Daily analysis and trading strategy of the forex and gold market

Fundamentals

On Thursday, the US 10-year Treasury yield rose sharply after breaking through 4%, leading to a rise in the US dollar. Intraday fundamental news was mixed, with strong US employment data but dovish comments from Federal Reserve officials, as well as continuing inflation in the Eurozone and hawkish signals in the European Central Bank meeting minutes, which limited the bullishness of the US dollar, only recovering from the previous day's decline. The euro retested the 100-day moving average support and may not break the line yet to open up a downward trend. The British pound further tested the February support range and maintained a volatile trend. The yen is consolidating with a weak bias, and the interest rate differential between the US and Japan may continue to put pressure on the yen. The rise in European and American stock markets to some extent limited the decline of commodity currencies, but the Australian and New Zealand dollars both fell slightly, and the Canadian dollar also closed slightly lower. Under the pressure of the strong US dollar, gold continued to rise, but the gains were limited and still below 1845.

Data showed that the Eurozone's harmonized CPI year-on-year initial value for February fell from 8.6% to 8.5%, but was higher than the expected 8.3%; the monthly rate rose 0.8%, also higher than the expected 0.5%. The initial value of the core harmonized CPI year-on-year rose from 5.3% to 5.6%, still at a historical high. Previously, data showed that core inflation in the Eurozone's core members remained high, coupled with this overall inflation data in the Eurozone, further betting on the prospects of an interest rate hike by the European Central Bank.

The minutes of the European Central Bank meeting showed that the European Central Bank was more optimistic than in December, believing that the risks to growth prospects had become more balanced. Most officials believe that it is too early to worry about the dangers of excessive rate hikes, but they disagree on what signal should be sent for the next rate hike. Some members are not willing to send a firm signal for the next rate hike, but ultimately the hawks won, and the European Central Bank clearly hinted at a 50 basis point rate hike in March at its February meeting.

The number of initial jobless claims in the United States last week fell from 192,000 to 190,000, better than the expected 195,000, and remained below 200,000 for the seventh consecutive week. At the same time, nonfarm unit labor costs in the fourth quarter were significantly revised upwards from 1.1% to 3.2%, higher than the expected 1.6%. The data shows that the US job market remains strong, and wage levels may make it difficult for US inflation to continue to fall rapidly, thereby strengthening the need for the Federal Reserve to continue to raise interest rates.

However, after Federal Reserve officials repeatedly made hawkish comments to maintain their stance on rate hikes, a dovish voice, Atlanta Fed President Bostic, spoke out differently within the Federal Reserve. Bostic said that the Federal Reserve would conditionally suspend interest rate hikes in the late summer of 2023, but if economic data continues to be stronger than expected, expectations for future rate trends need to be adjusted. Bostic has no voting rights this year, and the market has largely ignored this "noise."

European and American February Markit Services and Composite PMI indices will be released intraday, and the market will continue to compare the economic situations in Europe and America to evaluate their monetary policy prospects. The tug-of-war may continue.

Technical Analysis:

EUR/USD
On the daily chart, the price retraced back to the MA100, and without breaking below this line, it will be difficult to open further downward space. On the 4-hour chart, the price oscillated lower after being blocked below 1.0690, but the downside momentum is not strong. On the hourly chart, the price tested the potential rebound trend line on the downside, and should not be excessively bearish. It is recommended to seek a light position long above 1.0585 intraday, with a stop loss at 1.0565, and look for an opportunity to go short around 1.0655.
Support: 1.0585, 1.0565, 1.0530
Resistance: 1.0655, 1.0690, 1.0710

GBP/USD
On the daily chart, the price fluctuated within the February range of 1.1914-1.2180 and approached the lower bound, still lacking direction. On the 4-hour chart, the price is violently fluctuating, and attention is paid to support at 1.1920 and resistance at 1.2140. On the hourly chart, the downside stabilized above the previous low point of 1.1920, with a tendency to rebound further. It is recommended to pay attention to opportunities for operations within the range of 1.2050-1.1920 intraday.
Support: 1.1920, 1.1900, 1.1800
Resistance: 1.2050, 1.2100, 1.2150

USD/JPY
On the daily chart, the short-term moving averages are in a bullish formation, and the price is expected to continue to rise, with short-term support at the MA10. On the 4-hour chart, the price is oscillating at a high level, with no momentum. On the hourly chart, the price is slightly rising, with the bulls and bears tugging at each other below the previous high point. It is recommended to seek a long position above 136.00 intraday, with a stop loss at 135.70, and look for a target price of 137.00.
Support: 136.00, 135.70, 135.25
Resistance: 137.00, 137.50, 137.80

Gold
On the daily chart, the price rebounded for four consecutive days and tested the MA20, with the stochastic indicator showing a tendency to rise, but without breaking above the MA20, it may continue to fluctuate. On the 4-hour chart, the price is oscillating around 1845, and the overall downtrend has not yet reversed. On the hourly chart, the price stabilized and rose above the 1830 line, but still encountered resistance from the previous high of 1845. It is recommended to seek a light position long above 1835 intraday, with a tight stop loss, and decide the further direction based on the performance around the 1845 line.
Support: 1835, 1830, 1820
Resistance: 1845, 1850, 1860

XAUUSD EURUSD GBPUSD USDJPY

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