Forex Signals Brief for March 7: RBA Raises Rates by 25 bps Again
Yesterday’s Market Wrap
Yesterday the economic calendar was light, there wasn’t much news or events for the market to react to except for China’s growth target announcement, which affected prices. The market is mostly waiting for Powell’s comments, which could be released soon or may have to wait until 10 am ET tomorrow. The US dollar weakened slightly before a speech by Powell, but the market didn’t seem too concerned about similar comments made by Daly or Waller. The author thinks the market is not fully considering the possibility of higher interest rates (up to 6%).
Towards the end of the day, Treasury yields increased, which could indicate that the market is starting to realize the potential for higher rates. The EUR/USD exchange rate briefly reached its highest level since February 20, but then retreated. Some analysts are predicting a terminal rate of 4.25%. The GBP/USD exchange rate remained around 1.20. The AUD and NZD currencies decreased due to concerns about China’s economic growth. The USD/JPY exchange rate didn’t change much.
Today’s Market Expectations
Today started with the Average Cash Earnings from Japan, which posted a considerable slowdown in January, followed by the Reserve Bank of Australia (RBA) meeting which delivered a 25 basis points (bps) rate hike, bringing them to 3.60%. German factory orders posted a decline for February a while ago, after a strong increase in January. In the evening, Fed Chair Powell will continue his testimony which started yesterday, followed by SNB Chairman Jordan and RBA Gov Lowe.
Forex Signals Update
Yesterday the USD continued its retreat from last Friday, but commodity currencies such as the NZD and the AUD showed weakness and were retreating lower in the Asian session. As a result, our sell signal in these two currencies against the USD closed in profit, while our Oil signals hit SL.
Will MAs Hold as Support for GOLD?
Gold has been bearish since early February and the 50 SMA (yellow) was acting as resistance, pushing the highs lower. But, last week we saw some strong buying momentum which pushed the price above three moving averages. Yesterday we saw a retreat though, although the 20 SMA (gray) held as support initially, so let’s see if there will be a bounce from there.
XAU/USD – 240 minute chart
AUD/USD Continues to Make Lower Highs
Late last week we saw a retrace in AUD/USD which took the price to 0.6770s. But, that’s where the 50 SMA (yellow) was standing on the H4 chart, which provided resistance and rejected the price. Yesterday the price slipped lower as this pair starts to resume the bearish trend from last month. We decided to open a sell forex signal as the pressure has turned to the downside, despite some light USD weakness today, which is a bearish signal for this pair.
AUD/USD – 240 minute chart
Cryptocurrency Update
In the last two months, we have seen some decent bullish price action in the crypto market, pushing BTC above $25,000, which was a good sign that the crypto winter might be over. Although, last week we saw a retreat in cryptocurrencies but in the last few days the price action has died out and digital coins have been trading in a very tight range.
BITCOIN Trading Around $25,000
Bitcoin has been bullish since early January although we have seen a retreat since they held better than other risk markets. the price slipped below the 50 SMA (yellow) on the daily chart, but over the weekend the decline stalled and now BTC traders are trying to decide.
BTC/USD – 240 minute chart
ETHEREUM Holding on Around $1,600
Ethereum pushed above moving averages in January which soon turned into support, especially the 200 SMA (purple). But, buyers are having difficulties at the resistance zone below $1,800 and last week sellers pushed the price below the 50 daily SMA. So, let’s see if the 200 SMA will hold again now.
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