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Anonymous Poll
46%
⬆️BUY
54%
⬇️SELL
UK inflation has come in slightly weaker than expected, but this does not significantly bring the rate cut date any nearer.
The CPI rose by 0.6% in February after a similar fall in January. Annual inflation slowed to 3.4% from 4.0%, vs expected 3.5%. Core CPI slowed its rise to 4.5% y/y in February after three months of stabilising at 5.1%.
Rising prices for services are driving core inflation. This is a very sluggish component, making it a marathon rather than a sprint for the Bank of England.
Input Producer prices fell 0.4% in February and are down 2.7% y/y. The index has retreated to May 2022 levels thanks to lower prices for energy, metals, and a range of agricultural products.
Output PPI have not shown much momentum over the past three quarters. Rising wage costs have offset the fall in input prices. The generally strong labour market is allowing manufacturers to regain profitability.
This is not bad news for the economy as it indicates business confidence, which is often self-sustaining.
The CPI rose by 0.6% in February after a similar fall in January. Annual inflation slowed to 3.4% from 4.0%, vs expected 3.5%. Core CPI slowed its rise to 4.5% y/y in February after three months of stabilising at 5.1%.
Rising prices for services are driving core inflation. This is a very sluggish component, making it a marathon rather than a sprint for the Bank of England.
Input Producer prices fell 0.4% in February and are down 2.7% y/y. The index has retreated to May 2022 levels thanks to lower prices for energy, metals, and a range of agricultural products.
Output PPI have not shown much momentum over the past three quarters. Rising wage costs have offset the fall in input prices. The generally strong labour market is allowing manufacturers to regain profitability.
This is not bad news for the economy as it indicates business confidence, which is often self-sustaining.
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Sterling rose by 0.1% against the general downtrend following the inflation release but very quickly returned to the general downtrend against the dollar.
Inflation is one of the variables that influences central bank decisions. Now, the markets are in a wait-and-see mode for the outcome of the FOMC meeting on Wednesday night and the Bank of England meeting on Thursday afternoon.
GBPUSD has lost ground over the past two weeks, failing to make gains after a long period of consolidation. Cable has now erased the recent gains and is back near 1.27.
In the weekly timeframe, GBPUSD is near the upper boundary of a descending corridor that has been in place since 2008. A break above would be a significant event, but the basic scenario in such cases is a reversal to the downside with a hold within the range. This week's events have enough potential to put an end to this consolidation.
Inflation is one of the variables that influences central bank decisions. Now, the markets are in a wait-and-see mode for the outcome of the FOMC meeting on Wednesday night and the Bank of England meeting on Thursday afternoon.
GBPUSD has lost ground over the past two weeks, failing to make gains after a long period of consolidation. Cable has now erased the recent gains and is back near 1.27.
In the weekly timeframe, GBPUSD is near the upper boundary of a descending corridor that has been in place since 2008. A break above would be a significant event, but the basic scenario in such cases is a reversal to the downside with a hold within the range. This week's events have enough potential to put an end to this consolidation.
#DXY #FOMC
Dollar Index: Some bullish bias before FOMC
The FOMC meeting is the main event of the day on Wall Street and can set the market mood for weeks to come, as the Fed often leads global monetary policy cycles.
No actual rate changes are expected today, and traders' attention will be focused on the FOMC's updated projections for interest rates, inflation, and the economy. Last time, in December, the Fed expected three rate cuts before the end of 2024. However, the market then priced in as many as five cuts.
Higher-than-expected inflation in recent months has led to a reassessment of expectations.
Dollar Index: Some bullish bias before FOMC
The FOMC meeting is the main event of the day on Wall Street and can set the market mood for weeks to come, as the Fed often leads global monetary policy cycles.
No actual rate changes are expected today, and traders' attention will be focused on the FOMC's updated projections for interest rates, inflation, and the economy. Last time, in December, the Fed expected three rate cuts before the end of 2024. However, the market then priced in as many as five cuts.
Higher-than-expected inflation in recent months has led to a reassessment of expectations.
