USD is weakening against its main competitors – EUR, JPY, and GBP. Due to a lack of publications of significant statistics, American investors follow the comments of the Fed representatives. So, yesterday, the vice-chairman of the US regulator, Richard Clarida, in an interview with CNBC expressed doubt that many market participants expected a rate cut shortly.
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Canadian Retail Sales data for December are due at 15:30 (GMT+2). Retail Sales indicator measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It is the primary indicator of consumer spending, which influences the GDP. Sales are expected to slow growth from 0.9% to 0.1%. The implementation of the forecast can put pressure on CAD.
This week, the cryptocurrency market had ambiguous dynamics. At first, quotes grew but then a recession started, as a result of which most of the leading assets lost the gained positions. Currently, Bitcoin is trading at 9590.00 (–1.6%), Ethereum is at 260.00 (+4.0%), Ripple is at 0.2700 (–4.5%), Bitcoin Cash is at 375.00 (–5.9%), while Bitcoin SV is at 286.00 (+0.5%). The total market capitalization decreased from $284 to $279 billion. The share of Bitcoin in the market decreased to 62.9%.
Since the beginning of this year, oil prices have lost more than 20% amid the consequences of a trade confrontation between the United States and China, fears of a decrease in Chinese demand for energy resources due to the coronavirus epidemic and disagreements of members of the OPEC+ agreement. However, the price has now entered a correction. In early February, it tested a local minimum at 53.50, renewed more than a year ago but the next week and a half regained more than $6 and is now trading at 59.20, 58.50.
On the H4 chart, the downtrend is still in force. The instrument is declining along the lower line of Bollinger Bands; the indicator cloud is expanded, which indicates a likely preservation of the downtrend in the short term. MACD histogram is in the negative zone building up volumes. The signal line is crossing the body of the histogram from above forming a stable signal to open sell orders. Stochastic is in the oversold zone; the oscillator lines are directed downwards; the signal to open short positions is still relevant.
January data on the euro area's Consumer Price Index are due at 12:00 (GMT+2). It is the main indicator of inflation in the country and determines the change in the level of retail prices for a particular basket of goods and services: food, transportation, utilities, healthcare, etc. It has a significant impact on monetary policy decisions. It is expected that the Consumer Price Index on an annualized basis will remain at the same level of 1.4%, and on a monthly basis it may decline from 0.3% to –1.0%. The implementation of the forecast can put pressure on EUR.
At 11:30 (GMT+2), preliminary data on Manufacturing and Services business activity indices in the UK for February will be released. The indicators are compiled from the enterprises responses about their purchasing activities and supply situations. At the same time, the attitude of purchasing managers to the current economic situation and prospects for its further development is evaluated. It is expected that the Manufacturing PMI will decrease from 50.0 to 49.7 points and again move to the stagnation zone, while Services PMI will drop from 53.9 to 53.4 points. If the forecast proves right, GBP may fall under pressure.
Dow Jones index slightly deviated from the historical high at 29500.0 and is trading at 29100.0. There was no short-term reaction to the publication of FOMC protocols, but key aspects of the report can set goals for a long-term trend in the index. Firstly, the federal funds rate was kept in the target range of 1.50%–1.75%, which is quite appropriate for the current monetary policy. Secondly, the general inflation rate remains below 2%, which allows us to expect a decrease in the indicator in the future.
At 11:00 (GMT+2), preliminary data on Manufacturing and Services business activity indices in euro area for February will be released. The indicators are compiled from the enterprises responses about their purchasing activities and supply situations. At the same time, the attitude of purchasing managers to the current economic situation and prospects for its further development is evaluated. It is expected that the Manufacturing PMI will decrease from 47.9 to 47.5 points, while Services PMI will decline from 52.5 to 52.2 points. The implementation of the forecast can put pressure on EUR.
The GBP/USD pair moves within the downward channel of 1.2870–1.3100. Since last week, the upper limit of the range has shifted downward. The rate depends on USD dynamics and ignores the vast positive UK macroeconomic statistics: reducing the number Claimant Count to 5.5K with the forecast of 22.6K, reducing the deficit in the growth of CPI to –0.3% against the expected –0.4%, and finally, the growth in retail sales for January to 0.9% against the forecasted 0.7%.