out of a long-standing downtrend channel. The price of oil has surpassed its 8-day exponential moving average and is heading towards the Kaufman moving average. Traders should keep an eye on the 84.60 level as a potential resistance, while the 83.00 level can serve as a support level.

Support: 83.00 – 81.95 – 80.90

Resistance: 84.60 – 85.95 – 87.40

 

[Z Forex]

"Market Update: US Index Futures Tumble, Major Currencies Decrease, Precious Metals Down, Asian Markets Decline, Oil Negative , and US Dollar Index Rises"

On Thursday, a majority of Asian currencies experienced a decline due to increasing concerns regarding a potentially more aggressive Federal Reserve, which led to a sudden surge in Treasury yields. The market was also impacted by a series of underwhelming economic reports from the region, which further contributed to the negative sentiment among investors.

The S&P 500 and Nasdaq experienced a consecutive decline as Treasury yields surged in response to manufacturing data that suggested inflation is likely to remain high. In addition, remarks from Federal Reserve policymakers further strengthened the possibility of a more aggressive monetary policy stance. The release of the ISM survey revealed a contraction in U.S. manufacturing in February and a rise in prices for raw materials during the same period. Investors will be closely monitoring various economic indicators such as jobless claims, quarterly productivity, and unit labor cost data. Additionally, speeches from the Federal Reserve's Waller and FOMC member Kashkari will also be under scrutiny as market participants seek to gain insight into the central bank's monetary policy stance.

The yield on 10-year Treasury notes exceeded 4% for the first time since November, peaking at 4.02%. The 2-10-year yield spread is at -88 bps. However, the 10Y real rate tightens to 150 bps today.


EURUSD

Fundamental Outlook: To counterbalance the surging demand and prevent a possible inflationary cycle caused by rising consumer prices leading to higher wages, the European Central Bank (ECB) plans to increase interest rates by the highest margin in the past forty years. The ECB's reasoning behind this move is to tame the demand and mitigate the risk of inflationary pressure on the economy.

Technical Analysis: Based on technical analysis, the pair has exhibited a strong upward momentum, crossing above the 8-day exponential moving average. The appreciation of the US dollar index, triggered by concerns about inflation and high-interest rates, has resulted in a decline in the euro. In the near term, the 1.0625 level can be considered as a support level, with the next support level being 1.0555. On the upside, the 1.0675 level can be viewed as a support level for the pair.

Support: 1.0625 - 1.0555 – 1.0535

Resistance: 1.0675 – 1.0700 – 1.0730

GBPUSD

Fundamental Outlook: The value of the Pound currency declined and its previous gains were canceled out during the trading day. This happened as investors analyzed the comments made by Andrew Bailey, the President of the Bank of England (BoE). In the morning, Bailey suggested that there could be potential for increasing interest rates in the future, but also mentioned that no decision had been made yet. This created uncertainty among investors about the BoE's dedication to maintaining stable prices.

Technical Analysis: Based on technical analysis, the British pound has been supported by the 200-day moving average (represented by the blue line) and has recently experienced a rebound from this level. This has resulted in a surge in the pound's value above the 1.20s. However, traders should be aware of the potential resistance level at 1.2085, which has historically acted as a barrier to price increases. A breach of this level would be a positive signal for further gains, while a failure to break through may lead to a pullback in price. Moreover, the 1.2010 level can be considered a crucial support level, and a break below this level may indicate bearish pressure, leading to further downside movement.

Support: 1.2010 – 1.1955 – 1.1905

Resistance: 1.2085 – 1.2125 – 1.2190

USDJPY


Fundamental Outlook: Hajime Takata, a board member of the Bank of Japan (BoJ), stated in a speech that it is imperative for the BoJ to analyze whether the economy and prices can sustain a positive cycle. While being mindful of the impact of the BoJ's significant stimulus program on market function, he emphasized the necessity of maintaining monetary easing in a patient manner.

Technical Analysis: The currency pair is currently aiming to reach the 200-day moving average, which could pose a challenge to its bullish momentum. For the pair to continue its upward trajectory, it must surpass a critical resistance level at 136.70. However, if the pair fails to break through this level, it may experience a pullback towards a newly formed support level at 135.70. Traders should keep a close eye on these levels, as they provide essential information for making informed trading decisions. A breach of the resistance level may indicate further gains, while a drop below the support level may suggest a potential bearish trend. Therefore, it is vital to consider these levels when creating a trading strategy for this currency pair.

Support: 135.70 – 135.10 – 134.00

Resistance: 136.70 – 137.15 – 137.90

XAUUSD

Fundamental Outlook: On Thursday, gold prices experienced a slight decline due to the dollar's strength, which negatively impacted the yellow metal. The release of the ISM Manufacturing PMI data heightened concerns about inflation in the United States, while simultaneously increasing expectations of an interest rate hike.

Technical Analysis: The recent price action of gold indicates a bearish trend as it was rejected from the 1844 resistance level and has since turned downwards. The 1844 level is a significant resistance area that must be monitored closely. On the downside, there are two potential support levels at 1829 and 1820, which could prevent further price declines. When analyzing the MACD, it appears that the upward trend of the MACD line is a positive signal. However, it is noteworthy that the histogram remains in the negative region, indicating negative momentum overall. Therefore, traders should exercise caution and consider a potential sell-off if the price action continues to fall below support levels.

Support: 1829 – 1820 – 1804

Resistance: 1844 – 1857 – 1870

XAGUSD

Fundamental Outlook: The ISM Manufacturing PMI data had a negative impact on silver prices as concerns about inflation and high-interest rates increased, causing the dollar index to appreciate. Additionally, the yield on the 10-year US government bond exceeded 4%, which put pressure on precious metals.

Technical Analysis: The recent trend in Silver has been bearish, but in the past two days, it has displayed a bullish reversal, indicating potential upward momentum. The price has surged towards the 8-day exponential moving average (EMA), a key resistance level. However, it faced resistance at this level, leading to a temporary pullback. Looking ahead, traders should keep an eye on the resistance level at 21.10, as a decisive breakout above this level could lead to further gains. Conversely, if the price falls below the important support level of 20.60, it could signal a continuation of the downtrend. Therefore, careful analysis of price action and trend indicators is recommended before taking any trading decisions.

Support: 20.75 – 20.60 – 20.40

Resistance: 21.10 – 21.20 – 21.45

 

[Z Forex]

"Market Update: US Index Futures Flat, Major Currencies Increase, Precious Metals Rise, Asian Markets Calm, Oil Positive , and US Dollar Index Downs"

On Friday, there wasn't much movement in most Asian currencies due to worries about the direction of U.S. monetary policy. However, the Chinese yuan had a strong performance during the week because of several positive economic indicators.

In a speech, Raphael Bostic, the Atlanta Fed President, reaffirmed the case for a 25 basis point increase in March. Meanwhile, during a separate address, Fed Governor Christopher Waller suggested that moderating inflation and economic growth may require interest rates to peak earlier than the previously anticipated 5.4%.

The focus for Friday is centered around U.S. service sector activity readings, as any indication of economic strength will give the Federal Reserve additional leeway to raise interest rates.

The yield on 10-year Treasury notes decreased to 4.03%. The 2-10-year yield spread is at -83 bps. However, the 10Y real rate tightens to 144 bps today.


