InvestMacro

By Orbex

Following Fed Chair Jerome Powell’s speech last week, equities started off on a positive note.

There is a wide consensus that central banks across the world will be cutting rates. This is because of the global economy being hit hard due to the Coronavirus.

In the US, investors are already pricing in a prospect of a rate cut at the March FOMC meeting.

Eurozone Manufacturing Sector Contracts

The final manufacturing activity figures from IHS Markit shows a modest contraction in the sector. The final manufacturing PMI rose to 49.2 in February, up from 47.9 in January. This was a slight increase from the flash PMI numbers which signaled a reading of 49.1

EURUSD Pops Higher to a 1-Month High

The common currency surged higher on Monday, gaining over 1% on the day. Price action is testing the resistance level of 1.1193 – 1.1170. We anticipate a possible reversal at this level. This will keep prices consolidated within this resistance area and the 1.1100 level of support in the near.

UK Manufacturing Sector Maintains Expansion

The manufacturing sector in the UK saw the fastest expansion in ten months in February. The gains came on the back of continued recovery amid reduced political uncertainty.

IHS Markit’s manufacturing PMI for the UK rose from 50.0 in January to 51.7 in February.

GBPUSD Consolidates Below Support

The currency pair is trading rather flat in the medium term. Price action fell below the support area of 1.2858 level. A brief intraday decline, however, is pushing the currency back to the support.

However, this retracement will see a possible retest of 1.2858 level as resistance. There is also the bullish divergence that is building up which could see the near term upside prevailing.

ISM Manufacturing Retreats in February

Manufacturing activity in the US slowed in February. The report from ISM shows that manufacturing activity fell to 50.1, missing estimates of 50.5. This was down from 50.9 in January.

However, the index remains above the 50-level, suggesting expansion in the sector. The slowdown in activity coincides with the virus outbreak which has slowed business globally.

XAUUSD Retraces Declines

Gold prices are retracing the losses from last Friday. Price action quickly bounced back after testing the support area near the 1572 – 1569 level. Following this bounce, price action has moved higher. The current pullback to the 1594 level could see a possible continuation to the upside. The next main resistance is at 1631 level.

By Orbex

By George Prior

Global investors are taking advantage of buying opportunities ahead of policymakers looking to take more coordinated action on propping up economies due to the negative impact of the ongoing coronavirus outbreak.

This is the message from Nigel Green, the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory organizations, as G-7 finance ministers and central bank officials are due to hold a teleconference to discuss the issue on Tuesday.

U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell will lead a conference call taking place before Wall Street opens. Bank of Japan Governor Haruhiko Kuroda and European Central Bank President Christine Lagarde are also on the call, amongst others.

Mr Green notes: “For many, the joint statement will not go far enough, and there will be doubts about the effectiveness. This disappointment will dampen the market reaction somewhat.

“However, in general, the markets are looking for a reason to return to being bullish – which has been their default position for an unusually long time.

“This teleconference between G-7 finance ministers and central bankers will likely provide some of the reassurance they seek.”

He continues: “Many investors will be seeking to buy ahead of any potential measures aimed at cushioning the coronavirus blow kicking in, in order to take advantage of the current lower entry points and, therefore, the opportunities, while reducing risk at the same time.”

Last week, the deVere CEO said: “Until such time as governments pump liquidity into the markets, markets will be jittery triggering sell-offs.”

Mr Green affirms: “It was billed as ‘the worst global market sell-off since the 2008 crash’ but it then became an important buying-opportunity for many investors.

“Now, with a more coordinated international response in the pipeline, many investors can be expected to jump off the sidelines again.”

Previously, he noted: “In the current volatile environment, investors – including myself – will be revising their portfolios and drip-feeding new money into the market.”

The deVere CEO concludes: “Central banks and finance ministers of the G7 discussing an action plan to take on the far-reaching impact of coronavirus will buoy investors.

“Many will be seeking to increase their exposure to the markets ahead of the implementation of any measures that are rolled out as a result of this conversation.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Article By RoboForex.com

XAUUSD, “Gold vs US Dollar”

As we can see in the H4 chart, Gold has completed the correction; right now, it is resuming the ascending tendency continues and has already reached several reversal patterns, including Harami. The current situation implies that XAUUSD may reverse and get back into the rising channel. In this case, the upside target may be at 1655.00. However, one shouldn’t ignore another scenario, according to which the instrument may return to 1573.00.

NZDUSD, “New Zealand vs. US Dollar”

As we can see in the H4 chart, the descending channel continues. After completing a Hammer reversal pattern close to the support level, NZDUSD is reversing. We may assume that after reversing the price may correct towards the channel’s upside border, and then resume falling. In this case, the downside target may be at 0.6200. At the same time, one shouldn’t exclude an opposite scenario, according to which the instrument may grow to return to 0.6325.

