Forex Signals Brief for Mar 4: The Fed Steps In

The bounce in markets was short-lived it seems, even after the Fed decided to step in and cut interest rates.

The Fed executed an emergency half-percentage-point rate cut in a move that is usually reserved for only emergency times. We’ve seen it before in 2001 and 2008, so that gives us some sort of context as to how they are viewing the current market conditions.

Clearly there will be some economic fallout from the coronavirus across the globe. We saw the RBA slashing their cash rate in response also. However, the word we are hearing from China is that new cases are actually now on the decline and it seems they have slowed the tied. But ultimately it has come at a significant cost to the global economy.

Today’s Agenda

It’s really anyone’s guess as to which way markets will ultimately move today, but there will be some interesting data points to try and gauge where we sit.

The big data point of the week will be US non-farm payrolls, but today the unofficial ADP report will come out. We really don’t expect there to be a financial impact on the US at this early stage. And the US jobs report has been a strong part of the economy. 

Come next month, things might be different. Nevertheless, this is an important update to watch given what is happening with the SPX at the moment.

In the UK, there are also some PMI prints so the GBP/USD will be busy once again. While in Europe there are some secondary PMI prints that will also impact the EUR/USD.

Forex Signal Update

The FX Leaders Team finished with one win from three signals in what was a volatile session once again.

Gold – Pending Signal

The GOLD trade has been an interesting one of recent weeks. Price really failed to rally last week, which has made many think it’s a bit weaker than what the chart would suggest. After a spike yesterday, we are watching for a retrace.

SPX – Watching

The SPX continues to have wide ranges. Yesterday, price collapsed after the Fed rate cut, suggesting the market is worried about what lies ahead.

Cryptocurrency Update

BTC hasn’t done too much in the last 24 hours and is relatively quiet by global market standards at the moment.

The $9,000 level is still key resistance and support sits at $8,500. So my thinking is that we need to sit and wait for a breakout in either direction.

I remain bearish until proven otherwise.