EURUSD

Fundamental Outlook: Data released on Thursday showed that Eurozone inflation eased slightly to 8.5% last month from 8.6% in January. However, the decline was mainly driven by lower energy costs. Prices for most other items, such as food, services, and durable goods, continued to surge, reinforcing the concerns of some policymakers at the ECB. In summary, while Eurozone inflation eased a bit in February, the drop was primarily due to lower energy prices. The prices for most other goods continued to rise, including food, services, and durable goods, which raised concerns among some ECB policymakers.

Technical Analysis: Over the past five days, a pattern of rising bottoms has emerged in the currency pair, indicating an ascending channel. As the price continues to rise, it is likely to encounter resistance at the 1.0675 level. However, on the downside, the 1.0575 level may serve as a support for any declines.

Support: 1.0575 - 1.0555 – 1.0525

Resistance: 1.0675 – 1.0700 – 1.0730

GBPUSD

Fundamental Outlook: The Bank of England has stated that inflation is predicted to decrease to more manageable levels by the end of this year. According to a report released on Thursday, the BoE anticipates that inflation will drop from 10.1% in January to approximately 4% by year-end. The report noted that this substantial decrease is due to the exclusion of the sharp rise in wholesale energy prices from the calculation of CPI inflation. Despite remaining at elevated levels, energy prices have decreased considerably from their peak in September and October of the previous year.

Technical Analysis: The GBP/USD pair has been unable to breach the 8-day moving average and has subsequently retraced towards the 200-day moving average. This recurring trend has resulted in the formation of a descending channel within this range. Anticipate potential breakouts to occur. The 1.2005 level can be regarded as a resistance level, while the 1.1945 level can be monitored as a support level.

Support: 1.1945 – 1.1915 – 1.1845

Resistance: 1.2005 – 1.2065 – 1.2145

USDJPY


Fundamental Outlook: On Friday, data indicated that the rate of consumer inflation in Japan's capital grew at a slower pace in February than it did in the prior month. This suggests that the country's price pressures may be easing after having surged to levels not seen in over 40 years in recent months. According to the Statistics Bureau, the Tokyo core Consumer Price Index (CPI) increased by 3.3% in the 12 months leading up to February. This reading was consistent with forecasts and lower than the 4.3% growth seen in the previous month. The rise in import costs was significantly influenced by the weakening yen, as the disparity between local and U.S. interest rates led investors to sell the Japanese currency. On Friday, the yen increased by 0.1%.

Technical Analysis: The current currency pair is targeting the 200-day moving average, which could present an obstacle to its bullish momentum. To continue its upward trend, the pair must surpass a significant resistance level at 136.70. If it fails to break this level, it may experience a pullback towards a newly established support level at 135.70. These levels are critical indicators for traders to make informed decisions. A break above the resistance level may signify further gains, while a drop below the support level could signal a possible bearish trend. Thus, traders must consider these levels when formulating a trading strategy for this particular currency pair.

XAUUSD

Fundamental Outlook: On Friday, gold prices went up, and they were expected to record their first weekly increase in five weeks. This was partly due to recent remarks by officials from the Federal Reserve that helped to clarify the expected trajectory of monetary policy for the remainder of the year. To put it simply, gold prices experienced a boost on Friday, largely driven by recent statements from Federal Reserve officials that provided more clarity on the future of monetary policy for this year, which ultimately boosted investor sentiment.

Technical Analysis: Gold has recently broken out of its downtrend and moved upwards, surpassing the 8-day exponential moving average, and approaching the 21-day exponential moving average level, which could act as a resistance level at 1847. If the resistance is overcome, the next potential level to watch for is 1857. However, if gold fails to break this resistance, it may experience a pullback towards the 1834 and 1822 levels, which can be considered support levels. As such, traders should closely monitor these levels when making trading decisions for gold.

Support: 1834 – 1822 – 1804

Resistance: 1847 – 1857 – 1870

 

[Z Forex]

Market Update: US Index Futures Slightly Up, Major Currencies Mixed, Precious Metals Decrease, Asian Markets Calm, Oil Negative, and US Dollar Index Stable"


On Monday, many Asian currencies remained relatively stable as investors looked for additional information about U.S. monetary policy from Federal Reserve Chair Jerome Powell's testimony.

The positive outlook for China's economy, as indicated by a surge in business activity in February following the lifting of COVID-related restrictions, was somewhat overshadowed by the weaker-than-expected GDP forecast, which tempered investors' optimism.

The market's primary attention is currently directed towards the two-day testimony of Federal Reserve Chair Jerome Powell before the U.S. Congress (scheduled for Tuesday and Wednesday) and the release of the February jobs report on Friday, which will likely determine the course of action for the U.S. central bank in the short term.

This week, investors will be focusing on several key economic indicators, including factory orders, two speeches from Federal Reserve Chair Jerome Powell, ADP employment change, JOLTs job openings, average hourly earnings, nonfarm payrolls, and unemployment rate. These data points will likely provide insight into the health of the U.S. economy and may influence market movements.

The yield on 10-year Treasury notes decreased to 3.94%. The 2-10-year yield spread is at -90 bps. However, the 10Y real rate tightens to 138 bps today.

EURUSD

Fundamental Outlook: ECB President Christine Lagarde has reaffirmed that there is a high probability that the central bank will increase interest rates by 50 basis points (bps) this month. This decision was signaled during the last monetary policy meeting, and recent economic data has supported the likelihood of such an interest rate hike.

ECB Chief Economist Philip Lane is scheduled to give a speech on Monday regarding inflation. This could potentially provide insight into the ECB's thinking on the topic and its potential impact on future monetary policy decisions. Investors will be closely monitoring his remarks for any indications of the central bank's outlook on inflation and how this may impact its interest rate policy.

Technical Analysis: The currency pair has been exhibiting an uptrend since the previous week and has sustained it into the current week. Notably, the 21-day moving average level, which is a critical resistance level, is currently at 1.0665. If this resistance level is surpassed, it could potentially propel the price towards the next resistance level of 1.0700. Conversely, if the price experiences a downward movement, the support levels of 1.0600 - 1.0575 can be seen as a potential support region.

Support: 1.0600 - 1.0575 – 1.0535

Resistance: 1.0665 – 1.0700 – 1.0790

GBPUSD


Fundamental Outlook: The Bank of England has stated that inflation is predicted to decrease to more manageable levels by the end of this year. According to a report released on Thursday, the BoE anticipates that inflation will drop from 10.1% in January to approximately 4% by year-end. The report noted that this substantial decrease is due to the exclusion of the sharp rise in wholesale energy prices from the calculation of CPI inflation. Despite remaining at elevated levels, energy prices have decreased considerably from their peak in September and October of the previous year.

Technical Analysis: The British Pound has been in a bearish descending channel for a considerable period and is currently forming lower peaks. Its ability to surpass the 21-day moving average has been limited. A key resistance level to watch is at 1.2045. However, if the price fails to breach this level, it may continue to exhibit a bearish trend. On the downside, a potential support level to monitor is at 1.1965. If the price falls below this level, it could indicate a further decline in the Pound's value.

