US February PCE rates in the epicenter

The USD edged lower against its counterparts yesterday yet we still consider it as dominant in the FX market. After the release of the final US GDP rate for Q4 24, verifying the estimate released last month, we still view the growth rate of the US economy, as rather healthy if compared to other major economies. On a macroeconomic level, the USD is facing its next big test in today’s early American session, as the US PCE rates are to be released for February. The rates are the Fed’s favorite inflation metric and a possible acceleration could enhance the bank’s worries for further rate cuts thus providing support for the USD and vice versa. On a monetary level, we note comments by Fed policymakers stressing the possibility of an inflationary effect in the US economy by US President Trump’s tariff intentions. Hence, we note Fed policymakers Barr and Bostic, who are to speak today, and any hawkish comments could provide support for the greenback.

USD/JPY yesterday edged higher yet failed to put the 151.35 (R1) resistance line to the test, correcting lower during today’s Asian session. The upward trendline guiding the pair since the 11  of March remains intact, thus implying the continuance of the bullish outlook. Yet the RSI indicator remains just above the reading of 50, implying that the bullish predisposition of the market for the pair is still at low levels. Thus for a continuation of the bullish outlook, we would require the pair to break the 151.35 (R1) line clearly and start aiming for the 154.65 (R2) resistance level. For a bearish outlook, we would require the pair’s price action to break the prementioned upward trendline, signaling the interruption of the upward motion continue to break the 148.65 (S1) support line and start aiming for the 145.90 (S2) base.   

In Monday’s Asian session, we note the release of China’s NBS PMI figures for March. We focus on the manufacturing sector reading and a rise of the indicator’s reading could imply a faster expansion of economic activity for the sector in a positive signal given also the recent additional tariffs applied on Chinese products entering the US. Such a scenario could provide support for the CNH, especially should the rise be beyond expectations, while it could ease market worries somewhat and provide also support for AUD, given the Australian exports of raw materials to China’s manufacturing sector.         

AUD/USD remained in a tight sideways motion over the past few days, well between the 0.6410 (R1) resistance line and the 0.6170 (S1) support level. We maintain our bias for the sideways motion to continue as long as the pair’s price action continues to respect the upper and lower boundary of the current sideways channel confining the price action. We also note that the RSI indicator continues to run along the reading of 50, implying a rather indecisive market, while the Bollinger bands have narrowed implying less volatility, with both indicators action suggesting a possible continuation of the sideways motion. For a bearish outlook, we would require the AUD/USD’s price action to break the 0.6170 (S1) support line, which held its ground against downward pressure in October 22 and start aiming for the 0.5980 (S2) level. For a bullish outlook we would require the pair to break the 0.6410 (R1) line and thus pave the way for the 0.6665 (R2) resistance hurdle.      

دیگر نکات مهم امروز:

Today we get in the European session, Germany’s GfK consumer sentiment for April, UK’s GDP rate for Q4 and retail sales for February, Sweden’s retail sales for February, France’s preliminary HICP rate for March, Switzerland’s KOF indicator for March, Euro Zone’s business climate and economic sentiment for March, while on the monetary front please note that ECB Vice President De Guindos speaks. In the American session, we get from the US the consumption rate and the final UoM consumer sentiment for March, and Fed Board Governor Barr and Atlanta Fed President Bostic speak, while from Canada we get the GDP rate for January. On Monday’s Asian session, we get from Japan February’s preliminary industrial output rate.      

USD/JPY Daily Chart

• Support: 148.65 (S1), 145.90 (S2), 141.75 (S3)
• Resistance: 151.35 (R1), 154.65 (R2), 158.45 (R3)

نمودار چهار ساعته دلار استرالیا به دلار آمریکا

• Support: 0.6170 (S1), 0.5980 (S2), 0.5700 (S3)
• Resistance: 0.6410 (R1), 0.6665 (R2), 0.6940 (R3)

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