The FED looking closely on inflation numbers

Forex Signals Brief for March 14: Will Inflation Save the USD Today?

Posted Tuesday, March 14, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Last week the USD started to surge after Powell’s comments in the testimony at the US Congress for higher terminal rates, but reversed lower after he didn’t confirm a 50 bps hike on Wednesday, leaving the decision to the data. Yesterday the economic data was light, but the risk sentiment improved considerably as odds for a 50 bps FED hike continue to decline.

The bankruptcy of the SNV bank has raised the alarm although that is weighing more on the USD. besides that, the FED inflation forecasts for 2023 took a plunge, which is a relief for Powell at this difficult time. Markets are pricing in a less-aggressive FED going into the March meeting and the odds are now almost evenly split between 25 bps (basis points) hike and a standstill.

Today’s Market Expectations

Today started with the Westpac Consumer Sentiment from Australia, which showed an improvement after the deterioration in the last month. The UK employment report was released a while ago, which was expected to show a jump in the unemployment rate by 2 points, while the Average Earnings Index was expected to decline by 2 points. Although the most important release comes later in the US session, with the publication of inflation figures for February. CPI (consumer price index) MoM is expected to show a 0.4% for both the core and headline figures, but the annualized CPI YoY is expected to show a 4 points decline to 6.0% from 6.4% previously.

Forex Signals Update

Yesterday the volatility picked up further, as the SVB bank failure sent financial markets in a frenzy, with the USD continuing the decline from last Friday, while risk assets kept moving higher. We opened seven trading signals yesterday, all of which were short on the USD and closed in profit.

Booking Three Winning Signals in [[Gold]

We continue to have a really positive run in Gold, shifting from short to long last week, with the change in the momentum. Yesterday we opened three buy Gold signals, two long term and a short term, all of which closed in profit as buyers pushed higher.

XAU/USD – 60 minute chart 

USD/JPY Fails at the 50 Daily SMA 

USD/JPY turned quite bearish since October, as the JPY pushed higher while the USD retreated lower. But we saw a bullish reversal at the start of this year and buyers pushed the price around 10 cents higher. Although they couldn’t break the 50 daily SMA (yellow) and now the sentiment has turned negative again, sending this pair lower.

EUR/USD – H4 chart

Cryptocurrency Update

Cryptocurrencies are showing strong buying pressure once again, after retreating lower since the last week of February. BTC slipped below $20,000 after failing to hold gains above $25,000 three times, while ETH fell below $1,400. Although we saw a reversal over the weekend and now cryptos are looking bullish again.

BITCOIN Bounces Off the 200 SMA

Bitcoin started retreating in late February and the 50 SMA (yellow) was broken on the daily chart, while the decline escalated and BTC fell below $20,000 eventually. But the 200 SMA (purple) held as support and we decided to open a buy BTC signal which is now close to hitting the TP target after the strong bounce of the last few days.

BTC/USD – Daily chart

ETHEREUM Heading for February’s Highs Again

Ethereum pushed above moving averages in January which soon turned into support. Last week sellers pushed the price below the 50 daily SMA (yellow) as well as below the 200 SMA (purple). But, buyers came back and closed that day as a hammer candlestick, which is a bullish reversing signal. Over the weekend ETH has turned bullish and is now trading above $1,500 again.

ETH/USD – Daily chart
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