Fed Chair Jerome Powell will testify today at 19:05 MT time. This event is crucial for traders as the tone of the speech may set the risk tone for the markets for the next two weeks.
Start the week with fresh analytics!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde. The risk-off sentiment prevailed during the last week, allowing the US dollar to rally higher. Elsewhere, US consumer sentiment and retail sales came out better than analysts expected.
This morning China’s data revealed the Chinese GDP rose by 4.9%, which was less than the forecasts of 5.5%. At the same time, other economic indicators from China exceeded expectations such as industrial production, retail sales, and unemployment rate. Investors shrugged off the worse-than-expected GDP as riskier currencies and stocks are rising.
Let’s start with the S&P 500. On the daily chart, we can see the stock index is forming the cup and handle pattern. If it reaches the resistance of 3 535, the bullish pattern will be completed, and the further breakout of this level will drive S&P to the all-time high of $3 580. Support levels are 3 445 and 3 400.
Moving on to the British pound. It’s edging higher amid the soft USD. However, on the Brexit front, things aren’t so good. UK Prime Minister Boris Johnson claimed that talks with the Eurozone are over, preparing for a trade relationship like between the EU and Australia. That means the EU and the UK are going to reach a deal without any privileges between them. But market participants still hope for some progress until the end of the year.
The move above the 50-day moving average of 1.3000 will drive GBP/USD to the last Monday’s high of 1.3080. On the flip side, if it drops below recent lows of 1.2870, it may fall to the key psychological mark of 1.2800.
New virus cases have sharply surged in Europe, pushing the euro down. If EUR/USD manages to break the key psychological mark of 1.1700, the way to the low of September 23 at 1.1650 will be open. In the opposite scenario, the move above recent highs of 1.1750 will push the pair to October’s high of 1.1830.
Finally, let’s speak about gold. It’s headed upwards. The move above the 200-period moving average of $1 915 will drive the yellow metal to October’s peak of $1 930. On the flip side, the move below the key psychological mark of $1 900 will push the yellow metal to the support of $1 890.
Follow speeches from two major central banks: Fed and ECB at 15:00 and 15:45 MT time. Stay tuned!
Non-farm payrolls, the most awaited economic report, will be out on March 5 at 15:30 MT time.
Australian GDP rose by 3.1%, exceeding analysts’ forecasts of 2.5%. The Australian dollar climbed after the release, but then joined its peers in falling against the USD.
Great news for oil bulls! OPEC and its allied producers agreed to expand output cuts for the next month.
The USD skyrocketed after Fed Powell’s speech. OPEC and allied producers agreed to extend production cuts for another month. Oil surged.
The European Central Bank publishes its monetary policy statement that includes an announcement of the interest rate on March 11, at 14:45 MT time.