Week Ahead 12th-16th February

• Mon: BoC SLOS, Indian CPI (Jan), Export/Imports (Jan), Holiday: China (New Year), Hong Kong, Tokyo
• Tue: OPEC MOMR, Swedish Unemployment (Jan), UK Unemployment/Wages (Dec), Swiss CPI (Jan), EZ/German ZEW (Feb), US CPI (Jan), NFIB (Jan). Holiday: China (New Year), Hong Kong
• Wed: Indonesian Presidential Election, UK CPI (Jan), Norwegian GDP (Dec), EZ Employment (Q4), Japanese GDP (Q4), Holiday: China (Spring Festival)
• Thu: IEA OMR, Australian Employment (Jan), UK GDP (Dec/Q4), EZ Trade (Dec), US Import/Export Prices (Jan), IJC (w/e 10th Feb), Philadelphia Fed (Feb), Retail Sales (Jan), Industrial Production (Jan), Business Inventories (Dec), New Zealand Manufacturing PMI (Jan), Holiday: China (Spring Festival)
• Fri: CBR Policy Announcement, UK Retail Sales (Jan), German WPI (Jan), US Building Permits/Housing Starts (Jan), Uni. of Michigan Prelim. (Feb), Holiday: China (Spring Festival)

Note: Previews are listed in day order

UK Employment/Wages (Tue)

Expectations are for the unemployment rate in the 3-month period to December to come in at 4.0% with headline wage growth in the 3M/YY in the same period seen declining to 5.8% from 6.5%, while the ex-bonus metric is seen cooling to 6.0% from 6.6%. The prior release saw the unemployment rate hold steady at 4.2%. However, since then, as part of the ONS’ Labour Force Survey re-weighting, the unemployment rate in the 3-month period to November is now estimated at 3.9%. On the wages front, headline earnings growth slowed to 6.5% from 7.2%, and the ex-bonus metric slipped to 6.6% from 7.2%. Note, the upcoming release will see the ONS resume publishing its Labor Force Survey. Analysts at Investec notes, however, that data “provided so far are still based on a smaller-than-desired sample of responses,” adding that efforts by the ONS will take time to filter through. As such, markets will remain sceptical over the reliability of the data. Investec thinks employment could contract in December by circa 33k, and wonders whether weaker activity data in H2 was factored into hiring decisions. Note, the earnings metrics will not be subject to methodological changes and will therefore likely take greater precedence, particularly given the emphasis on the data by MPC members. On which, Investec suggests that declines in Y/Y growth will primarily reflect base effects.

Swiss CPI (Tue)

SNB Chairman Jordan has noted that while he expects inflation to increase given VAT, rents and electricity, it should not surpass the 2.0% mark. Alongside acknowledging the likely short-term increase, Jordan emphasised that inflationary pressures are declining. The January release does not include an update to the quarterly rental price index, which will next be published alongside February’s inflation number. The last print (Dec.) was hotter than expected at 1.7% and a slight surprise against the SNB’s forecast for a 1.6% Q4 average. January’s metrics will be closely watched and given the guidance from Jordan outlined above, a significant uptick, particularly if it occurs before the Feb. rental data, may well spark a hawkish reaction given the SNB’s unwillingness to allow CPI to deviate from the 0-2% band. Albeit, this will need to be assessed in the context that any increase is expected to be short-term and comes in the context of a broader cooling in Swiss inflation thus far. Furthermore, traders will also be mindful of recent marked CHF action and speculation that the SNB could act to offset some of the currency strength

US CPI (Tue)

The consensus view looks for headline CPI to rise +0.2% M/M in January (prev. +0.2%), and the core CPI measure is seen rising +0.3% M/M, matching the rate seen in December. As always, the data will be framed in the context of the Fed’s policy function, where traders see lower inflation readings as a sign that the central bank could begin cutting rates, while any pickup in price pressures would see traders wager on a ‚higher for longer‘ playbook. Fed Chair Powell recently welcomed the notable easing of inflation, but reiterated that officials were attentive to risks that it posed to both sides of its mandate, and that ongoing progress was ’not assured‘. Powell warned that reducing policy restraint too soon or too much risked reversing the progress on inflation, and said officials wanted greater confidence that inflation was moving down sustainably (though he has conceded that if inflation were to move back up, that would be a surprise). Powell declined to offer a number of months that low inflation was needed to achieve this confidence.