GBPUSD, “Great Britain Pound vs US Dollar”

As we can see in the H4 chart, the descending tendency continues. By now, GBPUSD has formed several reversal patterns, such as Hammer, close to the support level. Possibly, the pair may reverse and start a new correction towards 1.2900. Later, the market may continue falling to reach the support level. However, there is another scenario, which implies that the instrument may fall to reach 1.2743 without forming any significant corrections.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By Orbex

Dollar Falls Further

The US dollar is undergoing a dramatic depreciation. The USD index is now down for seven consecutive days, falling from highs of 99.80 to lows of 97.20s as of writing. The sell-off has been intensified late last week. This came in response to comments from Fed Chairman. Powell pointed to the potential for a return to easing this year in a bid to help buffer the economy against the damage from the ongoing coronavirus outbreak.

In an unscheduled statement released last week, Powell reassured the market that the Fed:

“will use our tools and act as appropriate to support the economy”.

The statement was released against a backdrop of further, heavy losses in equities/commodities markets and the US dollar alike.

Fed is Monitoring Developments

While Powell was keen to highlight that “the fundamentals of the US economy remain strong”, the Fed chairman went on to say:

“However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook.”

The statement took the market by surprise, as did the Fed chairman’s notably dovish guidance. Earlier that day, Fed’s Bullard had said that he didn’t feel the Fed would need to cut rates in response to the outbreak. However, on the back of Powell’s statement, the market is now fully pricing in a cut at the upcoming March meeting. Pricing also suggesting further cuts this year.

Markets Helped By Stimulus Expectations

Equities markets have started to recover. This came following Powell’s statement as the prospect of fresh stimulus helped the SPX500 bounce off initial lows on the week. The spread of the virus continues to intensify around the world and health authorities have warned that a vaccine could still be months away. The mood is still very much once of concern and uncertainty.

Technical Perspective

The severity of the sell-off in the SPX500 over the last week is clear to see. Price has broken down through several key support level to trade lows of 2855.04 before recovering. Price is now trading back up to challenge the 3025.25 level. This is an important area as it also holds the completion of the symmetry move with the last push into highs before we saw the sell-off last week. Above here, the next level to watch is the 3087.49 level ahead of the retest of the broken bullish trend line.

By Orbex

By Orbex

USD Falls On Manufacturing Miss & Fed Talk

The US dollar has been trading in the red once again over the morning session on Tuesday and, in light of the heavy sell-off in USD over the last two weeks, the near-term outlook remains heavy. Yesterday, the US ISM Manufacturing reading fell back to 50.1 from 50.9 previous, below the expected 50.5 level. Following on from a statement released last week by Chairman Powell, the market now expects the Fed to ease this month, which should keep USD weighted to the downside. USD index trades 97.56 last.

Euro Lower On USD Strength

EURUSD continues to trade in the green today. EUR has been much firmer over the last week, benefiting from USD weakness though sentiment towards the Eurozone remains bearish in the bigger picture in light of recent data softness and ongoing coronavirus fears. EURUSD trades 1.1109 last, softening a little from the recent highs.

GBP Lower on Data Revision

GBPUSD has been a little weaker today also with price sitting right back down on the 1.2770 support level as today’s strength in USD weighs. Yesterday, the UK manufacturing reading for February was revised down from the prior 51.9 to 51.7 though it was at least able to remain in expansionary territory for the month.

Risk Appetite Recover on Stimulus Hopes

Risk assets have continued to trade higher on Tuesday with traders buoyed by recent statements from the Fed and the BOJ which both signaled a readiness to ease in order to combat the coronavirus’ impact on the economy. Traders now expect the Fed to ease by 0.25% this month with some players looking for a larger .50% cut. The SPX500 trades 3089.00 last, having rallied strongly off last week’s 2855.04 lows.

Safe Havens Stall For Now

Safe havens have had a more muted week so far. Given the recovery in equities prices, both JPY and gold have been a little lower against USD. However, given the very volatile backdrop with the ongoing coronavirus outbreak, there is plenty of upside risks for safe havens. USDJPY trades 107.98 last, up off lows below 107.50 last week. XAUUSD trades 1595.95 last as price continues to grind lower.

Crude Rallying Ahead of OPEC

Oil prices are fighting to recover this week amidst the rebound in broader risk appetite. A surge in central bank easing expectations is helping lift risk assets across the board, despite the ongoing coronavirus risks. Crude prices have recovered to 48.39 last from lows of 43.60 yesterday. Traders are also expecting that OPEC will announce fresh measures when it meets this week, also helping to lift oil prices.

