Forex Signals Brief for March 9: Markets Stabilize After Powell’s Uncertain 50 bps Rate Hike Comment
Powell threw cold water on market's expectations for a 50 bps hike this month, which sent the USD lower, but sentiment remains soft
Yesterday’s Market Wrap
The USD resumed the upside momentum again on Tuesday affter powell mentioned that interest rates could go as high as 5.75%, which hurt investor sentiment and sent risk assets lower. But, yesterday during the second day of his testimony in the US Congress, FED Chairman Jerome Powell mentioned that there is still additional data to be received before the March 22 meeting, including the Job Openings and Labor Turnover Survey (JOLTS) data from toyesterday which was positive.
Powell emphasized that the decision on interest rates later this month is dependent on the incoming data, particularly jobs numbers and consumer price index (CPI) data. He also stated that any decision regarding the March meeting has not been made yet, so the 50 bps hike is not a certain thing. Powell’s comments can be interpreted as a deliberate attempt by the FED to push back against the market’s expectation of a 70% chance of a 50 bps hike. The US retreated for a while but started to turn bullish again. The Bank of Cabana kept interest rates on hold at 4.50%, which weighedon the CAD, sending USD/CAD toward 1.38.
Today’s Market Expectations
Today is a quiet day regarding the economic data, which started with the final GDP and GDP price index fronm Japan. The CPI (consumer price idnex) and the PPI (producer price index) reports form China showed a slowdown in inflation for both, consumers and producers. The Unemployment Claims report from the US is expected to show a slight increase to 195K
Forex Signals Update Â
Yesterday the price action was slow across all markets, apart from a small decline in the USD after Powell’s comments. We continued with the positive performance after both our Gold signals closed in profit, while four other trading signals remain open.
The 20 SMA Rejecting [[Gold]
XAU/USD – 60 minute chartÂ
Will the 100 Daily SMA Hold for EUR/USD?
EUR/USD has been bullish since October and the 20 SMA (gray) was doing a great job as support, indicating that the bullish pressure was strong. But, this moving average was broken as USD buyers returned and now the price is facing the 100 SMA (green) after Tuesday’s reversal lower.
EUR/USD – Daily 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 Remains Slightly Bearish
Bitcoin has been retreating in the last two weeks, after being bullish since early January. The price slipped lower after buyers failed to hold gains above $25,000, but it was consolidating around $23,000 for several days. Yesterday though, the retreat resumed after Powell’s comments, which hurt risk sentiment.
BTC/USD – 240 minute chart
MAs Keeping ETHEREUM Down
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.
ETH/USD – H4 chartÂ
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