RBNZ Inflation Expectations Survey (Tue)

Traders will focus on the Survey of Expectations (SoE) ahead of the 28th February RBNZ confab and in the context of ANZ’s recent call change – in which it forecasts 25bps hikes in both February and April taking the OCR to 6%, citing that the RBNZ may not be feeling like they’ve done enough to meet their inflation mandate. On the upcoming SoE release, ANZ suggests the metrics are likely to decline further, but any increase in the long-term measure would be a red flag. The prior Survey of Expectations (released in November) saw expectations for annual inflation one-year-ahead fall 57bps, from 4.17% to 3.60%, and two-year-ahead inflation expectations decreased 7bps from 2.83% to 2.76%, respectively. However, the mean five-year-ahead annual inflation expectation was 2.43%, an increase of 18bps from the prior quarter’s mean estimate of 2.25%, and the mean ten-year-ahead annual inflation expectation increased by 6bps to 2.28% from 2.22% in the previous quarter. Analysts at Westpac meanwhile suggest “With headline inflation dropping back, we expect that the slide in shorter term inflation expectations seen in recent months will continue in the RBNZ’s latest Survey of Expectations. That includes a fall in the closely watched survey of inflation 2 years ahead”, but the desk also says the importance of this particular measure has waned over time but softening in expectations will nonetheless be welcomed.

UK CPI (Wed)

Expectations are for the headline annual rate of CPI to rise to 4.2% Y/Y from 4.0%, with the core rate expected to cool to 5.0% Y/Y from 5.1%. The prior release saw an unexpected uptick in inflation with headline Y/Y CPI advancing to 4.0% from 3.8% while the All Services metric ticked higher to 6.4% Y/Y from 6.3%. The ONS noted that “the increase in the annual rate was largely the result of the increase in tobacco duty.” For the upcoming release, Pantheon Macroeconomics highlights the likely role played by base effects which will disrupt the recent run of downside surprises relative to MPC expectations. This is also expected to be visible in the service print, which it expects to rise to 6.9% Y/Y from 6.4%. Such an outturn would likely prompt further scepticism over imminent rate cuts by the MPC and push back market pricing which fully prices a first 25bps reduction in August, with 75bps of easing seen by year-end. That being said, one reason for optimism could come via food inflation which Pantheon expects to fall sharply in January.

Japanese GDP (Wed)

Q4 GDP Q/Q is expected at +0.3% (prev. -0.7%; range -0.1% to +0.9%), with the Annualised Q/Q seen at +1.4% (prev. -2.9%; range -0.3% to +3.7%), Private Consumption Q/Q at +0.1% (prev. -0.2%; range -0.4% to +0.3%), Capital Expenditures Q/Q at +0.3% (prev. -0.4%; range -0.2% to +1.3%), and External Demand Q/Q at +0.3% (prev. -0.1%; range 0 – 0.8%). Desks suggest any rebound in Q4 GDP should be modest based on recent data, whereby Industrial Production rose but missed expectations, whilst Retail Sales also unexpectedly declined, although the chip cycle and vehicle demand should support growth, according to some analysts. Analysts at ING said, “The gains in manufacturing output suggest 4Q23 GDP rebounded (0.3% Q/Q s.a.) from a mild contraction in 3Q23 (-0.7%), with the risk skewed to the upside.” The desk suggests that weak retail sales should be the main drag on overall growth, whilst “households’ cautious consumption behaviour could further discourage the Bank of Japan from raising its policy rates.” BoJ’s Deputy Governor Uchida recently suggested the Bank will not aggressively hike rates even after ending negative rates and added that Japan’s real interest rate is in deep negative territory and monetary conditions are very accommodative – “we don’t expect this to change in a big way” Uchida said.

