Trader Talk

USDX: 90.30

The unambiguously positive wording from FED chairman Jerome Powell stimulates tremendous buying interest for the greenback, which unavoidably caused G-10 bloc shifting its original narrative. In summation, AUD and NZD suffered the most whereas CHF EUR and JPY saw modest declines. However, the further exploration hinges on the fundamental data, which bring us to inflation, productivity and greater economic activity outlook.

USD JPY: 107.50

A bullish breakout to 107.00 and consequentially a weekly high for USD provide extensive buying bias for our traders. Notwithstanding the transitory news trading exhibits greater market risk to the positions, it is transparent that Japanese Yen is relieved for a stronger dollar and relatively weaker Yen.

EUR USD: 1.2220

125 pips plunge for our EURUSD, Powell’s remark speaks further and surpasses the traditional bullish addressing. However, in the daily chart, the lower bound of the ascending channel has just been tested and a tentative 15 pips four-hour doji saved the bullish overview. Again, we have 2-yr and 10-yr Treasury rate inches higher respectively.

GBP USD: 1.3900

The Pound gathered its strength against U.S. dollar in contrast to the bullish interpretation of the remark. Theresa May’s Speech in next Friday is heavily weighed on our financial calendar, especially seeing the aftermath of Powell’s testimony. It is indicative that we expect a greater speculative longing position will be held again and for the pair this week. Generally, a soft Brexit and positive bilateral trading deal for the U.S. send the welcoming signal.

AUD USD: 0.7790

The highest of 0.7885, Aussie dollar spent the last 36 hours moving lower against the dollar. The main argument in the market is that the margin of error for the Reserve Bank of Australia forecasts that understate the slagging wage growth and overstating the inflation data. However, the dilemma for trades is that reflection of such misleading data can only be observed in the long run, making it hard for a deviation in Australia’s fiscal policy.

NZD USD: 0.7235

The kiwi weakened as is testing the resistance level at 0.7230 and reaching towards the fresh month low, following the greenback was supported by Powell’s testimony regarding strong economic outlook and tightening the gradual rate hikes this year. The movement was dominated by the US side, as no relevant major news coming from the NZD side. Breaching below the support level of 0.7200, indicating the persistence of the current trend.

USD CAD: 1.2770

A two-month high for USDCAD at 1.2755 is advancing it momentum as of writing, adding up the positive signal from the oscillator, the third higher high has just been confirmed and facilitated by surging greenback. Despite the higher inflation drives speculation of a potentially more hawkish Bank of Canada, the Fed’s hawkish shift underpinned the continuing differences in policy stances between the US and Canadian central banks.

VIX: 18.59

VIX took a short leap upward by less than 18% as the U.S. Equities dropped down following the Federal Reserve Chairman Powell comments which there will be more rate hikes than the expected. Hence the fresh fear of inflation is starting to reveal itself. The dropped in the stocks trimmed the gain from the previous trading day. However, the loss is still contained.

GOLD: $1,318

The huge drawback in the gold price, back to below the $1,320 level and possibly testing the fresh month low as it took a direct hit from both gain in the dollar and surging yields after Powell’s talks regarding outlook to the economy as well as the expected inflation. Crossing the key level at $1306 will confirm the market that bearish momentum will take place. Bulls expecting the stock market correction will save the yellow metal.

OIL (WTI): $62.80

Pull back from the Oil price after surging up to just beneath $64.00 level, following the strengthening USD after the optimistic point of view from the Fed Chair, Powell, and pressured on renewed concerns of higher US production. IEA Chief mentioned that the US is to be the largest oil producer by next year, potentially overtaking Russia. All eyes on the API weekly figures on US crude inventories later this week.

BITCOIN (BTC): $10,615

The crypto is running its 2nd consecutive daily gains, c, after pushing back up the psychological level at $10,000 on Monday and its steady climb. Momentum is turning to bullish at this time, after it was sparked back into the largest market capitalised, Altcoin. Improving risk tolerance by the investors, driving the price of the bitcoin up gradually. Breaking above the key resistance level at $11,748 will give a strong buy-off signal.

Macro Themes in Play

• 1st of March Prelim GDP data from U.S. process upbeat data that can potentially prolong the strength of greenback to the end of the week

• EURUSD break below our pivotal 1.2230 and quickly flowed back reassured our previous expectation