Support: 1.1965 – 1.1945 – 1.1905

Resistance: 1.2045 – 1.2085 – 1.2145

USDJPY

Fundamental Outlook: The Japanese yen experienced a 0.2% increase in value in anticipation of the upcoming BOJ meeting scheduled for Thursday. It is widely anticipated that the bank will maintain its record-low interest rates during this meeting.

Technical Analysis: The currency pair experienced a decline following its touch of the 200-day moving average as well as the 0.38 Fibonacci retracement level. The retracement continued until it reached the 8-day exponential moving average. As for potential support levels, a close support to watch is at 135.35. If the price falls below this level, it could indicate further downward movement. On the other hand, a key resistance level to keep an eye on is at 136.70. If the price manages to surpass this level, it could potentially indicate a bullish trend for the pair.

Support: 135.35 – 135.00 – 134.20

Resistance: 136.70 – 137.15 – 137.90

 

[Z Forex]

"Market Update: US Index Futures Decrease, Major Currencies Up, Precious Metals Flat, Asian Markets Slightly Decrease, Oil Positive, and US Dollar Index Downs"


Despite easing COVID restrictions, Chinese consumer spending remained limited in February, resulting in lower-than-expected inflation rates. The National Bureau of Statistics reported that the Consumer Price Index (CPI) rose only 1% in the 12 months leading up to February, which was significantly lower than the anticipated 1.9% and last month's reading of 2.1%.

Fed Chair Jerome Powell made statements during a Senate Banking Committee meeting. Powell suggested that the terminal fed funds rate is expected to be higher than previously anticipated, negatively impacting market sentiment.

Morgan Stanley has stated that Fed Chair Jerome Powell's prepared remarks for his semi-annual testimony suggest that the FOMC may consider increasing rates by 50 basis points at their March meeting if the incoming economic data warrants it. The investment bank also noted that any positive surprises in Friday's payroll report could lead to a more aggressive and sustained tightening cycle.

According to CME Group's FedWatch tool, traders have been increasing their wagers for a 50 basis point Fed rate hike later this month. The tool recently revealed that there is an approximately 80% probability of such a hike, up from roughly 70% on Tuesday and just 31% on Monday before Powell's first testimony.

The yield on 10-year Treasury notes increased to 3.99%. The 2-10-year yield spread is at -90 bps. However, the 10Y real rate widens to 152 bps today.

EURUSD
Fundamental Outlook: The European statistics agency reported on Tuesday that the eurozone economy did not experience any growth in the last quarter of 2022 compared to the previous quarter. Both GDP and employment growth figures were slightly revised downwards, but employment growth remained strong. According to Eurostat, economic growth in the eurozone was 0.0% in Q4 compared to Q3 and 1.8% YoY. The previously released flash estimates were 0.1% and 1.9% respectively, on February 14.

Technical Analysis: The pair is currently seeking support at the 200-day moving average level and attempting to maintain its position at this level over the past few days. Traders should pay attention to the 1.0570 level, which is likely to act as resistance for the Euro in the near future. On the downside, if the pair drops further, the 1.0520 level may serve as a potential support level.

GBPUSD
Fundamental Outlook: British investors on Thursday priced in a 25 basis points increase in Bank of England interest rates at its March meeting, following signals from the U.S. Federal Reserve indicating that it may raise its rates as well. The overnight index swap market had indicated a 90% likelihood that the BoE would increase rates on March 23 to 4.25% from 4%, with a slim chance of a pause, according to Refinitiv calculations the day before.

Technical Analysis: The British Pound has been trading in a descending triangle pattern, and it recently broke below the support level of the triangle, indicating a bearish trend. Moreover, it breached the horizontal trend support with a lengthy bearish candle, validating the downward momentum. The 1.1760 level could serve as a potential support level, while the 1.1875 level may act as resistance on the upside.

Support: 1.1760 – 1.1715 – 1.1650
Resistance: 1.1875 – 1.1900 – 1.1925

USDJPY
Fundamental Outlook: On Thursday, Japan's lower house of parliament granted approval for the government's selected candidates to assume the positions of central bank governor and deputy governors. This paves the way for a new leadership team that will be responsible for overseeing a gradual transition away from ultra-loose monetary policy.

Technical Analysis: The currency pair is presently in an uptrend and is striving to surpass the 200-day moving average. It is critical to monitor daily closing prices to confirm a continual break above this level. If there is a pullback, the 136.70 level can be viewed as a support level. Conversely, a break above the 138.20 level may indicate further upward momentum and act as a resistance level.

Support: 136.35 – 135.55 – 134.80
Resistance: 137.25 – 137.90 – 138.85

XAUUSD

Fundamental Outlook: Gold prices experienced minimal movement on Thursday and remained slightly above their lowest levels of the year. This was due to persistent concerns about an increase in U.S. interest rates, and investors' attention has shifted towards upcoming labor data to better evaluate the possibility of further rate hikes.
Technical Analysis: Gold has entered a consolidation phase following a steep decline, and the 1804 level is considered a robust support level. The 200-day exponential moving average is also situated at this level, which could further reinforce its strength as support. On the other hand, the 1826 level corresponds with the 8-day exponential moving average and may act as resistance on the upside. Traders should keep a close eye on these levels to gauge potential market movements.

Support: 1809 – 1804 – 1786
Resistance: 1819 – 1826 – 1844

XAGUSD
Fundamental Outlook: This week, silver prices were heavily impacted by the hawkish remarks made by Fed Chair Jerome Powell. He cautioned that the recent positive signs of inflation and job market recovery are likely to result in higher interest rates, exceeding market expectations. This led to a decline in silver prices.

Technical Analysis: Silver has recently witnessed a notable decline and is presently nearing the channel support of its downtrend. This level could serve as a potential support level and elicit a reaction. Traders will be closely observing the 19.80 level as a potential support level. However, if the downward trend continues, the 19.65 level may come into play as an additional support level. Conversely, the 20.40 level could serve as resistance and impede further upward momentum.

Support: 19.80 – 19.65 – 19.10
Resistance: 20.40 – 20.70 – 21.20

UKOIL
Fundamental Outlook: On Thursday, oil prices remained relatively stable after experiencing two consecutive days of significant declines. This was due to moderate demand signals from China and growing concerns about potential headwinds to crude consumption in light of hawkish signals on U.S. interest rates.



Technical Analysis: Brent oil recently broke above its downtrend, but after a significant decline, it has retraced to the level it previously surpassed for a potential re-test. It is essential to monitor whether prices can maintain above this level in the upcoming days. On the upside, the 83.90 level may act as a resistance level to watch for potential further upward momentum. Meanwhile, on the downside, the 82.50 level can be considered a support level that may prevent prices from falling further. Traders should keep a close eye on these levels to identify possible market movements.


Support: 82.50 – 81.30 – 80.20
Resistance: 83.90 – 85.35 – 86.20

 

[Z Forex]

"Market Update: US Index Futures Decrease, Major Currencies Up, Precious Metals Rise, Asian Markets Down, Oil Negative, and US Dollar Index Drops"


On Friday, Asian markets experienced a significant drop due to the decline of U.S. bank stocks in overnight trading. This led to a general shift towards lower risk investments, with many investors cautious ahead of the upcoming nonfarm payrolls data.