Australian Employment (Thu)

The January Employment Change is forecast to have seen the addition of 30k jobs (prev. -65.1k), with the forecast range between +10k to +55k, according to Reuters. The Unemployment Rate is expected to have ticked higher to 4.0% (prev. 3.9%), with the analyst expectation range between 3.8-4.0%. The participation rate is seen steady at 66.8% (forecast range 66.7-67.0%). Analysts note that conditions in the labour market softened heading into the end of 2023, and Westpac posits that “the underlying trend continues to speak to labour demand easing from a robust level.” The desk forecasts a below-market jobs addition of +15k, with the unemployment rate at 4.0% and participation at 66.8%. Westpac however warns that “January’s data should be interpreted carefully, given the risk that one–off dynamics may cause large swings in hours worked or unemployment”, with the desk highlighting two dynamics that have played a significant role in labour market outcomes since the COVID reopening. The first dynamic being more opportunities to change jobs resulting in an “unexpected lift in the number of people who were not working but had a job lined up after the holidays”, and the second dynamic is the tourism recovery which has seen a greater number people take leave over the holidays.

UK GDP (Thu)

Expectations are for flat growth in the December GDP report. The prior release saw growth in November expand by 0.3% vs the 0.3% contraction in the prior month. Pantheon Macroeconomics notes that “output rebounded in consumer-facing sectors after spending in October was adversely affected by Storm Babet and the later-than-usual timing of school holidays in some areas” For the upcoming release, Pantheon (forecasts -0.3% M/M) says the report “will create a negative first impression, but the reality is the economy is now on the up.” If Pantheon’s forecast is realised, the consultancy suggests that it would contribute to a 0.1% Q/Q decline. Such an outcome would put the UK in a mild recession. However, given the shallowness of such a decline, it would be regarded in some quarters as something closer to “stagnation”. Although a 0.1% print would be below the MPC’s forecast of a flat reading, greater attention next week will likely instead be placed on CPI and wage metrics.

US Retail Sales (Thu)

Retail sales are expected to rise 0.2% M/M in January (prev. +0.6%), and the ex-autos measure is also seen rising +0.2% M/M (prev. +0.4%). Bank of America’s Consumer Checkpoint release for February showed consumer spending softening in January, with total card spending per household -0.2% Y/Y (prev. +0.2% Y/Y), and on a seasonally adjusted basis, its data suggests household spending -0.3% M/M. BofA says weather factors were largely to blame for the weakness, noting that when the weather was better, spending was resilient. It also said that in the later part of the month, total card spending per household rebounded across the country. „Despite the freeze, consumer confidence has rebounded as of late,“ it writes, „it does, however, remain relatively weak given the consumer has been resilient over the last year and the labour market has been solid.“ BofA says ’sticker shock‘ could explain that dynamic. Ahead, „as the rate of inflation comes down, this sticker shock should begin to fade, particularly as after-tax wages and salaries growth remains healthy for low and middle-income households in our data,“ adding that „consumers‘ savings buffers remain elevated and Bank of America’s latest Participant Pulse shows no significant sign that people are tapping into their longer-term retirement savings.“

UK Retail Sales (Fri)

Expectations are for headline retail sales to advance to 1.0% M/M in January from the 3.2% contraction in December. In terms of recent retail indicators, BRC’s retail sales indicator rose 1.4% Y/Y, with the accompanying report noting “easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month.” Elsewhere, the Barclaycard Consumer Spending report stated “overall retail spending grew 1.7% in January 2023, an uplift compared to the year-on-year growth of 0.6% in December 2023. This increase was predominantly driven by a rise in spend growth at supermarkets, which saw an uplift compared to December as consumers returned to their regular grocery shopping routines after the Christmas break.”

This article originally appeared on Newsquawk.

This article was written by Newsquawk Analysis at www.forexlive.com.