Interest rate futures are now pricing in a 64% probability of three or more rate cuts by the end of the year and a 90% probability of two or more.
The shift in expectations from the current point is volatile for markets. Observers note that the economy is experiencing slower growth alongside higher inflation figures. This could prove to be a source of softening Powell's rhetoric while supporting further index gains and dollar declines.
Over the past six months, markets have only wanted to hear easing signals from the Fed and have ignored everything else. At the end of last year, it was absurd to see traders betting on five rate cuts in 2024. Now, the tide has turned, and there is a chance that the markets will also reach absurdity, but in a different direction.
Along with the change in the direction of market expectations regarding the Fed's projections, the dollar has also changed.
The shift in expectations from the current point is volatile for markets. Observers note that the economy is experiencing slower growth alongside higher inflation figures. This could prove to be a source of softening Powell's rhetoric while supporting further index gains and dollar declines.
Over the past six months, markets have only wanted to hear easing signals from the Fed and have ignored everything else. At the end of last year, it was absurd to see traders betting on five rate cuts in 2024. Now, the tide has turned, and there is a chance that the markets will also reach absurdity, but in a different direction.
Along with the change in the direction of market expectations regarding the Fed's projections, the dollar has also changed.
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The medium-term technical picture for the DXY is slightly bullish. Since the start of the day on Wednesday, the dollar has moved above its 200-day and 50-day moving averages. At the same time, the fast average will cross the slow average in a day or two, forming a "golden cross".
The intersection of these two moving averages is traditionally a strong signal, but this has had a poor recent track record for this instrument. Last September's "golden cross" occurred when more than 2/3 of the rally was behind us, and the inverse cross - the death cross - was followed by a rise, not a fall as the signal suggested.
In our view, a strong upside momentum from Wednesday's results could be the starting point for a medium-term uptrend in the dollar. A sharp decline today will be a reason to pause for the next few days, and only a sustained decline will signal the establishment of a bearish trend in the DXY.
The intersection of these two moving averages is traditionally a strong signal, but this has had a poor recent track record for this instrument. Last September's "golden cross" occurred when more than 2/3 of the rally was behind us, and the inverse cross - the death cross - was followed by a rise, not a fall as the signal suggested.
In our view, a strong upside momentum from Wednesday's results could be the starting point for a medium-term uptrend in the dollar. A sharp decline today will be a reason to pause for the next few days, and only a sustained decline will signal the establishment of a bearish trend in the DXY.
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🔔 FOMC decision @18:00 GMT. All eyes on Fed projections 👁 Are you Bullish 📈 or Bearish 📉 on USD?
Anonymous Poll
58%
⬆️Bullish/BUY
42%
⬇️Bearish/SELL
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🚀GOLD tops $2200, a new all-time high, after dovish FOMC 🕊 👉Will the growth continue?
Anonymous Poll
63%
⬆️ BUY
37%
⬇️ SELL
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#WaveAnalysis #ANF
Abercrombie & Fitch rising strongly
Likely to rise to resistance level 140.00
Abercrombie & Fitch previously reversed up with the daily Morning Star from the key support level 137.40 (which also reversed the price in February) intersecting with the support trendline of the daily up channel from October.
The upward reversal from the support level 137.40 started the active impulse wave 3, which is a part of the higher order impulse wave (5) from October.
Given very sharp daily uptrend, Abercrombie & Fitch can be expected to rise to the next resistance level 140.00, which stopped the price at the start of this month.
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Abercrombie & Fitch rising strongly
Likely to rise to resistance level 140.00
Abercrombie & Fitch previously reversed up with the daily Morning Star from the key support level 137.40 (which also reversed the price in February) intersecting with the support trendline of the daily up channel from October.
The upward reversal from the support level 137.40 started the active impulse wave 3, which is a part of the higher order impulse wave (5) from October.
Given very sharp daily uptrend, Abercrombie & Fitch can be expected to rise to the next resistance level 140.00, which stopped the price at the start of this month.
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The Fed's comments returned risk appetite, immediately bringing buyers back to crypto. In 24 hours, the total market cap rose 7.7% to $2.55 trillion.
