Technical Analytics Report

Fundamental Analysis - Morning Market Review 23 Feb 2021

 

EUR/USD

 EUR is marginally strengthening against USD during today’s Asian trading session, updating its local highs since January 25. Investors are selling USD by inertia, awaiting the emergence of new drivers in the market, which may be Jerome Powell’s speech in the US Congress and the vote on the aid package for the US economy in the amount of USD 1.9 trillion in the House of Representatives. In addition, analysts expect further recovery in US bond yields, which, together with a correction on stock markets, may also provide significant support to USD. EUR, in turn, received support after yesterday’s publication of macroeconomic statistics from Germany. IFO Business Climate Index in February rose from 90.3 to 92.4 points against the forecast of growth only up to 90.5 points. IFO Expectations jumped from 91.5 to 94.2 points, significantly exceeding the expected 91.8 points.

 GBP/USD

 GBP retains “bullish” rally against USD during today’s morning session, updating record highs since April 2018. The instrument is actively testing 1.4080 for a breakout and it seems to have every chance of consolidating above 1.4100. Macroeconomic statistics from the UK released today did not greatly affect the dynamics of the instrument, but turned out to be quite optimistic. Claimant Count Change in January fell by 20K after falling by 20.4K in the previous month. Analysts had expected a sharp rise in the indicator by 35K. The Unemployment Rate from ILO increased in December from 5% to 5.1% 3MoY, which coincided with market forecasts. The Average Earnings exceeded market expectations. In December, Average Earnings Including Bonus increased by 4.7% 3MoY, which turned out to be significantly better than analysts’ expectations at the level of +4.2% 3MoY.

 NZD/USD

 NZD is trading ambiguously during today’s Asian session, consolidating near 0.7320. The pair has renewed highs since April 2018 on Monday, receiving support from weak positions in USD, which is awaiting new drivers. A noticeable pressure on NZD today is exerted by extremely weak macroeconomic statistics from New Zealand. Retail Sales declined 2.7% QoQ after growing 28% QoQ in the previous quarter. Analysts had expected strong growth to remain at +26.7% QoQ. The RBNZ interest rate decision with an accompanying press conference is expected to be published tomorrow. It is predicted that the regulator will not change the parameters of monetary policy noticeably.

 USD/JPY

 USD is showing a tentative decline against JPY during today’s Asian session, again actively testing strong psychological support at 105.00. USD positions remain vulnerable amid expectations of approval of new measures to support the American economy in the amount of USD 1.9 trillion, which will lead to increased inflationary pressures. In turn, investors are responding positively to the active growth in the yields of US bonds, which are updating record highs. Today, investors are awaiting a speech by the Fed’s Chairman Jerome Powell in the US Congress, as well as the publication of macroeconomic statistics on the dynamics of retail sales and the S&P/Case-Shiller Home Price Indices. Interesting data from Japan will appear only at the end of the week with the publication of statistics on retail sales and industrial production.

 XAU/USD

 Gold prices are demonstrating multidirectional trading dynamics during today’s morning trading session, consolidating after another burst of “bullish” sentiment the day before. The instrument showed an increase of more than 1.5% on Monday, responding to another wave of growing concerns about US inflation and a rally in stock markets. In turn, a more confident rise in the value of gold was hampered by a further increase in the yield of US Treasury bonds. In the near future, investors will be watching the rhetoric of Jerome Powell in the US Congress, as well as the course of voting in the House of Representatives on a new package of measures to support the US economy in the amount of USD 1.9 trillion.

 Unemployment Rate. UK, 09:00 (GMT+2)

 The UK Unemployment Rate data for December are due at 09:00 (GMT+2). The indicator records the percentage of the number of unemployed citizens older than 18 to the total number of the population able to work. Only registered unemployed citizens are counted. The indicator is expected to increase from 5.0% to 5.1%, which may put pressure on GBP.

 Consumer Price Index. EU, 12:00 (GMT+2)

 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 level of 0.9%, and on a monthly basis it may reduce from 0.3% to 0.2%. The implementation of the forecast can put pressure on EUR.


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