• Broader indices plow forward. Record close for S&P and first close above 5000.
• Crude oil settles at $76.84,
• Fed’s Logan: Labor market is very tight but loosening
• Fed’s Bostic: Inflation has been too high for too long
• European equity close: A double doji on the weekly
• More on the US CPI revisions
• Kickstart your FX trading with a detailed technical look at the EURUSD, USDJPY & GBPUSD.
• US Treasury yields fall on CPI revisions, then rebound
• US benchmark CPI revisions: December CPI revised to +0.2% from +0.3%
• Canada January employment 37.3K versus 15.0K estimate
• The NZD is the strongest and the CHF is the weakest as the NA session begins
• ECB Publishes Paper on Forward-looking Trackers of Negotiated Wages
• Next Week’s Key Economic Events

The USD is ending the session lower to end the trading week with most of the declines coming vs the AUD and the NZD. Overnight, ANZ reported that is now predicts that the Reserve Bank of New Zealand (RBNZ) will increase the Official Cash Rate (OCR) by 25 basis points in both February and April, bringing it to a total of 6%, which deviates from the consensus view. This forecast is based on a series of small, but unwelcome surprises in economic data, leading ANZ to believe that the RBNZ will not feel confident that it has sufficiently met its inflation targets. The OCR is currently at 5.5%, and while the market is largely expecting the RBNZ to maintain rates in the upcoming February meeting, with a 90% anticipation of a hold decision, ANZ stands out by anticipating rate hikes in both the February 28 and April 10 meetings.

That news helped to propel the NZDUSD to a near 1% gain on the day. The AUDUSD moved up 0.54%. The USD was mixed vs the other currencies in a subdued up and down trading session in the US. Overall, for the day, the NZD was the strongest of the major currencies while the CHF was the weakest.

In the session today, the Canada employment data showed a gain of 37.6K but all the gain was in part time jobs. Full time jobs fell by -11.6K. The unemployment rate did fall to 5.7% from 5.8% last month. The USDCAD ended the day little changed in up and down trading.

There were no US economic data today. However, there was some additional Fed talk from Fed’s Logan and Bostic.

Fed’s Logan emphasized that the labor market remains very tight, although there are signs of loosening, signaling a nuanced view of current economic conditions. She acknowledged significant progress made on inflation but noted that further efforts are necessary to fully address it. Logan advocated for a careful and data-driven approach, suggesting there is no immediate urgency to adjust interest rates at this time. Her comments reflect a priority on building confidence in the long-term stability of inflation rates. While she noted that supply chains have largely normalized, Logan also acknowledged ongoing supply chain issues in certain industries, indicating these may need more time to resolve fully. She expressed a strong focus on monitoring potential risks that could undermine progress on inflation, highlighting the Fed’s vigilance in maintaining economic stability.

Fed’s Bostic, in a discussion with NPR, expressed concern that inflation has been excessively high for an extended period. He conveyed optimism about the United States being on track to regain its pre-pandemic economic vitality, emphasizing the importance of preventing a new surge in inflation. Bostic highlighted that current data indicate the potential for continued real wage gains over the next several months. He pointed out that businesses are primarily challenged by difficulties in finding employees and affordable housing. Furthermore, Bostic reassured that banks are aware of the risks present in their portfolios and are equipped to manage them effectively, suggesting a level of preparedness within the banking sector to navigate potential economic fluctuations.

For the trading week, the US dollar index rose 0.10% (DXY) but was mixed vs the major currencies. Looking at the major currencies, the USD was virtually unchanged vs the EUR and GBP, it was the strongest vs the CHF and the weakest vs the NZD:

• EUR, unchanged
• JPY, +0.65%
• GBP, unchanged
• CHF, +0.90%
• CAD, -0.02%
• AUD, -0.20%
• NZD, -1.49%

Today, yields were mixed with the shorter end higher, and the longer end lower.

• 2-year 4.484%, +2.8 basis points
• 5-year, 4.140%, +1.6 basis points
• 10-year, 4.177%, +0.7 basis points
• 30 year, 4.374%, -0.6 basis points

For the trading week, yields moved higher as the market started to dial back the number of tightening.