Bitcoin is showing roughly the same amplitude of growth, but Ethereum and Solana are adding around 10%.
#Bitcoin has held within a classic correction, never falling below 61.8% of the rally around $60.3K. If the positivity doesn't dissipate quickly, the next major milestone will be a return to highs above $73K.
#Ethereum reversed to the upside shortly after touching the 50-day moving average, confirming that this was a correction to the upside rather than a reversal to the downside.
#Solana lost over 22% between March 18th and 20th, from $210 to $162, and is back at $190 at the time of writing.
In all three cases, we have seen technical confirmation of the bullish trend and a sharp recovery from the correction. The pullback from the highs earlier in the week attracted active buyers on the back of Fed and other central bank weakness.
Bitcoin is showing roughly the same amplitude of growth, but Ethereum and Solana are adding around 10%.
#Bitcoin has held within a classic correction, never falling below 61.8% of the rally around $60.3K. If the positivity doesn't dissipate quickly, the next major milestone will be a return to highs above $73K.
#Ethereum reversed to the upside shortly after touching the 50-day moving average, confirming that this was a correction to the upside rather than a reversal to the downside.
#Solana lost over 22% between March 18th and 20th, from $210 to $162, and is back at $190 at the time of writing.
In all three cases, we have seen technical confirmation of the bullish trend and a sharp recovery from the correction. The pullback from the highs earlier in the week attracted active buyers on the back of Fed and other central bank weakness.
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#WaveAnalysis
#AIG broke key resistance level 75.00
Likely to rise to resistance level 80.00
AIG recently broke the key resistance level 75.00, intersecting with the resistance trendline of the daily up channel from October.
The breakout of the resistance level 75.00 accelerated the active short-term impulse wave 3 of the intermediate impulse wave (5) from January.
Given the clear daily uptrend, AIG can be expected to rise further to the next resistance level 80.00.
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#AIG broke key resistance level 75.00
Likely to rise to resistance level 80.00
AIG recently broke the key resistance level 75.00, intersecting with the resistance trendline of the daily up channel from October.
The breakout of the resistance level 75.00 accelerated the active short-term impulse wave 3 of the intermediate impulse wave (5) from January.
Given the clear daily uptrend, AIG can be expected to rise further to the next resistance level 80.00.
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#WaveAnalysis
#GBPCAD broke support level 1.7200
Likely to fall to support level 1.7070
GBPCAD currency pair continues to fall after recently breaking the support level 1.7200 (former monthly high from February, which has been reversing the pair from last month).
The breakout of the support level 1.7200 accelerated the active short-term impulse wave c.
Given very strongly bearish sterling sentiment seen today, GBPCAD currency pair can be expected to fall to the next support level 1.7070, coinciding with the support trendline from September.
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#GBPCAD broke support level 1.7200
Likely to fall to support level 1.7070
GBPCAD currency pair continues to fall after recently breaking the support level 1.7200 (former monthly high from February, which has been reversing the pair from last month).
The breakout of the support level 1.7200 accelerated the active short-term impulse wave c.
Given very strongly bearish sterling sentiment seen today, GBPCAD currency pair can be expected to fall to the next support level 1.7070, coinciding with the support trendline from September.
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#Crypto market closed lower on Thursday, but little changed from the $2.53 trillion market cap over 24 hours.
However, the internal dynamics are mixed. #Bitcoin loses 1.5% and retreats to $66K, while #Ethereum hovers around $3500 (-0.25%), #BNB and #DOGE are up over 5%, and #XRP is up around 4%.
It's as if the cryptocurrencies haven't chosen their shepherd: should they follow negative from the strengthening dollar or positive after new heights of US indices? We lean towards the latter, believing that the dollar strengthens against even weaker peers whose central banks are more dovish.
Overall, G10 central banks’ dovishness eases a liquidity drain, which is positive for cryptocurrencies that are sensitive to it.
