Brexit talks are still keeping pound traders on edge, but are we about to see bigger moves on month-end profit-taking?
Before moving on, ICYMI, yesterday’s watchlist looked at a double bottom formation on EUR/USD. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Japanese preliminary industrial production sank 4.6% m/m vs. estimated 2.9% decline in Jan, largest fall in eight monthsJapan’s retail sales popped 6.3% higher y/y vs. projected 4.2% gain and previous 3.8% reading
Crude oil edges higher on stronger signs of a rebound in China such as increased flight schedules and road congestion
New Zealand ANZ business confidence index improved from -52.0 to -43.3 to reflect reduced pessimism
Australian Q4 current account surplus widened from 0.8B AUD to 14.1B AUD on stronger trade performance
Australia’s private sector credit advanced by 0.4% m/m vs. projected 0.3% uptick in Jan
Australian January retail sales rebounded by 1.9% m/m vs. 1.6% forecast and previous 4.0% slump
Japanese housing starts surged by 6.6% y/y vs. estimated 1.0% gain and previous 1.7% drop
German import prices fell 1.2% m/m in Jan vs. projected 1.5% decline, up 6.6% y/y in Jan
French consumer spending surged 1.5% m/m in Jan vs. estimated 0.3% uptick
French economy expanded by another 0.1% q/q as expected in Q4 2022
Swiss GDP stayed flat in Q4 2022 vs. estimated 0.2% q/q growth
Swiss KOF economic barometer improved from 97.4 to 100.0 vs. 97.9 forecast in Feb
Spanish flash CPI jumped from 5.9% to 6.1% y/y in Feb vs. expectations of no change
ECB official Lane: Central bank has started to win the inflation fight
Price Action News
Major forex pairs were stuck in ranges, as market players are likely holding out for bigger market catalysts.
After spending most of the previous trading sessions stuck in consolidation, JPY pairs broke out sharply late in the Asian session as traders priced in the possibility of extended BOJ easing.
The lower-yielding currency made fresh intraday lows, most notably against the euro and pound as European bond yields jumped higher on another set of upbeat data.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canadian GDP at 1:30 pm GMT
U.S. CB consumer confidence index at 3:00 pm GMT
Richmond manufacturing index at 3:00 pm GMT
Australian CPI at 12:30 am GMT (Mar. 1)
Australian GDP at 12:30 am GMT (Mar. 1)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
Technical Chart of the Day: GBP/USD
Uncertainty surrounding Brexit talks on Norther Ireland have been rattling the pound since the start of the week.
But can improved sentiment in the European region be enough to keep Cable supported?Don’t forget that the pair already broke above its short-term descending trend line to hint that a reversal from the slide is underway.
Technical indicators such as the moving averages and Stochastic also appear to be in favor of more gains, as the 100 SMA crossed above the 200 SMA while the oscillator is pulling higher.
I’d look out for signs of a bounce around the retracement levels, particularly the 50% Fib near the 200 SMA dynamic support and 1.2000 major psychological mark.
A bit more volatility could kick in right around the release of the U.S. CB consumer confidence figure, as improvements are eyed.
Just make sure you watch out for profit-taking from dollar rallies once traders start closing their positions for February!