The Bank of Japan has kept its policy balance rate at -0.1% and the 10-year yield target at around 0% during Governor Haruhiko Kuroda's last meeting, which was largely anticipated by most economists. Although this may remove a level of unpredictability for traders on Friday, the bank still faces the ongoing challenge of addressing bond-market dysfunction and managing the pressure on interest rates in the long term.

Weekly jobless claims in the US rose to 211.000, exceeding expectations of 195.000. This development has set the stage for the release of the monthly jobs report on Friday, with stronger-than-anticipated figures expected to support the likelihood of a larger hike at the upcoming March 21-22 Federal Reserve meeting. Analysts are projecting a 225.000 increase in February payrolls, about half the pace of January, but a number within that range would confirm that the US economy is continuing to add jobs at a robust rate. However, if the figure falls below expectations, this could dampen expectations of a half-point move in March and shift focus back towards a quarter-point hike.

The yield on 10-year Treasury notes decreased to 3.82%. The 2-10-year yield spread is at -96 bps. However, the 10Y real rate tightens to 139 bps today.

EURUSD
Fundamental Outlook: Economists surveyed by Reuters have recently revised their predictions for the peak of European Central Bank (ECB) interest rates, indicating that they will be much higher than what was anticipated a month ago. The economists also noted that persistently high inflation rates will likely prompt policymakers to take more aggressive measures. At the previous Governing Council meeting, a 50 basis-point lift was signaled for next week, and ECB President Christine Lagarde confirmed this on Sunday, stating that the increase is "very, very likely".

Technical Analysis: The pair has recently experienced an upward trend, as indicated by its position above the 200-day moving average. The current price has risen to meet the 8-day exponential moving average level, suggesting a potential continuation of the bullish momentum. However, traders should be aware of potential resistance at the 1.0600 level. If the pair manages to break above this level, the next key resistance level is at 1.0640, which has been a significant downtrend resistance in the past. On the downside, 1.0570 is an important support level that could potentially limit any further downward movement.

Support: 1.0570 - 1.0540 – 1.0485
Resistance: 1.0600 – 1.0640 – 1.0660

GBPUSD

Fundamental Outlook: The British pound hovered at 1.19, as investors sought refuge in the US dollar in response to Fed Chair Jerome Powell's hawkish statements. Powell stated to US lawmakers that the Fed may have to raise interest rates more than anticipated in order to tackle inflation. In other news, the Bank of England is anticipated to increase rates by an additional 25 basis points this month, marking the end of the current tightening cycle.

Technical Analysis: The pound has been in a recovery phase after a recent plunge and has managed to reclaim over 50% of the losses it suffered. Currently, it is attempting to surpass the 8-day exponential moving average level, which could signal a continuation of the bullish trend. However, traders should be aware of potential resistance at the 1.0975 level, which has been a significant barrier in the recent downtrend. On the downside, the 1.1905 level may provide support, which could potentially limit any further downward movement.

Support: 1.1905 – 1.1870 – 1.1825
Resistance: 1.1975 – 1.2015 – 1.2060

USDJPY

Fundamental Outlook: On Thursday, Japan's lower house of parliament granted approval for the government's selected candidates to assume the positions of central bank governor and deputy governors. This paves the way for a new leadership team that will be responsible for overseeing a gradual transition away from ultra-loose monetary policy.

Technical Analysis: The currency pair is currently experiencing an uptrend and is attempting to break above the 200-day moving average. It is currently trading close to both the EMA8 level and the support line of the uptrend. Traders should closely monitor daily closing prices to confirm a sustained break above this level. In case of a pullback, the 136.15 level can be viewed as a key support level, which may limit any further downward movement. Conversely, a break above the 137.25 level could indicate further upward momentum and act as a resistance level that traders should closely watch.

Support: 136.15 – 135.55 – 134.80
Resistance: 137.25 – 137.90 – 138.85

XAUUSD
Fundamental Outlook: Gold prices remained relatively stable on Friday as investors prepared for the release of nonfarm payroll data, which is expected to influence monetary policy decisions. However, gold prices are also expected to experience weekly losses, as the market anticipates higher interest rates.

Technical Analysis: Gold has experienced a recovery after a sharp decline, managing to regain 50% of the losses it incurred. Currently, it is attempting to maintain its position above the 8-day exponential moving average, which could signal a continuation of the bullish momentum. If successful, it may move towards the 1844 resistance level, which may act as a significant barrier. In the event of a retreat, the 1824-1819 zone could potentially provide support and limit further downward movement. Traders should monitor the price action closely to determine the next potential move for gold.

Support: 1824 – 1819 – 1804
Resistance: 1844 – 1855 – 1870

XAGUSD

Fundamental Outlook: Despite the expectation of weekly losses, silver prices received some relief on Thursday following the release of data showing higher-than-anticipated unemployment claims in the U.S. As a result, the dollar weakened from its recent highs, and Treasury yields also experienced a decline.

Technical Analysis: Silver has recently experienced a significant decline and is approaching the channel support of its downtrend. This level is a critical potential support level that traders will be closely monitoring for any potential reaction. The 19.80 level may act as an initial support level, but if the bearish momentum continues, the 19.65 level could come into play as an additional support level. On the other hand, the 20.40 level could potentially serve as a resistance level, limiting any further upward momentum. Traders should monitor the price action closely to determine the next potential move for silver.

Support: 19.80 – 19.65 – 19.10

Resistance: 20.40 – 20.70 – 21.20

UKOIL
Fundamental Outlook: On Friday, oil prices experienced another decline, with investors waiting for labor market data to gain insight into U.S. monetary policy. However, the market was also impacted by concerns over rising interest rates, as well as disappointing economic data from China. As a result, crude oil prices are set to experience significant losses for the week.

Technical Analysis: Brent crude oil has experienced a recent breakout from its previous downtrend, indicating a possible shift in the prevailing market sentiment. However, following a steep decline, the price has shown indications of returning to the downward channel. It is crucial for long-side traders to closely monitor whether the prices can maintain their position above this trend in the upcoming days. In terms of potential resistance levels, the 82.70 level presents a critical level for traders to watch for possible further upward momentum. Conversely, on the downside, the 80.20 level could be viewed as a support level that may prevent prices from declining further. Given the importance of these levels in influencing market behavior, traders must stay alert and attentive to identify any potential shifts in market dynamics.

Support: 80.20 – 79.50 – 78.10

Resistance: 82.70 – 83.95 – 86.10

 

[Z Forex]

"Market Update: US Index Futures Increase, Major Currencies Up, Precious Metals Rise, Asian Markets Rise, Oil Stable, and US Dollar Index Drops"

On Monday, the US dollar experienced a significant decline against a range of currencies as investors reevaluated their predictions for future interest rate increases by the Federal Reserve. This shift in sentiment follows mounting indications that the central bank may reconsider its previously hawkish stance, due to the impending banking crisis. In light of these developments, traders are now factoring in a greater likelihood of a 25-basis point rate hike by the Fed during its upcoming meeting, which marks a marked reversal from earlier expectations of a 50-basis points increase. The recent collapse of Silicon Valley Bank has underscored the growing economic vulnerabilities stemming from the steep rise in interest rates over the past year.

Over the weekend, the US Treasury and the Federal Reserve revealed emergency funding initiatives for the banking industry following the unexpected failure and regulatory takeover of SVB last week. Additionally, the White House has confirmed that it will guarantee the complete reimbursement of SVB depositors and that customers of the bank will be able to retrieve their deposits from Monday onwards.