However, the internal dynamics are mixed. #Bitcoin loses 1.5% and retreats to $66K, while #Ethereum hovers around $3500 (-0.25%), #BNB and #DOGE are up over 5%, and #XRP is up around 4%.
It's as if the cryptocurrencies haven't chosen their shepherd: should they follow negative from the strengthening dollar or positive after new heights of US indices? We lean towards the latter, believing that the dollar strengthens against even weaker peers whose central banks are more dovish.
Overall, G10 central banks’ dovishness eases a liquidity drain, which is positive for cryptocurrencies that are sensitive to it.
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The Fed left its key interest rate unchanged, and the forecast for its reduction this year was unchanged, but it supported risk appetite in the global markets. After the announcement, the US dollar accelerated its decline, losing around 1% from peak to trough. All three major US stock indexes hit all-time highs, and gold rallied to new highs.
Markets were encouraged by Powell's words that his view of the inflation outlook had not changed in recent weeks. Remember that during this period, inflation reports have come in above expectations and questioned the downward trajectory.
Another positive was the removal of risks that the FOMC would reduce the number of projected rate cuts.
Also positive was the confirmation of the previously announced plans to reduce the pace of securities sales from the balance sheet. This will add some liquidity to the financial system, which is supportive of risk demand, although the overall impact is relatively small.
Markets were encouraged by Powell's words that his view of the inflation outlook had not changed in recent weeks. Remember that during this period, inflation reports have come in above expectations and questioned the downward trajectory.
Another positive was the removal of risks that the FOMC would reduce the number of projected rate cuts.
Also positive was the confirmation of the previously announced plans to reduce the pace of securities sales from the balance sheet. This will add some liquidity to the financial system, which is supportive of risk demand, although the overall impact is relatively small.
The dollar's reaction is in line with our earlier expectations. The Fed's dovish tone triggered an impulsive sell-off in the dollar, with the DXY falling sharply below its 200- and 50-day moving averages.
As expected, and as we wrote before the release, the dollar's downward momentum does not look sustainable, given the strong technical picture that has been building over the past few weeks.
From a fundamental perspective, it isn't easy to sell the dollar when other central banks are set to follow suit. At the end of last year, there was speculation that the Fed would be the first to ease, which weakened the dollar. However, a strong economy and labour market have levelled the playing field. In addition, the SNB unexpectedly cut rates by 25 basis points on Thursday, highlighting Europe's willingness to ease.
The expected synchronised easing by the world's major central banks is feeding buyer interest in equity markets.
As expected, and as we wrote before the release, the dollar's downward momentum does not look sustainable, given the strong technical picture that has been building over the past few weeks.
From a fundamental perspective, it isn't easy to sell the dollar when other central banks are set to follow suit. At the end of last year, there was speculation that the Fed would be the first to ease, which weakened the dollar. However, a strong economy and labour market have levelled the playing field. In addition, the SNB unexpectedly cut rates by 25 basis points on Thursday, highlighting Europe's willingness to ease.
The expected synchronised easing by the world's major central banks is feeding buyer interest in equity markets.
Gold's retreat is not yet a reversal
The Fed's comments led to a 3% rise in gold, but the dollar's recovery in the second half of Thursday reduced this gain to just 0.5%. Technically, the outlook is unclear, but fundamentally, things are still on the side of the bulls.
In early trading on Thursday, gold slipped to $2222 on thin liquidity and the triggering of stop orders, which washed short positions out of the market. Throughout the day on Thursday, a stabilisation above $2200 looked attractive for many to take money off the table.
The technical analysis so far gives a mixed picture on the daily timeframes. ⬇️⬇️
The Fed's comments led to a 3% rise in gold, but the dollar's recovery in the second half of Thursday reduced this gain to just 0.5%. Technically, the outlook is unclear, but fundamentally, things are still on the side of the bulls.
In early trading on Thursday, gold slipped to $2222 on thin liquidity and the triggering of stop orders, which washed short positions out of the market. Throughout the day on Thursday, a stabilisation above $2200 looked attractive for many to take money off the table.
The technical analysis so far gives a mixed picture on the daily timeframes. ⬇️⬇️