Forex Signals Brief Feb 20: Eyes on Jobless Claims and Donald Trump
Today the US unemployment claims and comments from Washington will be the focus of financial markets, so all markets are at risk, considering the recent price action.
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One of the most significant developments yesterday was former President Donald Trump’s sharp social media post criticizing Ukrainian President Zelensky as a dictator and calling for elections. It was no surprise that Russian President Vladimir Putin appeared pleased with the ongoing negotiations, which suggests the end of this conflict, given the comment for a reduction in Pentagon spending. Another unexpected development was talk of an 8% cut in the U.S. military budget.
The U.S. dollar showed broad strength, while the euro suffered from the uncertainty, pushing EUR/USD down to 1.04. In the foreign exchange market, risk-averse sentiment was apparent, though not overwhelmingly so. While bond yields fell by 1-3 basis points, equity markets saw modest gains, despite a sharp reversal in European stocks. The USD/JPY pair neared its lowest level of the year, declining 60 pips on the day due to strong yen buying.
Among commodity currencies, USD/CAD was a notable gainer, though the antipodean currencies saw little movement. Kazakhstan’s constrained oil production had a solid performance. The Australian dollar briefly spiked following a report suggesting that Trump may seek a more comprehensive trade deal with China. Despite the notable drop in interest rates, there was little movement outside of the yen, with the New Zealand dollar remaining flat by the end of the day.
Gold reached a record high of $2,947 before settling at $2,933. The S&P500 also hit a new all-time high, while WTI crude oil finished slightly higher, gaining $0.40 to close at $72.30. Meta’s stock continued to slide, dropping roughly 5% on Tuesday. Meanwhile, Palantir shares plunged 10% following Trump’s comments about an 8% reduction in Pentagon spending.
Today’s Market Expectations
The latest Labour Force report from the Australian Bureau of Statistics showed employment rising by 44,000, exceeding the expected 20,000 but slightly below the previous increase of 56,300. The unemployment rate edged up to 4.1% from 4.0%, though this increase was largely due to a surge in the participation rate, which reached a record high of 67.3%, surpassing the expected and prior reading of 67.1%. Female workforce participation played a significant role in this growth. Full-time employment saw a strong gain of 54,100 jobs, while part-time employment declined by 10,100, following the previous report’s figures of +80,000 full-time and -23,700 part-time jobs. The data highlights a resilient labor market with growing workforce engagement and robust full-time job creation.
The US Jobless Claims report remains a key economic release each week, offering a timely gauge of labor market conditions. While some easing has been observed, continuing claims remain near cyclical highs, and initial claims have stayed within the 200K–260K range since 2022. This week, initial claims are expected to rise slightly to 215K from last week’s 213K, while continuing claims are forecasted to increase to 1,863K from 1,850K.
Market volatility remained low in forex yesterday, with the US dollar gradually strengthening once again. US stock markets maintained a slightly bullish stance, prompting continued long positions in equities, while we opened another sell signals in crude after the failure to reach $73. Cryptocurrencies moved higher yesterday, with XRP bouncing $0.20.
Gold Pushes Another leg higher Toward $3,000
After President Donald Trump’s decision to implement reciprocal car and Chip tariffs, financial markets showed signs of unease, increasing demand for safe-haven assets like gold. Last week gold placed record high at $2,940 but it experienced a sharp drop, however it found support was found below the 50-day SMA (yellow) on the H4 chart. This week gold prices bounced higher and yesterday we saw another high at $2,947.
XAU/USD – H4 Chart
USD/JPY Still Remain Bullish on the Weekly Chart
This week, the UK employment report exceeded expectations, with average earnings rising and the unemployment rate edging down. Meanwhile, GBP/USD dipped below 1.26 after showing strong bullish momentum last week, though this decline was primarily driven by USD strength.
USD/JPY – Daily Chart
Cryptocurrency Update
Bitcoin Continues to Remain Between MAs
Bitcoin experienced major price swings, reaching an all-time high of nearly $100,000 before the end of 2024. The rally extended into January, peaking at $109,867 on January 20, the day of Trump’s inauguration. However, sustaining these levels proved challenging. Following Trump’s early February tariff announcement, BTC/USD briefly fell below $90,000 before rebounding above $100,000, only to lose momentum again. Currently, Bitcoin is fluctuating between the 50-day SMA (resistance) and the 100-day SMA (support), with a breakout above $100,000 needed to revisit January’s highs.
BTC/USD – Daily chart
Ethereum Starts to Reverse Higher
Meanwhile, Ethereum has faced strong selling pressure since surpassing $4,000 in late 2024. A dramatic flash crash on Monday saw ETH lose nearly half its value, plunging to $2,000 before partially recovering. While sentiment remains bearish, Ethereum could regain upward momentum if the $2,000 support level holds and overall market sentiment improves.
ETH/USD – Daily Chart
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