Reasons behind the USD's advance, the earnings season in the United States, the outlook for EUR, JPY, Apple, Amazon, and more in this video!
Weekly Forex Outlook: Feb. 26 - Mar. 2
The US dollar had a positive week. The minutes of the Federal Reserve’s January meeting showed that the members of the central bank expected higher inflation and were more confident of the need to keep raising interest rates.
The euro will remain under pressure because of political uncertainty ahead of Italy’s national election on March 4. For now, the level of 1.25 looks like a significant obstacle for the pair. The main risk is a so-called “hung” parliament, which won’t be able to make any decisions. At the same time, if Italy avoids such outcome, the euro will get a boost. Traders also await the ECB meeting on March 8. The central bank may raise growth and inflation forecasts and hint to the end in monetary stimulus. Given these potential future bullish drivers, we think that any declines in EUR/USD will be temporary.
The main drivers of the British pound area Brexit negotiations news and expectations about Bank of England’s rate hikes, which fluctuate between high and low. We expect this instability to continue. The dynamics of GBP/USD will highly depend on what happens next. Support is at 1.3770.
Japanese yen is doing fine against AUD, NZD, EUR, GBP as the prospect of a faster pace of US rate hikes soured investors’ risk sentiment. Key levels for USD/JPY are 110.00 and 105.00.
The key thing to watch will be the congressional testimony on monetary policy of the Fed’s chairman Jerome Powell on Wednesday, Feb. 28.
It will be interesting to have a look at Chinese manufacturing data on Wednesday to know how this big economy is doing. At the same day, we’ll get the euro area’s inflation and the second estimate of the US GDP growth in Q4.
Thursday will be very important for AUD: the country will release private capital expenditure index. This is one of the main indicators of Australian economic health and we have no doubts that it will move the market.
Britain will release Manufacturing PMI on Thursday and Construction PMI on Friday. US ISM Manufacturing PMI on Thursday and Canada’s GDP on Friday will be also important.
This week, we will continue monitoring the developments in the stock and commodity markets as tensions between Ukraine and Russia and Fed’s tightening cycle remain the main issues driving the markets.
Watch the video to discover what's happening with US500, Japanese yen, US dollar, gold, oil, and gas.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.