<p style=““ class=“text-align-justify“>Interest rate futures are pricing in a roughly 96% chance for a 25 bps move for the next BOE policy meeting in March. I would say that is pretty much what one should expect especially after the February decision <a target=“_blank“ href=“https://www.forexlive.com/centralbank/boe-raises-bank-rate-by-50-bps-to-400-as-expected-20230202/“ target=“_blank“ rel=“follow“>here</a>. The pound may be looking upbeat with cable rising above 1.2100 so far on the session but that owes a little to a slight near-term release as noted <a target=“_blank“ href=“https://www.forexlive.com/news/sterling-jumps-after-upbeat-uk-pmi-data-20230221/“ target=“_blank“ rel=“follow“>here</a>. In the bigger picture, I would say the data today changes nothing about the BOE outlook – for the most part.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior -17</li></ul><p style=““ class=“text-align-justify“>UK factory output and orders fell in February, with the latter dropping to its lowest since September 2020. The balance of new orders i.e. headline reading rose slightly but remains firmly in negative territory. CBI notes that:</p><p style=““ class=“text-align-justify“>“Conditions in manufacturing remain challenging, with output disappointing and order books having thinned out since late last year. However, if growth is going to return to the sector on a sustainable basis, then manufacturers need more than the boost some will receive from lower energy prices over the winter season.“</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>If US will conduct nuclear tests, we will do the same</li><li>We do not withdraw from the treaty, but are suspending our participation in it</li></ul><p style=““ class=“text-align-justify“>For some context, the strategic offensive arms treaty served to limit both Russia and the US‘ nuclear arsenals. This has been in force since 2011, or at least that is the case by name and on paper.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that the price failed to break the <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>triangle</a> last week. The price found
sellers at the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 1.3520. USD/CAD is one of the
ugliest major pairs in terms of price action as it’s been ranging for a long
time now. This is a signal of uncertainty and strength of both currencies. </p><p>The USD is supported by a
repricing higher in interest rates expectations and the CAD has been doing good
thanks also to high oil prices. Buyers will need a clear breakout to the upside
to start piling in and target the top of the triangle at 1.3950. On the other
hand, sellers will need a breakout to the downside to target lower lows.</p><p>On the 4 hour chart below, we can
see more closely the rangebound price action that’s been going on for over a
month now. We have the tight range between the resistance at 1.3450 and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 1.3350 with the high at
1.3520 and the low at 1.3265. </p><p>If the price falls back into the
range, then we should expect a further fall to the support at 1.3350. As of
now, the resistance of the range at 1.3450 turned support and may be the area
where buyers will pile in to retry another breakout of the triangle. </p><p>On the 1 hour chart below, we can
see that after bouncing from the resistance turned support at 1.3450, the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> switched to a bullish bias. This signals that the buyers are in control
for now and they should fold only if the moving averages turn bearish and the
price falls back into the range. </p><p>We have <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>US PMIs today</a> and given that good news is bad
news now for risk sentiment, we may see the USD being bid in case the PMIs
surprise to the upside. Anyway, the breakouts of the key technical levels
mentioned previously will give the direction.</p>

This article was written by ForexLive at www.forexlive.com.