As a result of the potential economic harm associated with additional rate hikes, financial markets are now casting doubt on the feasibility of further monetary tightening in the United States. Analysts at Goldman Sachs have indicated that they do not anticipate a rate hike by the Fed this month and are uncertain about the trajectory of monetary policy in light of the banking industry's recent strains.

eld on 10-year Treasury notes decreased to 3.68%. The 2-10-year yield spread is at -89 bps. However, the 10Y real rate tightens to 132 bps today.

EURUSD

Fundamental Outlook: Despite the potential risks to financial stability, it is widely anticipated that the European Central Bank (ECB) will implement a 50 basis point hike later this week. However, the ECB will likely have to acknowledge these risks, which may result in a more cautious or dovish approach to the rate increase.

Technical Analysis: The currency pair has been exhibiting bullish momentum as it found support at the 200-day exponential moving average, which resulted in a surge above the 1.0700 level. This uptrend has continued for three consecutive days, indicating a strong bullish sentiment. The pair is attempting to break above the 50-day moving average, which could signal a further bullish trend.

In terms of resistance, the key level to watch is at 1.0755. If the pair manages to break above this level, it could signal a further bullish momentum, potentially pushing the price higher. On the downside, the support level is seen at 1.0680. If the price falls below this level, it could indicate a bearish sentiment, with the potential for further price declines. Traders should monitor these key levels closely to determine the direction of the trend and potential entry or exit points.
Support: 1.0680 - 1.0630 – 1.0580
Resistance: 1.0755 – 1.0780 – 1.0835

GBPUSD
Fundamental Outlook: The Bank of England (BoE) has put a stop to the operations of SVB UK, as the bank's presence in the UK is limited, and it does not perform any crucial functions that support the country's financial system.

Technical Analysis: The Pound appears to be exhibiting a bullish reversal as it broke above its previous downtrend. The price has climbed for four consecutive bars, with each bar closing higher than the previous one. Currently, the price faces resistance at the 50-day moving average, hindering further price increases.

Traders should closely monitor the price as it approaches the 50-day moving average to determine whether the bullish momentum is strong enough to break through this resistance level. On the downside, a key support level can be seen at 1.2160, which could potentially limit further price declines. Traders should consider this support level when setting stop-loss orders and assessing potential risk levels. Overall, the current trend of the GBP is bullish, but traders should remain cautious and monitor key levels closely to determine potential entry and exit points.

Support: 1.1905 – 1.1870 – 1.1825
Resistance: 1.1975 – 1.2015 – 1.2060

USDJPY
Fundamental Outlook: The Japanese yen has strengthened. This upswing is attributed to the collapse of Silicon Valley Bank, which compelled US regulators to safeguard depositors and financial institutions. This, in turn, has led to market speculation that the US Federal Reserve may choose a more cautious approach to policy tightening in order to avoid exacerbating risks to the financial system. Meanwhile, domestically, the Bank of Japan, under Governor Haruhiko Kuroda's leadership, held its policy of ultra-low interest rates steady at its March meeting.

Technical Analysis: According to technical analysis, the Japanese yen has experienced a downtrend, breaking below its previous uptrend. This is supported by the fact that it is currently trading below its 8-day exponential moving average. The price level of 135.05 may act as resistance towards any potential upside movement. Meanwhile, a support level of 133.10 may be monitored below as potential downside protection.

Support: 133.10 – 132.50 – 131.55
Resistance: 135.05 – 135.70 – 136.70

XAUUSD
Fundamental Outlook: On Monday, the price of gold soared to a one-month high, rebounding significantly from its recent downturn. This surge is attributed to market speculation that a mounting banking crisis in the US will compel the Federal Reserve to temper its previously hawkish stance in the near future.

Technical Analysis: The price of gold has been increasing for the past three consecutive days. Additionally, it is currently trading above significant moving averages, indicating a positive trend. The relative strength index (RSI) has approached the 60 levels, which, if broken, may further increase the momentum towards the upside. A support level can be observed at 1870, the 50-day moving average level. Conversely, a resistance level at the 1890-1900 region should be monitored as potential upside resistance.

Support: 1870 – 1855 – 1846

Resistance: 1890 – 1900 – 1918

XAGUSD
Fundamental Outlook: According to Fed Fund futures prices, the majority of traders are now forecasting a 25-basis point increase by the Federal Reserve during its upcoming meeting, as opposed to the previously anticipated 50 bps hike. This expectation shift has positively impacted silver prices, as the possibility of less drastic interest rate increases in the near future emerges.
Technical Analysis: Silver has regained a considerable portion of its losses at the beginning of the week following a sharp decline last week. However, it currently faces a resistance level at 20.95, which corresponds to the 50-day moving average. Conversely, a support level can be seen at 20.60, which is the 8-day exponential moving average.

Support: 20.60 – 20.40 – 20.00
Resistance: 20.95 – 21.20 – 21.50

UKOIL
Fundamental Outlook: In late morning Asian trade on Monday, oil prices experienced an uptick after initially starting weak, as a stronger demand for oil in China and a weaker US dollar provided much-needed support to a market shaken by the possibility of further interest rate hikes in the US.



Technical Analysis: Brent oil is experiencing a slight recovery, supported by an uptrend. The 8.21 and 50-day moving averages are acting as resistance levels for the oil, and they are located close to each other. If these levels are broken, it may increase the upward momentum of the oil. The price level of 84.00 may be monitored as resistance, whereas 82.30 can be viewed as support.

Support: 82.30 – 81.90 – 81.30

Resistance: 84.00 – 84.50 – 86.10

 

[Z Forex]

"Market Update: US Index Futures Slightly Up, Major Currencies Decrease, Precious Metals Mixed, Asian Markets Drop, Oil Down, and US Dollar Index Rises"

On Tuesday, Asian markets experienced a significant drop as investors quickly reduced their investments in bank stocks. This was due to the growing concerns about the potential spread of a crisis in the United States. Additionally, there was uncertainty about monetary policy, which added further weight to the market. These worries come ahead of the release of important U.S. inflation data.

The fallout from the failure of Silicon Valley Bank had a significant impact on global bank stocks on Tuesday. Despite reassurances from President Joe Biden and other policymakers, market concerns about the potential spread of the crisis persisted. This led to a reconsideration of the outlook for interest rates. President Biden attempted to calm the situation by asserting that his administration's actions should instill confidence in the American banking system. He also pledged to impose stricter regulations on the industry.

In the aftermath of the collapse of Silicon Valley Bank (SIVB), market participants will be paying close attention to the February inflation report, which had been deemed the most critical data point for the Federal Reserve's future policy decisions. According to Bloomberg data, on a "core" basis, which removes the more volatile food and gas prices, prices are expected to have risen by 0.4% in February from the prior month and by 5.5% over the previous year.

The yield on 10-year Treasury notes decreased to 3.53%. The 2-10-year yield spread is at -47 bps. However, the 10Y real rate tightens to 114 bps today.

