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Forex Market Treads Carefully Ahead of FOMC and PMIs

Forex Market Treads Carefully Ahead of FOMC and PMIs

As we step into the week’s trading session, the forex market appears to be treading on thin ice with currencies like EUR/USD fluctuating within a narrow band, while anticipation builds around crucial economic events poised to unveil in the upcoming days.

EUR/USD Struggles for Direction Amidst Economic Concerns

EUR/USD remains locked in a tight range above the 1.0750 mark, struggling to find a definite direction in the forex market. The German Bundesbank’s report casts a shadow over the euro as it suggests Germany—the Eurozone’s powerhouse—is likely suffering a recession due to weakened external demand and consumption. While European indexes portray a veneer of market confidence, investors remain cautious.

EURUSD Daily Chart

The EUR/USD pair is showing a bullish bias above 1.0760, indicating a potential for gains of up to 20-40 pips intraday. The recommendation is to buy with an entry price (pivot) set at 1.0760, and target and take profit levels (TP) at 1.0795 and 1.0810 respectively. The risk advised is 2% per trade. This analysis is based on the spot market conditions. The RSI shows upside momentum suggesting a strong bullish trend. Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.

EUR/USD Intraday

GBP/USD Wavers At Key Threshold

Over in the United Kingdom, the GBP/USD pair exhibits a tenuous hold on the 1.2600 level, wavering after a loss-streak last week. Despite the absence of clear motivation from the US Dollar during the quiet Presidents’ Day, the pair demonstrates a slight bullish tilt, suggesting potential upside movement amidst unpredictable market dynamics.

GBPUSD Daily Chart

For the GBP/USD pair, the bias remains bullish. The recommendation is to buy with an opportunity for gains of up to 30-45 pips intraday. The entry price (pivot) is set at 1.2570, with target and take profit levels (TP) at 1.2645 and 1.2665 respectively. The suggested risk is 2% per trade. This analysis is based on the spot market conditions. The RSI also shows upside momentum indicating a bullish trend. Due to market volatility, it’s important to note that some of the key levels may have already been reached and scenarios played out in the forex market.

GBP/USD Intraday

Commodities in Focus: Gold Stands Resolute Above $2,010

As for commodities frequently funneled through the forex arenas, gold stands strong. XAU/USD maintains ground above $2,010, though movements have been restricted due to the US holiday in the forex market. Investors are grappling with mixed signals — while data points towards persistent inflation, Fed’s cool stance on rate hikes has left gold traders to churn in a cycle of speculation.

XAUUSD Daily Chart

XAUUSD Daily Chart

In the gold market, there is a further upside expected with potential gains up to 2029.00-2033.00. The recommendation is to sell with an entry price (pivot) set at 2011.00, and target and take profit levels (TP) at 2029.00 and 2033.00 respectively. The risk advised is 1% per trade. This analysis is based on spot market conditions. The RSI shows upside momentum suggesting a strong bullish trend in the forex market. Due to market volatility, it’s important to note that some of the key levels may have already been reached and scenarios played out.

The Australian Outlook: Eyes on Central Bank Decisions

The AUD/USD pair, after marching towards a two-week peak in the forex market, now idles as it awaits key decision notes from the Reserve Bank of Australia and the Federal Reserve. Positive sentiments toward the Australian Dollar underline China’s return to markets post Lunar New Year break, which could offer further clues to the currency’s trajectory.

A Week Packed with Potentially Market-Shifting Data

Looking ahead, the forex market gears up for a packed schedule that could send shockwaves through currency valuations:

  • Tuesday, 20th February: Australia’s Monetary Policy Meeting Minutes and China’s Loan Prime Rates are likely to set off ripple effects across the AUD landscape.
  • Wednesday, 21st February: The much-anticipated FOMC Meeting Minutes could deliver a decisive jolt to USD-carrying currency pairs.
  • Thursday, 22nd February: Eurozone and British Manufacturing PMIs, alongside key Canadian retail data, will undoubtedly provide fresh narratives to EUR, GBP, and CAD trends.
  • Friday, 23rd February: German Ifo Business Climate index could either cement or uplift the teetering confidence in the EURUSD pair.

Intraday Analyses Further Dictate the Pulse of Forex Markets

Against the backdrop of these impending reportsin the forex market, intraday analyses depict cautious optimism:

  • EUR/USD: Analysts suggest a bullish bias above 1.0760.
  • GBP/USD: A persistent bullish slant is anticipated.
  • Gold: Signals point towards an uptrend with gold experiencing a momentum for further gains.

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Author

  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.