• 2 year, +11.4 basis points
• 5 year, +15.4 basis points
• 10 year, +15.3 basis points
• 30 year, +15.1 basis points

US stocks today continued it move to the upside with solid gains for the broader indices. The S&P index closed above the 5000 level for the first time ever. The Nasdaq index traded above 16K for the first time since November 2021. The S&P closed at a record level and although the Dow as lower today, it traded to record levels this week.

The final numbers are showing:

• Dow industrial average fell -54.64 points or -0.14% at 38671.70
• S&P rose 28.70 points or 0.57% at 5026.62
• Nasdaq rose 196.94 points or 1.25% at 15990.65

For the week, the major indices closed higher for the 5th week in a row after starting 2024 with a sharp decline in the 1st trading week of the year.

• Dow industrial average, rose 0.04%
• S&P rose 1.37%
• Nasdaq rose 2.31%

In other markets this week,

• Crude oil rose $4.26 or 5.89% to $76.54
• Gold fell -$15.02 or -0.74% to $2024.42
• Silver fell $0.08 or -0.34%
• Bitcoin surged by $4975 or 11.6% as risk on flows pushed the digital currency higher.

Next week US CPI will highlight the economic releases

Monday:

• BOE Gov. Bailey speaks

Tuesday:

• NZ inflation expectations
• UK Employment
• US CPI

Wednesday:

• UK CPI
• UK Gov. Bailey speaks

Thursday:

• AUD employment
• UK GDP
• US Retail Sales
• US unemployment claims

Friday:

• UK Retail sales
• US PPI
• US Michigan Consumer Sentiment.

On the earnings calendar next week, Shopify, Coca Cola, AIG, Cisco and Coinbase are companies of interest. The Big Daddy of perhaps the entire earnings season will be released on February 21, when Nvidia is scheduled to report. The fate of AI and Ai stocks rests with the chip supplier:

Tuesday:

• Shopify
• Coca Cola
• Marriott
• Lyft
• AIG

Wednesday:

• Kraft Heinz
• Albemarle
• Twillio
• Cisco

Thursday:

• John Deere
• Coinbase

Thank you for your support. Wishing you all a great weekend.

This article was written by Greg Michalowski at www.forexlive.com.

The broader US stock indices continued to plow forward with the S&P closing above 5K for the first time ever. The Nasdaq traded above 16K for the first time since November 2021 and is now within 67 points of a new all time high close.

The Dow did fall today but as Chevron, Disney and Caterpillar move lower.

The final numbers are showing:

• Dow industrial average fell -54.66 points or -0.14% at 38671.70
• S&P index rose 28.70 points or 0.57% at 5026.62
• NASDAQ index rose 196.94 points or 1.25% at 15990.65. It’s intraday high reached up to 16007.29. The all-time high closing level was at 16057.44.

The small-cap Russell 2000 rose 30.29 points or 1.53% to 2009.99.

For the trading week, each of the major indices rose for the fifth consecutive week:

• Dow Industrial Average eeked out a 0.04% gain for the week
• S&P index rose 1.37%
• NASDAQ index rose 2.31%

The small-cap Russell 2000 rose 2.4079%.

For 2024:

• Dow Industrial Average 2.61%
• S&P index is up 5.38%
• NASDAQ index is up 6.52%

The Russell 2000 is down -0.842%.

Happy days are here again….

This article was written by Greg Michalowski at www.forexlive.com.

The price of oil is settling at $76.84. That is up $0.62 or 0.81% on the day. The high price reached $77.29. The low price was at $75.93.

For the trading week, the prices soared 6.27% which comes after a -7.35% decline last week, and a 6.5% rise the week before. So price action has been up-and-down over the last few trading weeks.

Looking at the weekly chart, the price low dipped below its 200-week moving average at $72.04. Looking at the chart below, the last 10 trading weeks has been skimming along that 200-week moving average with six of the 10 weeks moving below the moving average intra-week. However, there have been no closes below that moving average – keeping the buyers in play technically.

