Technical Analytics Report

Morning Market Review 04 March 2021


EUR is declining against USD during today’s Asian session, developing a weak “bullish” impetus formed the day before. On Tuesday, EUR traded with an uptrend, provoked by a large-scale correction in the bond market. The macroeconomic statistics from Europe published yesterday turned out to be ambiguous and only slightly affected the dynamics of the instrument. Markit Services PMI in Germany in February declined from 45.9 to 45.7 points, which turned out to be worse than the neutral forecast. Markit Composite PMI for the same period corrected from 51.3 to 51.1 points. Meanwhile, in the eurozone, business activity continues to gain momentum as the epidemiological situation in the world improves. Markit Services PMI increased from 44.7 to 45.7 points, while Markit Composite PMI strengthened from 48.1 to 48.8 points, exceeding neutral forecasts.


 GBP is trading with ambiguous dynamics during today’s Asian session, consolidating near 1.3950. Investors expect the emergence of new drivers, which may be the data on the US labor market for February that will be published on Friday. However, the markets have not experienced a lack of macroeconomic statistics throughout this week. Markit Services PMI in the UK in February fell from 49.7 to 49.5 points, never reaching 50 points. US business activity statistics were mixed. Markit Services PMI rose from 58.9 to 59.8 points, while the similar index from ISM, on the contrary, fell sharply from 58.7 to 55.3 points. The ADP report on nonfarm payrolls, which reflected an increase in jobs of only 117K in February after an increase of 195K in the previous period, also remains without due attention at the moment. Today, traders will be focused on the speech of the Fed Chair Jerome Powell, as well as the updated statistics on jobless claims in the US.


 AUD is slightly strengthening against USD, leveling the results of yesterday’s “bearish” session, when the instrument retreated from its local highs. USD managed to demonstrate growth, despite the publication of extremely ambiguous macroeconomic statistics from the US on business activity and employment in the private sector. The data on business activity in Australia turned out to be no better; however, the main support for the instrument was provided by the statistics on the dynamics of Australian GDP. In Q4 2020, the Australian economy added 3.1% QoQ, only slightly slowing down after the previous increase of 3.4% QoQ. Analysts had expected growth rate at 2.5% QoQ. On an annualized basis, the pace of economic decline slowed from –3.7% YoY to –1.1% YoY, outstripping the forecasts of –1.8% YoY. Investors are now focusing on the statistics on the dynamics of exports from Australia (+6% MoM after increasing by 3% MoM in the previous month), which provoked a significant increase in the trade surplus in January.


 USD is strengthening against JPY during today’s morning trading session, trying to consolidate above the strong resistance at 107.00. USD continues to be in high demand; however, the published macroeconomic statistics in the United States somewhat restrains the “bullish” activity on the instrument. Investors reacted negatively to the release of ADP data on private sector employment in February and are eagerly awaiting the release of the final report on the US labor market at the end of the week. Today, JPY is slightly supported by the Japanese macroeconomic data. Consumer Confidence Index in February rose from 29.6 to 33.8 points, while the forecasts suggested an increase only to 30.6 points.


 Gold prices show corrective growth during today’s Asian session, retreating from record lows, updated the day before. The reason for the next wave of instrument sales on Wednesday was the high yield on US Treasury bonds, as well as rather strong positions in USD, which largely ignored the appearance of weak macroeconomic statistics in the US. American investors have also responded to the improvement in the country’s epidemiological situation. In particular, the state of Texas is preparing to lift the requirement to wear a mask and lift a number of restrictions on the work of small and medium-sized businesses. President Joe Biden also supported the optimism in the market by stating that US adults will be able to get vaccinated by the end of May.

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