<ul><li>But core inflation to only decline tentatively in the coming months</li><li>Short-term outlook for Germany more favourable than a few months ago</li><li>Economic outlook somewhat brighter but high inflation pressures still persisting</li></ul><p style=““ class=“text-align-justify“>We’ll see how wage dynamics influence the inflation outlook in the months ahead but if price pressures are more sticky than anticipated, that will continue to cast a dark cloud on the German economy this year.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>There is no doubt that the US has been vocal in pledging their support towards Ukraine since the whole conflict with Russia began a year ago. However, the timing of Biden’s visit today, while fitting with the occasion, may perhaps be a case of sending a message to the opposition. And no, the opposition isn’t Russia.</p><p style=““ class=“text-align-justify“>It may be a case of killing two birds with one stone since Biden’s surprise trip to Kyiv comes as top Chinese diplomat, Wang Yi, is due in Moscow and possibly for a meeting with Russian president, Vladimir Putin. The visit is said to be one to „discuss ideas for peace in Ukraine“ but we all know that it is very much a show of support from China towards Russia on the matter.</p><p style=““ class=“text-align-justify“>Considering how US-China relations are suffering greatly amid the whole balloon fiasco over the past few weeks, one can definitely argue how the gesture from both sides are hardly coincidental. </p><p style=““ class=“text-align-justify“>And while the conflict between Ukraine and Russia is a different ordeal, the fact that the US and China are ending up on opposing sides would serve to only deepen the divide between the two at the moment.</p><p style=““ class=“text-align-justify“>This was definitely the perfect opportunity to highlight that contrast, I would say.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>Just a heads up as Lagarde herself is tweeting on the appearance, which will be on Finnish television. More on that here:</p><blockquote class=“twitter-tweet“ data-partner=“tweetdeck“><p lang=“en“ dir=“ltr“>What we do <a target=“_blank“ href=“https://twitter.com/ecb?ref_src=twsrc%5Etfw“>@ecb</a> affects people throughout the euro area from Faro to Nuorgam, from Galway to Thessaloniki. Your views and concerns matter in the decisions we make. Watch from 20:00 CET on Tuesday as I answer questions from the Finnish public on Yle TV1 <a target=“_blank“ href=“https://t.co/CfuOGjjxAZ“>https://t.co/CfuOGjjxAZ</a> <a target=“_blank“ href=“https://t.co/Nh3KXiusGm“>pic.twitter.com/Nh3KXiusGm</a></p>— Christine Lagarde (@Lagarde) <a target=“_blank“ href=“https://twitter.com/Lagarde/status/1627615256120901632?ref_src=twsrc%5Etfw“>February 20, 2023</a></blockquote>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>If you recall how trading went last week, it was a case of markets struggling with what to do in the aftermath of the US CPI data. However, the bond market was steadfast as sellers continued to push their agenda and yields moved higher. Eventually, the rest of the market listened and on Friday, it looked like we were on the verge of a trending break.</p><p style=““ class=“text-align-justify“>However, that all turned around when 10-year Treasury yields failed to seal a break above its December high of 3.90% and reversed lower before the end of the day:</p><p style=““ class=“text-align-justify“>As that played out, the dollar also saw gains dissipate and failed to clinch any major technical breaks as outlined earlier <a target=“_blank“ href=“https://www.forexlive.com/news/close-but-no-cigar-for-the-dollar-20230220/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>Going back to the bond market, it has been a tricky start to the year with January observing a rally in bonds only for that to completely falter in February. That is a sign that traders are struggling to find a balance on the Fed outlook and how much higher rates might possibly go in the months ahead.</p><p style=““ class=“text-align-justify“>However, the good news is that the technical battle lines are quite well defined at the moment. The December high at 3.90% will be a key topside level to watch for 10-year yields in the US with the downside level to keep an eye out for being the 200-day moving average (green line) and the recent lows so far this year closer to 3.32% to 3.33%.</p><p style=““ class=“text-align-justify“>If we get a break on either side of that, expect other assets to also respond in kind to what the bond market has to say.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that the Dow hasn’t done much since the end of last year. Recently, the
price got even stuck in a tight range between the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 34477 and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 33538. </p><p>The bias is turning more bearish
as the hot economic data is making the market to rethink its expectations about
earlier than expected pause in interest rates hikes and cuts by the end of this
year. In fact, the market now sees a higher terminal rate with almost no cuts
in 2023. </p><p>On the 4 hour chart below, we can
see more closely the current rangebound price action with the support at 33538
holding pretty well. This is the worst environment for traders as one can be
chopped out pretty easily on both sides. The best strategy would be to wait for
a clear breakout on either side before taking any position. </p><p>In the 1 hour chart below, we can
see that the price bounce from the support and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> are now pointing north. This may be a signal that the price can move up
again towards the resistance, but the recent catalysts are all bearish for the
market. If one wants to “play the range” then buying at support and selling at
resistance with defined risk is the only way to go for now. </p>

This article was written by ForexLive at www.forexlive.com.

<p>CNBCs Steve Leesman, commenting on the markets said on Friday, „If you are not confused, you’re not paying attention“.

There is a lot of confusion in the market, and even at the Fed. The CPI inflation released this week, added some added confusion as it was a little more hefty than recent months. There still is some hope, however, the the shelter component saves the day.

The impact is for volatile, up and down markets. When the markets are like that, technicals help to take some of the uncertainty out of the price action.</p><ul><li>EURUSD, 7:20</li><li>USDJPY, 12:20 </li><li>GBPUSD, 16:00</li><li>USDCHF, 18:55</li><li>USDCAD, 22:05</li><li>AUDUSD, 24:42</li><li>NZDUSD 26:58</li></ul>

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