The highlights of this week’s activities!
The following major economic indicators are expected to be released this week, much anticipation on the part of the financial markets:
• Australia’s retail sales index on Tuesday, the Eurozone’s consumer confidence and GDP indices, and the US consumer confidence and employment opportunities indices.
• Expectations are that the US Federal Reserve will maintain interest rates at their current range of 5.00% to 5.25% when it releases its interest decision on Wednesday. Regarding the direction of interest rates in the upcoming phase, markets are pricing in a 50% chance of a rate reduction at the March meeting, so all eyes will be on the speech and tone of Federal Reserve Chairman Jerome Powell.
The most significant US events of the previous week were as follows:
• The Manufacturing Purchasing Managers’ Index increased by 50.3 points, above forecasts and the prior reading of 47.9.
• The Services Purchasing Managers’ Index increased, showing a 52.9-point gain that was higher than the prior reading (52.9) and the forecast (51.0).
• The GDP index grew by 3.3% in the fourth quarter, above the prior estimate of 4.9% and the forecast of 2.0%.
• The basic durable goods orders index increased, showing a 0.6% gain that was higher than the prior reading of 0.5% and the expected 0.2% growth.
• The new house sales index increased to 664K, above both the prior figure (615K) and the expected value of 645K.
• The initial jobless claims index rose to 214K, which exceeded expectations (200K) and the previous reading (189K).
• US crude oil inventories fell by 9.23 million barrels, which is lower than expectations (-2.15M) and the previous reading (-2.49M).
• The core personal consumption expenditures price index declined on an annual basis, recording 2.9%, which is lower than expectations (3.0%) and the previous reading (3.2%).
• The personal spending index rose on a monthly basis, recording 0.7%, which exceeded expectations and the previous reading (0.4%).
• The pending home sales index rose to 8.3%, which exceeded expectations (1.5%) and the previous reading (-0.3%).
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Technical Analysis:
EUR/USD:
If the euro against the dollar breaks the pivot point of 1.0865, it may potentially target and test the support levels of 1.0799, 1.0745, and 1.0679. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0918, 1.0985, and 1.1038.
GBP/USD:
If the pound against the dollar breaks the pivot point of 1.2708, it has the potential to test the support levels of 1.2642, 1.2582, and 1.2516. However, if it exceeds the pivot point, it may test resistance levels of 1.2768, 1.2834, and 1.2894.
USD/JPY:
If the pivot point of 147.82 is broken for the dollar against the yen, there is a possibility that it will target the support levels 146.95, 145.77, and 144.90. But if it exceeds the pivot point, it is likely to target the resistance levels 149.00, 149.86, and 151.04.
GOLD:
If the pivot point of 2030 is broken for gold, there is a possibility that it will target the support levels 2015, 1994, and 1978. But if it exceeds the pivot point, it is likely to target the resistance levels 2051, 2067, and 2088.
BRENT CRUDE OIL:
If the pivot point of 81.72 for crude oil is broken, there is a possibility that it will target the support levels of 79.63, 75.72 and 73.63. If it exceeds the pivot point, it is likely to target the resistance levels 85.63, 87.72, and 91.63.
US30:
If the pivot point of 38,181 for the Dow is broken, there is a possibility that it will target the support levels 37,988, 37,718 and 37,525. If it exceeds the pivot point, it is likely to target the resistance levels 38,451, 38,644, and 38, 914.
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Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.