Forex Signals Brief Feb 21: FED Minutes Unlikely to Give Much Today
Yesterday markets were very quiet, with the economic calendar being empty and the US being in observance of Presidents Day, which meant that it was a bank holiday. Consequently, the US stock, bond, and commodity markets remained closed for the day. In the FX market, the price movement was slow, with most assets trading in a tight range due to limited liquidity in the absence of US market participants.
NZD/USD experienced the most significant movement among USD pairs, rising approximately 0.50%. Most of the action happened during the Asian Pacific session, with markets slowing down afterward. Other currency pairs in relation to the USD saw movements of 0.2% or less. Overall, major currencies ended the day lower relative to the NZD, with the CHF being the weakest performer.
Today’s Market Expectations
Today we have the Australian Q4 Wage Growth, with the Year-on-Year (YoY) number anticipated to tick higher to 4.1%, compared to the 4.0% seen in Q3. Despite this anticipated increase, the Reserve Bank of Australia (RBA) foresees a slowdown in wage growth as the labor market stabilizes. This projection aligns with recent labor market data, which indicated some challenges in employment conditions.
The FOMC minutes will be released in the evening. They made significant changes to its statement, reflecting a more balanced stance on rate cuts versus rate hikes. However, it did not raise rates from 5.25% to 5.5% as anticipated. The statement now describes economic growth as “expanding at a solid pace,” replacing previous references to the banking sector as “sound and resilient” and the prediction of potential negative impacts from tighter credit and financial conditions.
Besides that, the Fed included a sentence indicating a better balance between the risks of not meeting inflation and employment targets. A hawkish caveat was introduced, stating that the Fed “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2%.” Furthermore, guidance regarding “additional firming” was removed, and replaced with a more dovish or balanced view on “considering any adjustments to the target range.”
Yesterday we opened five trading signals with four of them reaching the targets, as the USD slipped lower during the European session. The price action wasn’t too fast, but it was enough for us to end up with three winning forex signals, while we got caught by the decline in USD/JPY on one occasion.
Gold Testes the 50 Daily SMA
After dropping by $40 due to the US CPI inflation news last Tuesday, gold has been rising for over a week, and it is currently trading at $2,031. Buyer defense of the daily chart’s 100-day Simple Moving Average (SMA) contributed to last week’s recovery, pushing prices back above the $2,000 mark. The overall resilience of gold indicates a promising future for the precious metal, even in the face of market turmoil. However, buyers couldn’t push the price above the 50 SMA yesterday.
XAU/USD – Daily chart
NZD/USD Keeps Trading Between 2 MAs
Yesterday, the NZD/USD pair moved very little after making considerable gains the previous week. In spite of this, the New Zealand dollar has shown strength lately, rising about 1 cent during the subsequent recovery after rebounding off the support zone at 0.6050. Unfortunately, resistance was faced by the rally close to the 0.6160-70 zone, which caused it to stall and not go higher.
NZD/USD – Daily Chart
Cryptocurrency Update
Bitcoin Consolidates Around $52,000
Bitcoin’s price continues to surge, nearing the $50,000 threshold as buyer confidence grows. Although there was a brief dip below $40,000 following the SEC’s approval of an ETF, Bitcoin quickly rebounded and is now approaching the $50,000 mark again. Notably, there has been an increase in Bitcoin outflows as sellers liquidate existing positions. However, buyers remain dominant, pushing the price above its January peak and signaling a highly positive market outlook.BTC/USD – Daily Chart
Ethereum Breaches $3,000
Although Bitcoin has experienced a significant upswing over the past two weeks, its trade volume is increasing, suggesting that a reverse may be imminent. Bitcoin trade volume increased by 24% yesterday. Despite the lack of significant movement in price, speculators might be preparing to increase Bitcoin’s gains and raise its value to $53,000.Ethereum – Daily Chart
- ETH Buy Signal
- Entry Price: $2,290
- Stop Loss: $2,590
- Take Profit: $1,750
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