Technical Analytics Report


 EUR shows a slight increase against USD during today’s Asian session, developing a “bullish” momentum formed at the end of last trading week. A weak report on Initial and Continuing Jobless Claims in the US, released on Thursday, continued to support EUR. In turn, Friday’s statistics managed to support EUR due to further growth in business activity in the manufacturing sector. German Markit Manufacturing PMI in February rose from 57.1 to 60.6 points, which was significantly better than negative forecasts of a decline to 56.5 points. In the eurozone, business activity in the manufacturing sector also showed an increase from 54.8 to 57.7 points against the forecast of 54.4 points. However, the services sector is still under pressure due to ongoing quarantine restrictions. In the eurozone in February, the Services PMI fell from 45.4 to 44.7 points, while forecasts assumed its growth to 45.9 points.


 GBP is showing uptrend against USD during today’s morning session, hitting record highs since April 2018. GBP continues to benefit from the weakness of USD, and is also responding positively to the marked improvement in the epidemiological situation in the country and in the world. Thanks to the active pace of vaccinations, the UK authorities will soon be able to begin lifting the existing restrictive measures, and the markets hope that 2021 may pass without new lockdowns. The strong macroeconomic statistics from the UK released last Friday also supported the “bullish” sentiment for the instrument. Markit Manufacturing PMI in February rose from 54.1 to 54.9 points with a forecast of a decline to 53.2 points. Services PMI for the same period jumped sharply from 39.5 to 49.7 points, which significantly exceeded market expectations of 41 points.


 AUD has shown ambiguous trading dynamics against USD during today’s Asian session, while also hitting record highs since mid-March 2018. The reason for the continued “bullish” sentiment on the instrument is the vulnerable positions in USD, as well as the growing demand for risky assets and the recovery of commodity markets. In turn, the published macroeconomic statistics from Australia in recent days could be better. Friday’s data reflected a decline in the Commonwealth Bank Services PMI in February from 55.6 to 54.1 points, which was worse than market expectations of 55.8 points. Manufacturing PMI corrected from 57.2 to 56.6 points, which was also weaker than the projected value of 57.3 points. Finally, investors reacted extremely negatively to the release of statistics on retail sales. In January, the volume of sales increased only by 0.6% MoM after a decrease of 4.1% MoM in the previous month. Analysts expected the indicator to grow by more significant 2% MoM.


 USD has shown strong gains against JPY during today’s Asian session, recovering from an equally strong decline in the second half of last trading week, when USD retreated from its record highs since September 11, 2020. Investors reacted to the publication of weak data on the dynamics of jobless claims, which reflected the slow recovery of the US labor market, by selling USD. In turn, JPY received support from macroeconomic publications from Japan. Jibun Bank’s Manufacturing PMI rose from 49.8 to 50.6 in February, while analysts had predicted it would decline to 49.7. Markets in Japan are closed today to celebrate the Emperor’s Birthday, so investor attention will be focused on US publications. In addition, closer to the end of the daytime session, investors are expecting a speech by the US Federal Reserve Representative Michelle Bowman.


 Gold prices are showing a slight increase during today’s trading, developing a corrective impetus that formed at the end of last week. Last Friday, the instrument renewed record lows since early July 2020, but was able to recover due to corrective sentiment in the market and weak positions in USD, which remained under pressure from weak data on the US labor market. In turn, the general excitement in the market is putting strong pressure on the position of “safe” gold. High yield on US Treasury bonds provokes further growth in demand for risky assets. The improvement of the epidemiological situation in the USA and in the world also helps. Countries are gradually lifting the quarantine restrictions as vaccination campaigns spread and accelerate.

 German IFO Business Climate Index. Germany, 11:00 (GMT+2)

 At 11:00 (GMT+2), the February German Business Climate Index from the IFO Institute will be published. It is based on a survey of the heads of 7K enterprises in the manufacturing industry, construction sector, wholesale and retail trade. At the same time, an assessment of the current business situation and expectations for the next six months is carried out. It is expected that in February the indicator may rise from 90.1 to 91.8 points. The implementation of the forecast may support the single European currency.

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