Loonie Holds Above Support

USDCAD has been lower today in light of the recovery in crude prices which is helping lift CAD. For now, though, price remains above the 1.3345 support, keeping focus on further upside. Back below there, however, and focus will turn to the 1.33 support zone next.

Aussie Testing Resistance Despite RBA Rate Cut

AUDUSD has been a little higher today with price benefiting from the rebound in risk assets. Indeed, the recovery in AUD comes despite Chinese manufacturing data yesterday marking record lows over the prior month, reflecting the damage to the economy from the coronavirus outbreak. AUDUSD trades .6559 last, capped by the .6565 level for now. The rally comes despite the RBA cutting rates overnight by 0.25% to new record lows of 0.5% in a bid to buffer the economy against the coronavirus impact.

By Orbex

Article By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is trading at 0.6544; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the resistance area at 0.6565 and then resume moving downwards to reach 0.6365. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6655. In this case, the pair may continue growing towards 0.6725.

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is trading at 1.2779; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 1.2795 and then resume moving downwards to reach 1.2605. Another signal to confirm further descending movement is the price’s rebounding from the upside border of a Triangle pattern. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 1.2865. In this case, the pair may continue growing towards 1.2935. After breaking the Triangle’s downside border and fixing below 1.2705, the price may resume moving downwards.

BTCUSD, “Bitcoin vs US Dollar”

BTCUSD is trading at 8830.00; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 8865.00 and then resume moving downwards to reach 7615.00. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 9405.00. In this case, the pair may continue growing towards 9965.00.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By Orbex

The Institute of Supply Management will be releasing its survey results on non-manufacturing or services activity this week. The data covers the month of February. Investors expect a modest decline in the index.

After rising to 55.5 in January, the non-manufacturing index is forecast to dip slightly to 55.1 in February.

The forecasts remain consistent with the view that global economic activity is indeed taking a hit due to the virus outbreak. However, it is hard to forecast accurately on the actual impact.

Taking cues from the manufacturing and non-manufacturing reports from China over the last weekend, it was a sobering reading. Both counts of the indexes fell to multi-year all-time lows. This was even worse than the time during the financial crisis. Therefore, markets are likely prepared for a disappointing reading.

In February, both manufacturing and non-manufacturing activity showed strong resilience. Both measures came out beating estimates. Over the past month, various regional indicators were also on a firm footing.

But given the current market concerns, a weaker reading on the index will only give more impetus for investors to sell. Even a strong reading will unlikely help to do much. The US economy has been somewhat resilient so far. However, due to the interdependency of trade, there is a strong chance that the momentum in growth will slow.

For the moment, forward tracking GDP measures point to a 2% average growth rate. This is almost the same pace of quarterly GDP growth since Q3 2019.

Fed Getting Ready to Act if Needed

Last week, on Friday, Fed Chair Jerome Powell called for an extraordinary meeting. It was an effort to calm investor’s nerves. However, the statement was cautious, in order not to further churn the markets.

The Fed chair’s speech attempted to soothe the markets. Powell said that the US economy was “fine” for the moment, but also said that the central bank was ready to act if needed. So far, economic data from the US, at least until January has been solid.

But that could change rather quickly. The next Fed meeting is on March 18^th. Investors are starting to bet that the Fed will cut rates this year.

This is contrary to the Fed’s dot plot which indicates that there will be no rate cuts during the year.

Amid the prevailing situation, it is likely that the central bank will be closely monitoring the major gauges of the economy. This includes the ISM’s non-manufacturing PMI as well. Therefore, any signs of weakness in these indicators will trigger the Fed to shift from a neutral to a likely dovish forward guidance.

Will the US Services Industry Get Hit by the Coronavirus?

For the moment, investors will have to wait and watch how the data unfolds. According to some reports, the virus is expected to wipe out more than $10 billion from the US travel industry.

Half of these losses are forecast to come just this year. Due to reduced air travel, the tourism and hospitality industry is also likely to suffer. This, in turn, could prove to be a drag on the non-manufacturing PMI survey.

Many major publicly listed companies have already issued warnings of lower earnings in the coming quarters. This was flagged off by Apple Inc. which came out early to warn investors. Many other companies followed suit as well.

For the moment, investors remain in a panic mode. A positive reading on the non-manufacturing PMI will not help investors much. But a negative reading could once again see investors reacting negatively to the report.

By Orbex

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.10416
• Open: 1.11305
• % chg. over the last day: +0.83
• Day’s range: 1.11203 – 1.11555
• 52 wk range: 1.0879 – 1.1572

Greenback continues to lose positions against the single currency. Yesterday the growth of EUR/USD quotes exceeded 100 points. The trading instrument reached two-month highs. The U.S. dollar remains under pressure amid growing expectations that the Fed will cut interest rates to support the U.S. economy amid the spread of the COVID-19 virus. Currently, the EUR/USD currency pair is consolidating in the range of 1.11100-1.11850. We expect inflation statistics from the EU. We recommend you to open positions from key levels.