EURUSD
Fundamental Outlook: The European Central Bank is expected to announce another interest rate hike on Thursday, but the recent turmoil in global bank stocks has made the outlook less certain. In February, there was an unexpected increase in underlying inflation, which caused policymakers to worry that inflationary pressures might persist. However, the uncertainty in the U.S. banking sector has created concerns about potential contagion in Europe. As a result, confidence in a significant 50 basis point interest rate hike has diminished.

Technical Analysis: After three consecutive days of strong uptrend, the pair faced a barrier at 1.0750 and pulled back. However, the formation of a double bottom pattern suggests a target of 1.0800. To achieve this, the pair needs to break through the 1.0750 resistance level first. The current pullback may continue until the double bottom resistance is broken, where a retest is possible. If the decline persists, the support level to watch is at 1.0650.

Support: 1.0650 - 1.0600 – 1.0525 Resistance: 1.0750 – 1.0780 – 1.0835

GBPUSD

 

[Z Forex]

"Market Update: US Index Futures Slightly Up, Major Currencies Decrease, Precious Metals Down, Asian Markets Steady, Oil Up, and US Dollar Index Rises"


On Wednesday, a majority of Asian currencies remained steady or slightly decreased in value, following the release of data that revealed an uneven recovery in the Chinese economy. Meanwhile, the US dollar remained at a nearly one-month low after consumer inflation rates decreased as anticipated.

The Bureau of Labor Statistics reported that the consumer price index in the US increased by 0.4% in February, marking a slower pace of growth than the 0.5% rise in January. As a result, the annual rate of inflation decreased from 6.4% to 6.0%, indicating a lower overall increase in the cost of goods and services over the past year. This marks a one-third reduction from the inflation rate's peak of over 9% in June of last year.

According to CME's FedWatch tool, financial markets have priced in a 74.5% probability that the US Federal Reserve will increase the Fed funds target rate by 25 basis points at the conclusion of its upcoming two-day monetary meeting later this month. However, a growing minority of 25.5% believe that there may be no rate hike at all. These probabilities reflect the market's expectations for the central bank's monetary policy decisions, and they can be subject to changes based on economic developments and other factors leading up to the meeting.
The yield on 10-year Treasury notes increased to 3.68%. The 2-10-year yield spread is at -47 bps. However, the 10Y real rate widens to 136 bps today.

EURUSD

Fundamental Outlook: According to the chief economist of the European Bank for Reconstruction and Development, Beata Javorcik, market predictions of interest rate cuts in central Europe are overly optimistic due to the possibility of inflation remaining higher than expected. Despite the slowdown of the region, caused by the fallout from the conflict in Ukraine, rate-setters in central Europe, who led the global monetary tightening trend in 2021, are currently focused on maintaining stable rate policies.

Technical Analysis: After four consecutive days of strong uptrend, the pair faced a barrier at 1.0760 and pulled back. The parity is trading above the 50- day exponential moving averages currently and it is important to stay above that level for further increases. However, the formation of a double bottom pattern suggests a target of 1.0800. To achieve this, the pair needs to break through the 1.0760 resistance level first. The current pullback may continue until the double bottom resistance is broken, where a retest is possible. If the decline persists, the support level to watch is at 1.0650.
Support: 1.0650 - 1.0600 – 1.0525
Resistance: 1.0760 – 1.0780 – 1.0835

GBPUSD

Fundamental Outlook: According to a survey released on Wednesday, employers in the UK agreed to pay rises averaging 5.0% during the period from November 2021 to January 2022. This figure is significantly higher than historic averages, and it is expected that high pay settlements will continue due to the tight labour market in the country.

Technical Analysis: The pound has experienced a recent bullish run but is currently showing a flat trend. Despite this, the currency has settled above both the 200 and 50-day moving averages, indicating potential bullish momentum. However, there is a possibility that the pound may face resistance at the 1.2205 level.

In the event of a decline, the 1.2135 level could potentially serve as a support level for the pound. It is important to monitor the price action closely to determine whether the pound will maintain its position above the moving averages and potentially break through resistance, or if it will decline and encounter support at the identified level. Overall, the technical analysis suggests a neutral to bullish outlook for the pound.
Support: 1.2135 – 1.2060 – 1.1950
resistance: 1.2205 – 1.2260 – 1.2325

USDJPY
Fundamental Outlook: Haruhiko Kuroda, the current Governor of the Bank of Japan (BOJ), who is set to retire in April, has recently stated that his ten-year monetary experiment was only "half successful." The experiment aimed to tackle deflationary pressures by introducing large-scale asset purchases, in an attempt to shift the public's mindset. However, Kuroda acknowledges that the experiment only achieved partial success in its intended goals.

Technical Analysis: The currency pair has entered a recent downtrend, but it has been able to maintain a position above the 0.236 Fibonacci level. Additionally, it experienced a spike above the 50-day moving average level recently. In terms of resistance levels, the key one to monitor is at 135, which aligns with the 8-day exponential moving average.

On the downside, if the currency pair continues to decline, the 133.10 Fibonacci level may serve as a potential support level. It is important to observe the price action closely to determine whether the pair will maintain its position above the Fibonacci level and potentially break through resistance at 135, or if it will decline further and encounter support at the identified level. Overall, the technical analysis suggests a cautious outlook for the currency pair, as it has entered a downtrend but has been able to maintain a position above key levels.
Support: 133.10 – 132.50 – 131.55
Resistance: 135.00 – 135.45 – 136.70

XAUUSD
Fundamental Outlook: On Wednesday, the price of gold decreased slightly after dropping from a six-week high in the previous session. A mixed reading on U.S. inflation raised uncertainty about the Federal Reserve's stance on monetary policy, leading to fluctuations in the gold market. Furthermore, concerns over a banking crisis in the US continued to persist, further impacting the market sentiment.

Technical Analysis: Gold has experienced an uncommon bullish momentum recently, with a significant increase in value of around $100 over the past four days. This upward trend may be followed by corrective movements. As gold moves further away from resistances, it may encounter potential support levels at 1895 and 1883.

However, if gold continues to rise, the first resistance level to monitor is at 1915. If the metal is able to break through this resistance level, it may advance towards the 1940 level, which coincides with a prior ascending trendline. It is important to closely observe the price action to determine whether the current bullish momentum will continue, or if there will be a correction. Overall, the technical analysis suggests a bullish outlook for gold in the short term, but caution should be exercised as corrections may follow.
Support: 1895 – 1883 – 1870

Resistance: 1915 – 1927 – 1940

 

[Z Forex]

"Market Update: US Index Futures Stable, Major Currencies Increase, Precious Metals Down, Asian Markets Down, Oil Negative, and US Dollar Index Drops"
Credit Suisse, a Swiss bank, saw its shares plummet by as much as 30% on Wednesday. In response, Swiss regulators, including the financial regulator FINMA and the central bank, announced an unprecedented move to provide liquidity support to the bank. In a joint statement, they aimed to reassure investors that Credit Suisse met the requirements for capital and liquidity set for important banks and that it could access liquidity from the central bank if necessary.

On Thursday, Credit Suisse revealed its plans to borrow up to $54 billion from the Swiss central bank to improve liquidity conditions and assuage investor concerns, particularly after a decline in its shares raised worries about a broader banking crisis. The announcement had a stabilizing effect on financial markets in Asia, which had experienced significant selling after previous sessions in Europe and the United States sparked fears of possible run-on global bank deposits.

