RBA’s minutes due out

As the week begins the USD seems to stabilize somewhat after its drop on Friday, yet overall data pointing towards a rather tight employment market and stubborn inflationary pressures may keep it supported. Fed policymakers tended to maintain their hawkish tone on Friday with Richmond Fed President Barkin stating that he favors steady 25 basis points rate hikes, while Fed Board Governor Bowman stated that inflation remains “much too high” and the Fed has to continue hiking rates. Across the world we note that during tomorrow’s Asian session, RBA’s last meeting minutes are to be released and should the document be characterized by a hawkish tone, we may see the Aussie getting some support. In the UK the pound was supported as January’s retail sales growth rate accelerated beyond market expectations showing growth again and implying that the average UK consumer is willing and able to actually spend more in the UK economy. Overall, it’s expected to be an easy-going Monday with fundamentals taking the lead in shaping the market’s mood, given that the number of high-impact financial releases is reduced. 

GBP/USD bounced on the 1.1925 (S1) support line and stabilized between the 1.2115 (R1) resistance line and the 1.1925 (S1) support line. Given that the downward trendline guiding GBP/USD has been broken and that the RSI indicator seems to be running along the reading of 50, we tend to maintain a bias for the sideways motion to continue. Should the bulls take over, we may see GBP/USD breaking the 1.2115 (R1) resistance line aiming for the 1.2270 (R2) resistance level. Should the bears take over, we may see cable breaking the 1.1925 (S1) support line and aiming for the 1.1740 (S2) support barrier.

AUD/USD edged higher and just broke above the 0.6900 (S1) resistance line, now turned to support. We tend to maintain a bias for a sideways motion for now, given that the pair has broken the downward trendline guiding it and the RSI indicator is at the reading of 50. Should a selling interest be expressed by the market, we may see the pair breaking the 0.6900 (S1) support line and aiming for the 0.6800 (S2) support level. Should the buyers be in charge, we may see the pair aiming if not breaching the 0.7010 (R2) level.

Other highlights for the day:

Today we note Sweden’s CPI rates for January and Eurozone’s preliminary consumer confidence indicator for February and also that BoE Deputy Governor Woods is scheduled to speak. During Tuesday’s Asian session, we note the release of Australia’s and Japan’s preliminary PMI figures for February.

As for the rest of the week

On Tuesday we highlight the release of the preliminary PMI figures of France, Germany, the Eurozone as a whole, the UK and the US while we also note the release of Germany’s ZEW indicators for February and we highlight Canada’s CPI rates for January, while we also note the release of New Zealand’s trade data for the same month. On Wednesday we note the release of Australia’s wage price index for Q4, and from Germany, we get the Ifo indicators and the preliminary HICP rate, both being for February, while on the monetary front, we note from the US the release of the Fed’s last meeting minutes. On Thursday we note the release of Australia’s capital expenditure growth rate for Q4, UK’s CBI distributive trades indicator for February, Canada’s business barometer for February, the US weekly initial jobless claims figure and highlight the second release of the US GDP rate for Q4 and on a monetary level, we note from Turkey CBT’s interest rate decision. Finally on Friday, we highlight Japan’s CPI rates for January and also note the release of Germany’s forward-looking GfK consumer sentiment for March, UK’s CBI trends for industrial orders for February and from the US the consumption rate for January, the Core PCE Price index for the same month and February’s final University of Michigan consumer sentiment indicator.

GBP/USD H4 Chart

Support: 1.1925 (S1), 1.1740 (S2), 1.1565 (S3)

Resistance: 1.2115 (R1), 1.2270 (R2), 1.2465 (R3)

AUD/USD H4 Chart

Support: 0.6900 (S1), 0.6800 (S2), 0.6720 (S3)

Resistance: 0.7010 (R1), 0.7125 (R2), 0.7265 (R3)

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