Yesterday started with a round of data from China, which was positive, but it failed to ignite markets as risk sentiment remained negative throughout the day. February Industrial Production and Fixed Asset Investment beat expectations, showing decent growth last month. But stock markets and commodity dollars remained bearish nonetheless.

The USD/CHF pair experienced notable movement, with a range of 60 pips, as it broke higher and attracted momentum buying from traders. Despite upcoming meetings of the Swiss National Bank (SNB) and the US Federal Reserve, where both are expected to maintain unchanged interest rates, there was no significant news catalyst behind the rally. However, it’s possible that the rise in Treasury rates in the United States was driven by anticipation of a less dovish stance from the Fed.

Today’s Market Expectations

Today will witness the first two out of five major central bank meetings for the week, with both the Bank of Japan (BOJ) and the Reserve Bank of Australia (RBA) scheduled to make announcements. Regarding the Bank of Japan (BOJ), there are expectations for significant monetary policy changes, including discontinuing yield curve control (YCC), ceasing risk asset purchases, and moving away from negative interest rates.

It’s anticipated that the BOJ will ultimately depart from its negative interest rate policy (NIRP), possibly lifting the policy rate by 10 basis points. Additionally, the central bank is expected to abandon YCC while maintaining quantitative easing (QE) and discontinuing ETF purchases. These expectations have been fueled by various leaks and reports, as well as the largest wage increases seen in 30 years. However, it’s worth noting that the market has already priced in the BOJ’s potential exit from its current policies. Therefore, there is a significant possibility of surprise if the central bank fails to meet these expectations, which would send the JPY crashing lower and vice versa.

The Reserve Bank of Australia (RBA) should leave the cash rate unchanged at 4.35% once again. But, in light of recent lower inflation figures and another disappointing labor market report, the central bank is expected to move away from its tightening bias and maintain a neutral stance on monetary policy. Market expectations for the first rate cut are currently set for August. However, if the RBA shifts away from its tightening stance as anticipated, it’s likely that these expectations will be brought forward, potentially leading to earlier forecasts for a rate cut.

In the US session, we have the Canadian inflation and forecasts for the headline annualized CPI stands at 3.1%, an increase from January’s 2.9%, while the MoM figure is expected to be 0.6%, up from 0.0% previously. The Bank of Canada typically focuses on underlying inflation measures, which are considered more important. If there is a miss across the board in this report, it would likely be seen as positive news for the central bank, especially given the recent slowing in wage growth reported in the labor market. A miss in the inflation figures could weigh on the Canadian dollar, while a beat may have little impact on the market.

Forex Signals Update

Yesterday the price action was slow in most assets, so we only opened three trading signals, while we already had some running trades from last week. We closed only two trading signals, one crude Oil signal and a Silver signal, both of which hit the take profit targets.

MAs Forcing Gold to Make Lower Highs

Last week, gold turned lower after reaching a new record high the week before, with the XAU/USD pair dipping to $2,152, which turned into a support zone. We opened multiple buy Gold signals against this support zone, but the price keeps returning to it, suggesting that we may witness a break below $2,150 this week and yesterday it was broken after the dip in XAU/USD. But the price returned back up, however moving averages are acting as resistance now.

XAU/USD – 240 minute chart

EUR/USD Breaks below the 100 SMA

EUR/USD exhibited resilience over the course of approximately a month, marking a gain of 300 pips. However, buyers faced repeated challenges in driving the EUR/USD price above the 1.10 level last week. Despite attempts to push the price higher this week, a reversal occurred, indicating a depletion of buyer momentum. Subsequently, the Euro experienced a significant decline of over 100 pips, with sellers pushing the price below the 100 SMA (Simple Moving Average) following a 50-pip downturn yesterday.

EUR/GBP – 240 minute chart

Cryptocurrency Update

Bitcoin Stays Below $70,000 

Bitcoin (BTC) experienced significant volatility last week, surging to a new all-time high above $73,000 in the early days of the week. Meanwhile, Ethereum (ETH) maintained its upward trajectory, breaching the $4,000 milestone. Despite a subsequent bearish reversal, ETH found support above the 50-period Simple Moving Average (SMA) on the H4 chart, attracting buyers and leading to a rebound in its price. Ethereum reached a new yearly high of $4,100 before retracing below the $4,000 level again. Towards the end of the week, Bitcoin faced selling pressure, pushing its price below $65,000 on Saturday. However, buyers stepped in, resulting in a recovery that brought BTC back above $68,000 by the weekend but, BTC/USD remains below $70,000.

BTC/USD – 240 minute chart

Ethereum Returns to $3,500

ETH (Ethereum) sustained its upward trajectory last week, even after experiencing a bearish reversal subsequent to surpassing the significant milestone of $4,000. Despite this setback, ETH found support above the 50-period Simple Moving Average (SMA) on the H4 chart, a crucial technical indicator. This support level attracted buyers, leading to a resurgence in Ethereum’s price. Consequently, ETH achieved a new yearly high of $4,100 early last week, only to retrace its gains and fall to $3.500 yesterday, with MAs now turning into resistance.

ETH/USD – 240 minute chart