The yield on 10-year Treasury notes decreased to 3.51%. The 2-10-year yield spread is at -43 bps. However, the 10Y real rate tightens to 121 bps today.


EURUSD
Fundamental Outlook: The European Central Bank (ECB) policymakers are scheduled to hold a meeting on Thursday. However, given the turmoil in the financial markets, the ECB might need to deviate from its plans to execute another significant interest rate hike, despite persistently high inflation. On Thursday, Barclays stated that it is more probable for the European Central Bank (ECB) to increase interest rates by 25 basis points, rather than 50 basis points or not at all when it meets on Thursday.

Technical Analysis: In the technical analysis today, the focus is on the European central bank's interest rate decision and its impact on the currency pair. Volatility is expected to remain high, with the euro showing a relatively calm trend ahead of the announcement.

Yesterday's sharp fall has left the euro struggling to surpass the 50-day moving average over the past three days, indicating strong resistance in this area. Unless the currency can close above the 1.0725 level, any upward movements may be limited. It is, however, positive that the euro has not fallen below the 200-day exponential moving average, which can be seen as a potential support level.

Overall, the technical analysis suggests that the current resistance zone will be a key factor in determining the currency's direction in the short term, with traders closely monitoring the support level at 1.0550.
Support: 1.0550 - 1.0515 – 1.0440
Resistance: 1.0640 – 1.0690 – 1.0725

GBPUSD

Fundamental Outlook: During his Spring Budget presentation on Wednesday, Finance Minister Jeremy Hunt provided more positive projections for the British economy, indicating that the outlook was less bleak than previously anticipated. Following Finance Minister Jeremy Hunt's statement, the money markets' expectations shifted towards the Bank of England (BoE) refraining from implementing another interest rate hike during its March meeting. The probability of the BoE maintaining the interest rate unchanged was estimated at 58%. In comparison, the expectation of a rate pause by the BoE was only around 10% the previous week.

Technical Analysis: In the technical analysis of the pound, the 8-day exponential moving average is providing support, and it is crucial that the currency does not drop below this level. The 1.2045 level can also be considered as a potential support level.

On the upside, the 1.2125 level presents strong resistance due to the convergence of both the 200-day and 50-day averages at this level. Therefore, any upward movements will face significant resistance at this level.

Overall, traders should monitor the pound's movement relative to the 8-day exponential moving average, as well as the 1.2045 and 1.2125 levels, as they are likely to be key indicators of the currency's short-term direction.

Support: 1.2045 – 1.2015 – 1.1930
Resistance: 1.2125 – 1.2210 – 1.2270

USDJPY
Fundamental Outlook: The minutes from the Bank of Japan's January meeting revealed that its members emphasized the necessity of continuing with ultra-easy monetary policies. They also reiterated that it would require an extended period to reach the 2% inflation target in a stable and sustainable way. In Governor Haruhiko Kuroda's final policy meeting before his retirement, the BOJ maintained its policy of ultra-low interest rates.

Technical Analysis: Based on the technical analysis, the currency pair experienced a downtrend and breached its uptrend, causing it to drop to the 50-day moving average (depicted in purple). However, it managed to receive support from this level twice, indicating a robust support level. In the event that this level is breached, there may be an increase in selling pressure. Traders should closely monitor the 132.40 level. Conversely, the 135.05 level can be regarded as resistance on the upper side. Buyers could drive the price upwards, potentially surpassing the 8-day exponential moving average.
Support: 132.40 – 131.25 – 129.95
Resistance: 135.05 – 135.80 – 136.70

XAUUSD

 

[Z Forex]

"Market Update: US Index Futures Up, Major Currencies Increase, Precious Metals Rise, Asian Markets Positive, Oil Moving Higher, and US Dollar Index Downs"

On Friday, the majority of Asian currencies experienced a significant increase, as concerns about a worldwide banking crisis appeared to subside. Meanwhile, the US dollar declined, as investors anticipated that the Federal Reserve would adopt a less aggressive approach to avoid exacerbating the economic hardship being experienced.

Treasury Secretary Yellen reassured lawmakers that the U.S. banking system remains "sound" despite the recent failures of three banks and the need for an industry-wide capital injection into First Republic (FRC) to avoid a fourth failure. Yellen stated that it was important to ensure the safety of depositors and the banks they entrust their money with, as a failure could lead to contagion and seriously impact the financial system.

The US stock market experienced a surge following the announcement that a group of 11 major US banks had joined forces to provide $30 billion in capital to First Republic (FRC), which had been struggling. This was a part of the sector's efforts to prevent a more widespread financial crisis in light of multiple bank failures since the previous Wednesday.

The yield on 10-year Treasury notes increased to 3.55%. The 2-10-year yield spread is at -43 bps. However, the 10Y real rate widens to 124 bps today.

EURUSD
Fundamental Outlook: Goldman Sachs has recently commented that despite the current volatility in financial markets, the European Central Bank (ECB) will continue its tightening mode. However, the bank has revised its expectation for the peak of the ECB policy rate, lowering it from 3.75% to 3.50%. Goldman Sachs also predicts that core inflation in Europe will remain high in the near future and expects annual inflation to reach 5.8% in March.

Technical Analysis: The currency pair has been trading within a horizontal channel, with the 50-day moving average acting as a strong resistance and the 200-day exponential moving average providing reliable support. Recently, the pair has bounced off the support level of the channel for the third time, indicating a bullish sentiment in the market. Currently, the pair is attempting to break through the 8-day exponential moving average. Traders should keep an eye on the 1.0680 level, which is a critical resistance level in the short term. If the pair manages to close above 1.0725, it may attract further buying interest from traders.
Support: 1.0610 - 1.0575 – 1.0540
Resistance: 1.0680 – 1.0695 – 1.0725

GBPUSD

Fundamental Outlook: Investors who hold the Pound currency were evaluating how the ongoing instability in the banking systems of Europe and the United States, as well as persistently high inflation, might affect future monetary policy decisions. The Bank of England is anticipated to raise interest rates by 25 basis points next week, but then conclude its current tightening cycle. In contrast, the US Federal Reserve is likely to keep raising rates in response to inflation, albeit at a more gradual pace.

Technical Analysis: When analyzing the daily chart for the Pound, we can observe that the 8-day exponential moving average is currently providing support to the price, and the price is attempting to break above the 50-day moving average. However, there is a significant resistance level at 1.2180-1.2210, which could limit further upward momentum. If the price manages to surpass this resistance level, we may see an acceleration in the price increase. On the other hand, if the price fails to break above the resistance level, we could see a reversal in the trend. In terms of support, the 1.2125 level could be considered a key support level.

Support: 1.2125 – 1.2080 – 1.2030
Resistance: 1.2180 – 1.2210 – 1.2270

USDJPY

Fundamental Outlook: According to a Reuters poll of 20 economists, Japan's core consumer inflation probably decreased considerably in February compared to the previous month's 41-year high. The decrease is attributed to government subsidies for gas and electricity bills that help offset the increase in living expenses. The core consumer price index, which excludes fresh food but includes oil products, is expected to have risen by 3.1% year-on-year in February.