At 12:00 (GMT+2:00) the EU will publish the report on inflation.

The indicators signal the power of buyers: the price has fixed above 50 MA and 100 MA.

MACD histogram is in the positive zone, which gives a signal to buy EUR/USD.

The Stochastic Oscillator is in the neutral zone, the %K line crosses the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.11100, 1.10500, 1.10000
• Resistance levels: 1.11850, 1.12200, 1.12500

If the price fixes above 1.11850, expect further growth toward 1.12200-1.12500.

Alternatively, the quotes could descend toward 1.10600-1.10400.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.27878
• Open: 1.27509
• % chg. over the last day: -0.29
• Day’s range: 1.27405 – 1.27973
• 52 wk range: 1.1959 – 1.3516

The GBP/USD currency pair has stabilized. Financial markets participants are waiting for additional drivers. At the moment sterling is in sideways movement with a rather wide range. The key support and resistance levels are 1.27400 and 1.28100, respectively. Today investors will evaluate important economic reports from UK. We recommend you to open positions from key levels.

At 11:30 (GMT+2:00) an index of business activity in the UK construction sector will be published.

The indicators signal the sellers’ power: the price has fixed below 50 MA and 100 MA.

The MACD histogram is in the negative zone but above the signal line, which gives a weak signal to sell GBP/USD.

The Stochastic Oscillator is located in the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.27400, 1.27000
• Resistance levels: 1.28100, 1.28550, 1.29000

If the price fixes below the support level at 1.27400, expect the quotes to fall toward 1.27000-1.26800.

Alternatively, the quotes could grow toward 1.28500-1.28800.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.34332
• Open: 1.33288
• % chg. over the last day: -0.60
• Day’s range: 1.33188 – 1.33629
• 52 wk range: 1.2949 – 1.3566

There is a mixed technical picture on the USD/CAD currency pair. At the moment Loonie is consolidating. The trading instrument tests local support and resistance levels: 1.33200 and 1.33650, respectively. USD/CAD quotes can correct further. We recommend that you pay attention to the black gold price dynamics. We recommend you to open positions from key levels.

The Economic News Feed for 03.03.2020 is calm.

Indicators do not give accurate signals: the price has crossed 100 MA.

Histogram of MACD is in the negative zone, which indicates a bearish sentiment.

The Stochastic Oscillator is located near the overbought zone, the %K line is above the %D line, which gives a weak signal to buy USD/CAD.

Trading recommendations

• Support levels: 1.33200, 1.32950, 1.32650
• Resistance levels: 1.33650, 1.34000, 1.34600

If the price fixes below 1.33200, expect the quotes to correct toward 1.32900-1.32600.

Alternatively, the quotes could grow toward 1.34000-1.34300.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 107.449
• Open: 108.316
• % chg. over the last day: +0.79
• Day’s range: 107.661 – 108.536
• 52 wk range: 104.45 – 113.53

USD/JPY quotes continue to consolidate after a prolonged decline. There is no defined trend. The trading instrument tests key support and resistance levels at 107.400 and 108.500, respectively. Technical correction of USD/JPY currency pair is not excluded in the nearest future. We recommend that you pay attention to the dynamics of the US government securities yield. We recommend you to open positions from key levels.

The Economic News Feed for 03.03.2020 is calm.

Indicators do not give accurate signals: the price has crossed 50 MA.

The MACD histogram is near the 0 mark.

The Stochastic Oscillator started to exit the oversold area, the %K line is above the %D line, which indicates the development of bullish sentiment.

Trading recommendations

• Support levels: 107.400, 107.000
• Resistance levels: 108.500, 109.300, 110.000

If the price fixes above 108.500, USD/JPY quotes are expected to correct to 109.000-109.500.

Alternative, the quotes could decline toward 107.000.

by JustForex

By CentralBankNews.info

Australia’s central bank lowered its benchmark cash rate by another 25 basis points to 0.50 percent, the first central bank among developed economies to lower its rate this year, saying this “was to support the economy as it responds to the global coronavirus outbreak.”

The Reserve Bank of Australia (RBA), which already lowered its rate three times in 2019 by a total of 75 basis points, most recently in October, said economic growth in the first quarter of this year is “likely to be noticeably weaker than earlier expected” and “the board is prepared to ease monetary policy further to support the Australian economy.”

The Reserve Bank of Australia released the following statement:

By Alpari.com

By Alpari.com