This article was written by Greg Michalowski at www.forexlive.com.

• We have made tremendous progress on inflation, more work to do
• Need to take time to look at data
• Don’t see any urgency to adjust rates
• Need to build confidence on inflation
• Supply chains have pretty much normalized
• Some industries still have supply chain issues, may take time to heal
• Highly focused on possible risks to progress on inflation
• Some industries still have supply chain issues, may take some time to heal

This is right out of the Fed textbook right now. Everyone wants more time to see more data.

This article was written by Adam Button at www.forexlive.com.

• The US is on a pathway to get back to pre-pandemic economic strength, wants to avoid a new spike of inflation
• Data suggest real wage gains will continue for several more months
• Businesses say biggest challenges are finding employees and affordable housing
• Banks understand the risk on their books and are prepared to deal with them

This article was written by Adam Button at www.forexlive.com.

The
Japanese yen experienced significant growth at the end of 2023, appearing to
mark a long-awaited turning point as it broke away from the previous year’s
trend. The USD’s drop was easy to explain. However, following the New Year, the
situation took a sudden turn. Let’s delve into why the US dollar reclaimed its
position and what happened with the yen.

In
December, the yen was the preferred choice for bulls, which is pretty
understandable. In 2022 and 2023, the Japanese currency stood out among major
currencies because of its adherence to a negative interest rate policy. It’s an
exception to the rule, as you realize.

At the
end of 2023, it seemed like the turning point had been reached. The USD
to JPY rate saw a nearly 6% decrease in November and December.

The
chart above represents two key moments. The first one is linked to the
expectations that the Federal Reserve will initiate a rate-cutting cycle in
2024, potentially reducing interest rates at least three times. The second
reflects the expectations surrounding the Bank of Japan’s policy. Many experts
forecasted that the BoJ would abandon its negative rate approach. This
contrast allowed the yen to make an encouraging leap.

In 2024,
this movement should have been continued. But one month was enough for the US
dollar to recover the most losses.

To
understand the scale of the problem, take a look at the chart below, which
illustrates the USDJPY movements since the start of 2022. That’s what happened
to the currency, traditionally considered a safe haven alongside, for instance, the Swiss
franc.

The
chart above provides insight into why market participants anticipated changes
from the BoJ. However, it didn’t happen at the central bank’s January meeting.
The regulator also continued its yield curve control policy, maintaining a
1%-as-a-reference yield cap on 10-year government bonds. Plus, there was a
slight decrease in the inflation rate, diverting attention from the potential
rise in interest rates.

Another
factor affecting USD/JPY was the increase in retail sales data in the US.
Higher consumer spending allows the Fed to maintain higher interest rates.

After
all these developments, USD/JPY returned to roughly the same level as a few
months prior. In other words, investors still expect a potential interest
rate decrease by the Fed and a contrasting move by the BoJ. If so, perhaps it’s
an opportune moment to have faith in the yen.

As
you’re aware, the forex market situation can change rapidly, even within this
text. Hence, any decision should be based on your own analysis and opinion.

This article was written by FL Contributors at www.forexlive.com.

As traders gear up for the week ahead, there’s no shortage of important economic events on the horizon that could impact the market.

The week will kick off with bank holidays in Japan and China, marking National Foundation Day and the Spring Festival, respectively. These holidays may lead to subdued trading activity in the Asian markets, so traders’ attention will shift to other regions.

In the United Kingdom, the focus will be on Bank of England Governor Bailey’s speech at Loughborough University. His remarks could provide insights into the central bank’s monetary policy outlook.

On Tuesday, New Zealand will release inflation data, while the U.K. will unveil data on claimant count change, average earnings index and the unemployment rate. Additionally, Switzerland will publish its Consumer Price Index, and the eurozone will get the ZEW economic sentiment.

The most important event of the week will be the inflation data for the U.S., also expected on Tuesday.