Technical Analysis: After analyzing the technical indicators, it appears that the currency pair had been in a downtrend and broke below its previous uptrend line, causing a decline to the 50-day moving average (shown in purple). However, the pair found strong support at this level on two separate occasions, indicating a reliable support level. If the pair fails to hold this support level, we may see an increase in selling pressure. It is recommended that traders pay close attention to the 132.40 level for potential changes in the trend. On the other hand, the 135.05 level may act as a resistance level on the upper side, and if the price manages to break above it, buyers could drive the price higher, potentially pushing past the 8-day exponential moving average.

Support: 132.40 – 131.25 – 129.95

Resistance: 135.05 – 135.80 – 136.70

XAUUSD

Fundamental Outlook: In early trading on Friday, the price of gold moved higher. It was on track to record its strongest week in two months. The increase in safe-haven demand was due to concerns about a possible banking crisis.

Technical Analysis: Gold has been experiencing a steady upward trend, and it is on the verge of recovering the $150 loss it experienced in February during the first half of March. However, managing risk in such a steep and persistent uptrend can be challenging. A resistance level was formed in 1938, which is now corresponding to the 1942 level. If the price manages to break through this resistance level, it could potentially rise to the highest level of 1960 that was observed last year. On the downside, the 1919 level could be viewed as a critical support level, and traders should keep a close eye on it for any potential changes in trend.

Support: 1919 – 1901 – 1877

Resistance: 1942 – 1950 – 1960

XAGUSD

 

[Z Forex]

"Market Update: US Index Futures Negative, Major Currencies Flat, Precious Metals Mixed, Asian Markets Sink, Oil Decreases, and US Dollar Index Stable"


On Monday, Asian markets experienced a decline. Despite the implementation of emergency measures to increase available funds and bank consolidations in the United States and Europe, concerns about a possible banking crisis persisted. Investors are now waiting for further indications on monetary policy from the upcoming Federal Reserve meeting.

The People's Bank of China (PBOC) has maintained its record-low loan prime rates, indicating an effort to ease liquidity conditions and bolster the country's economic expansion.
Several major central banks worldwide coordinated efforts to prevent a banking crisis from spreading. The Swiss authorities brokered a deal for UBS Group AG to acquire Credit Suisse Group AG for 3 billion Swiss francs ($3.23 billion) and assume up to $5.4 billion in losses. The deal is supported by a significant Swiss guarantee and is expected to close by the end of 2023.

Following the announcement, the US Federal Reserve, the European Central Bank, and other major central banks issued statements to reassure the markets, which have been negatively impacted by the ongoing banking crisis. The crisis started with the collapse of two regional US banks earlier this month.

EURUSD

Fundamental Outlook: Two senior executives involved in the discussions have informed Reuters that at least two major banks in Europe are assessing the possibility of contagion within the banking sector of the region. These banks are seeking stronger indications of support from both the Federal Reserve and the European Central Bank to help deal with any potential fallout.

Technical Analysis: The currency pair has been consolidating within a range-bound market, where the 50-day moving average has acted as a significant barrier, while the 200-day exponential moving average has acted as a reliable support. The pair has recently rebounded off the channel's support level for the third time, indicating a bullish market sentiment. Currently, the pair is attempting to test the 8-day exponential moving average, which may provide short-term resistance. Forex traders should monitor the 1.0685 level closely, as it is a crucial resistance level in the near term. If the pair manages to close above the 1.0725 level, it may attract further buying interest from traders. Conversely, if the pair falls below the 1.0610 support level, it may signal further weakness in the market.
Support: 1.0610 - 1.0575 – 1.0540 Resistance: 1.0685 – 1.0710 – 1.0725

GBPUSD
Fundamental Outlook: On Sunday, the Bank of England expressed support for the proposed acquisition of Credit Suisse by UBS, which was brokered by Swiss authorities. The Bank also stated that it would endorse the approval of the deal, and reassured that the British banking system is adequately funded.

Technical Analysis: After analyzing the daily chart for the Pound, it appears that the current price is being supported by the 8-day exponential moving average. Moreover, the price is attempting to maintain its position above the 50-day moving average. However, there is a strong resistance level ranging between 1.2195-1.2210, which may restrict further upward movement in the price. Breaking through this resistance level could result in a surge of price acceleration. In the event of a failure to break through this level, there is potential for a trend reversal. As for support levels, traders should keep a close eye on the 1.2125 level, which is considered a critical support level.

USDJPY
Fundamental Outlook: On Monday, a high-ranking official in Japan's government made a statement indicating that the country's banking system is secure and not vulnerable to the negative effects of issues currently affecting the banking sectors of the United States and Europe. The official's intention was to calm any concerns in the markets about a possible spread of problems to Japan.

Technical Analysis: Based on technical analysis, the currency pair has been experiencing a downtrend and recently broke below its previous uptrend line, resulting in a drop below the 50-day moving average (indicated by the purple line). If the price fails to hold this support level, we may witness an increase in selling pressure. As such, traders should closely monitor the 130.55 level for a possible sell-off. Conversely, the 132.60 level may serve as a resistance level on the upside. If the price manages to break above this level, it could attract buyers, potentially pushing the price higher and exceeding the 8-day exponential moving average.

Support: 130.55 – 129.85 – 128.35
Resistance: 132.60 – 133.10 – 134.00

XAUUSD

Fundamental Outlook: On Monday, gold prices were slightly positive, as investors assessed the effects of the Federal Reserve's and other major central banks' emergency liquidity measures in response to mounting concerns over a potential banking crisis.

Technical Analysis: Gold has been on a sharp upward trend, influenced by the banking crisis, with strong bullish candles breaking through key resistance levels. If the current momentum persists and the psychological resistance level of 2000 is surpassed, it could rapidly climb to the 2010 level. The channel's peak aligns with the 2050 level, indicating a possible further rise. In terms of support levels, 2000 and 1980 may provide a cushion for the price on the downside.
Support: 1980 – 1968 – 1954
Resistance: 2000 – 2010 – 2040

XAGUSD
Fundamental Outlook: The recent turmoil in the banking industry, which could potentially have negative impacts on the broader economy, has led to a surge in demand for safe-haven assets like silver in the past few weeks.



Technical Analysis: Silver's uptrend remains unbroken, and there is a crucial resistance level at 22.80. Additionally, a pennant formation is visible on the chart, which could signal a potential breakout in the upward direction. If the resistance level at 22.80 is surpassed, it may pave the way for further price increases towards the 23.00 level. On the downside, the 22.30 level, represented by the 50-day simple moving average, is a crucial support level, and traders should closely monitor it for any possible trend reversals.

Support: 22.30 – 22.02 – 21.80
Resistance: 22.80 – 23.00 – 23.22

UKOIL
Fundamental Outlook: On Monday, the prices of oil dropped after initially increasing, as worries about a decline in demand this year and the anticipation of the Federal Reserve meeting overshadowed efforts by major central banks to alleviate concerns of a potential banking crisis in the market.



Technical Analysis: Brent oil is still experiencing a decline, with the price falling below the ascending channel's downtrend. At present, the 70.05 level can be seen as a support level for the price, which has fallen to 70.85. Unless the price crosses up the 8-day exponential moving average, selling pressure is likely to continue. The 72.00 level is a significant resistance level in the near term, which traders should keep an eye on.

Support: 70.05 – 67.60 – 65.80
Resistance: 72.00 – 73.70 – 75.40