Article by: ETO Markets
Investors will be watching the US core Personal Consumption Expenditure price index data for January, which is scheduled for release on Thursday, for new indications on the timing of rate decreases. If the underlying inflation data proves to be stickier than anticipated, the market will reduce its expectations for rate reductions. Such a result might cause the price of gold to decline.
Geopolitically, as both Israel and Hamas have played down hopes for a ceasefire, tensions between them have gotten worse. Hamas, which is supported by Palestine, reported that it has fired several missiles in the direction of northern Israel.
Negative Tuesday's announcement of US Durable Goods Orders data for January failed to spark increases in the price of gold. Investors had predicted a 4.5% decrease in new orders for durable goods, but actual orders were down 6.1%. A weak demand for durable goods is a sign that consumer spending is not expected to improve.
With the second estimate of Q4 GDP showing that the economy grew by 3.2% instead of 3.3% as expected, the US Dollar rise has temporarily stalled. The US Dollar Index surges above 104.00 as investors' need for safe-haven assets has increased due to uncertainties surrounding US economic data.
The European Commission's estimate of February's consumer confidence was released by the Eurozone. The market predictions and the January reading were matched by the leading indicator, which printed at -15.5. On the other side of the globe, the United States disclosed an update to its Q4 GDP, showing a figure of 3.2%, a little less than the 3.3% predicted and previously computed. Furthermore, the December -$89.1 billion shortfall in the Goods Trade Balance was worsened to a $90.1 billion deficit in January.
The EUR/USD pair's daily chart indicates that it maintains between Fibonacci levels but that the upward momentum is still eroding. Technical indications continued to move in positive directions, indicating a decline in purchasing activity as opposed to a new push for selling. The EUR/USD pair simultaneously develops a few pips below a flat 200-SMA and oscillates around a somewhat bullish 100-SMA. At roughly … , the 20-SMA is likewise directionless.
The 4-hour chart indicates that, in the short term, the pair stays above a flat 100-SMA and below its 20- and 200-SMAs. Simultaneously, technical indicators showed cautious purchasing activity as they recovered from their intraday lows and are currently holding inside negative levels. To continue advancing, EUR/USD must overcome the stationary resistance level of ...
Before starting to lower interest rates, BoE policymakers need more proof to feel confident that inflation will steadily return to the 2% target. The annual shop price inflation dropped to 2.5% in February, the lowest since March 2022, according to a report by the British Retail Consortium, which appears to provide some respite for households. Nonetheless, the prognosis for consumer price inflation remains sticky due to robust wage growth and significant service inflation.
A build-up of bearish momentum was highlighted when the 4-hour chart's Relative Strength Index fell below 50 and the GBP/USD pair broke below both the 200-SMA and the ascending trend line.
Prior to … and … where the Fibonacci 38.2% retracement of the long-term rise is, the 100-SMA near … lines up as the initial support. Before … , 200-SMA near … , rising trend line, and Fibonacci 23.6% retracement align as a significant resistance area on the upswing.