Wednesday will see the U.K. releasing inflation figures.

Thursday Australia will publish the employment change and unemployment rate data, while the U.S. will get the retail sales figures, the Empire State Manufacturing Index and the unemployment claims.

Finally, on Friday, attention will shift back to the U.K. for retail sales data and to the U.S. for the Producer Price Index (PPI) m/m, as well as building permits, housing starts, preliminary University of Michigan consumer sentiment and inflation expectations figures.

This article was written by Gina Constantin at www.forexlive.com.

Yesterday,
the Nasdaq Composite increased further its gains following the better than
expected US
Jobless Claims as the market continues to be supported by the
goldilocks economy. There’s no notable event now until the US CPI report next
Tuesday, so it won’t be surprising if we start to see a pullback as some profit
taking into the data should be expected.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
broke the resistance at 15635
and rallied to new highs. The index is approaching the all-time high mark and
that’s certainly what the buyers are targeting at the moment. If we get a
bigger pullback from here, we can expect the buyers to lean on the trendline to
position for the all-time high. The sellers, on the other hand, will want to
see the price breaking below the trendline to invalidate the bullish setup and
position for a drop into the 14477 level.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
continues to diverge with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it should be a signal for a pullback at least into the
resistance now turned support at
15635. From a risk management perspective, the buyers shouldn’t chase this
rally and wait for a pullback to either the support or the trendline. The
sellers, on the other hand, will want to see some downside breaks before
stepping in and target new lower lows.

Nasdaq Composite
Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price action after the breakout has been choppy with weak momentum. This should
be a sign that the market is primed for a pullback. The buyers will step in
both at the 15635 support and the trendline, while the sellers will pile in at
every break lower.

This article was written by FL Contributors at www.forexlive.com.

USD

• The Fed left interest rates unchanged as
  expected while dropping the tightening bias in the statement but adding a
  slight pushback against a March rate
  cut.
• Fed Chair Powell stressed
  that they want to see more evidence of inflation falling back to target and
  that a rate cut in March is not their base case.
• The latest US GDP beat
  expectations by a big margin.
• The US PCE came
  mostly in line with expectations with the Core 3-month and 6-month annualised
  rates falling below the Fed’s 2% target.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  surprised to the upside with the new orders index, which is considered a
  leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
  expectations across the board with the employment sub-index erasing the prior
  drop and prices paid jumping above 60.
• The US Consumer
  Confidence report came in line with expectations but
  the labour market details improved considerably.
• The market now expects the first rate cut in May.

GBP

• The BoE left interest rates unchanged as expected at the last meeting
  removing the tightening bias but reaffirming that they will keep rates high for
  sufficiently long to return to the 2% target.
• The latest employment report showed job losses in December and
  lower than expected wage growth.
• The UK CPI beat expectations across the board, which gives
  the BoE a reason to remain patient.
• The latest UK PMIs showed the Manufacturing sector improving but
  remaining in contraction while the Services sector continues to expand.
• The latest UK Retail Sales missed expectations across the
  board by a big margin as consumer spending remains weak.
• The market expects the BoE to start
  cutting rates in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD broke
out of the range following the strong US NFP report and pulled back to retest
the support now turned resistance around
the 1.2612 level. The price was overstretched after the quick selloff as
depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. Here we got a pullback into the moving
average, and we can now expect the sellers to step in with a defined risk above
it to target a break below the 1.25 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we got a
reaction yesterday as the price sold off into the 1.2570 level but eventually
rebounded back into the resistance zone.
The buyers will want to see the price breaking above the recent high at 1.2642
to invalidate the bearish setup and position for a rally back into the top of
the range around the 1.28 handle.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the pair now consolidating right around
the resistance zone. If the price were to break below the minor support at
1.2605, we can expect the sellers to pile in to increase the bearish bets into
the 1.25 support. Conversely, a break above the 1.2642 level should lead to a
rally into new highs with the buyers increasing the bullish bets into the 1.28
handle.

This article was written by FL Contributors at www.forexlive.com.