Important Data and Economic Events Today:
Australia: Unemployment rose by 0.1% to 5.6% with participation rate rising 0.1% to 65.7%. Employment rose by 17,500.
France: GDP Report Q4 will be released at 7:45 GMT, along with the Business Climate Report. PMI reports will be issued.
Euro Zone: The current account balance report for January will be released at 8:00 GMT, followed by the PMI report at 9:00 GMT.
Germany: FOMC Reports will be released at 8:30 GMT, followed by the IFO Survey Report at 9:00 GMT.
UK: Retail Sales Report will be released at 9:30 GMT, followed by Bank of England decision at 12:00 GMT.
US: The weekly Unemployment Claims Report will be released at 12:30 GMT, followed by the Home Prices Report at 13:00 GMT and the surprise PMI at 13:45 GMT. EIA will release its weekly Inventory Report at 14:30 GMT. The Manufacturing Report in Kansas will be released at 15:00 GMT.
Japan: Inflation Reports will be released at 23:30 GMT.
The Euro rose during the Asian Session for the second day in a row on the back of Dollar’s decline. The Euro hit its highest level since the beginning of the week ahead of Industrial and Service Data from the EuroZone.
The FOMC Reports offered evidence for a both a hawkish and dovish tilt. On the hawkish side, the Fed indicated that it plans to lift rates slightly faster next year, and policy makers were close to penciling in a fourth hike this year.
On the dovish side, the Fed indicated that it is willing to tolerate inflation that runs above its 2% annual target and he noted that economic growth appears to have moderated from late last year. The comments however, pushed the Dollar lower.
Despite recent gains, the EURUSD pair still has to break above the resistance at 1.2360 to confirm a continued uptrend. A drop below support at 1.2340 would affect the recent uptrend and introduce a sideways trend.
The Sterling fluctuated during the Asian session on Thursday against the US Dollar on a bearish range, indicating a kind of correction after yesterday’s gains, which also coincided with the release of Economic Data from the UK.
The UK Labor Market Data showed a decrease in Unemployment Rate for the three month period from January to 4.3% from the previous reading of 4.4%, while the average Income Index accelerated to 2.8% as against 2.7%.
The GBPUSD pair’s success in breaching near resistance levels at 1.4170 has boosted optimism and pushed the price test to 1.4200 levels. A price reversal however, below 1.4120 support level would temporarily ease this bias.
The US Dollar weakened against the Yen in Asian trading on Thursday, after the strong declines seen yesterday following the Federal Reserve Rate Hike on Wednesday, and further expectations of at least two more increases before the year runs out. The Feds also showed confidence that Tax Cuts and Government Spending will boost the Economy and Inflation.
Japanese Government Bonds rose on Thursday after the Manufacturing PMI fell to a nine-month low in February. Technically, the return of selling pressures on the pair’s movement will reinforce the previous bearish trend. A break below the support levels near 105.60 will consolidate the declines and likely cause a test at the 105.25 levels. A price reversal above the resistance level at 105.80 would however, temporarily ease selling pressure.
Gold prices fell on Thursday after hitting a two-week high of 2% yesterday, as the US Dollar fell against major currencies as the Federal Reserve raised interest rates by a quarter percentage point to match expectations yesterday.
The US Dollar having hit a four-week low, helped Gold prices rise to a two-week high, while the yield on US 10-year Bonds fell after hitting a four-week high.
Technically, on the near term, we anticipate a definite breach in the pivotal resistance of 1330, in order to confirm a reversal toward the upside, thus achieving positive targets starting at 1336. A break however, of the support level at 1326 will push the price back to the downside correction track and possibly hit the support level of 1320