After a week filled with key events and market fundamentals, this week lacks any significant market drivers, which may lead to lower volatility unless unexpected developments occur.

Eyes on US Durable Goods Data

Indicator Forecast Prior
Durable Goods Orders 1.0% -6.2%
Core Durable Goods 0.4% -0.4%
CB Consumer Confidence 107.0 106.7
Richmond Fed Manufacturing Index -5 -5

 

There are a few economic releases during the US session today that may impact the markets based on any surprises due to recent revisions of economic figures.

According to a Bloomberg survey, Durable Goods Orders are expected to increase by 1.0% in February, following a decline of 6.2% in January. The focus will be on Core Durable Goods Orders, expected to rise by 0.4% in February after declining by 0.4% in January. If the February numbers disappoint, it may result in a downside revision in the estimates for Q1 GDP.

DXY Above 104.0

The US Dollar Index has recently closed above its significant resistance levels of 103.65 and 104.0 for two consecutive weeks. This has eased the bearish outlook, but according to the price/time method rules, an asset must have three weeks of consecutive gains to be considered a trend change from bearish to bullish. Hence, it is yet to be confirmed if the trend change is indeed happening.

The next critical resistance level stands around the 104.50 – 104.60 area, which should be watched closely.

Euro Holding Above 1.08

EURUSD experienced another decline last week due to the strength of the USD and the likelihood that the ECB will reduce interest rates in June. Currently, Bloomberg reports that traders estimate a 93% probability of a 25bps rate cut in June.

In the meantime, EURUSD’s major support remains at 1.08. However, breaking that support would pave the way for further declines—possibly towards 1.0760 and 1.07.

Gold Remains Bullish

Gold’s value decreased on Friday, and it almost lost all of its gains for the week. However, it managed to recover during the first day of this week. Unfortunately, it couldn’t sustain these gains. Today, Gold is attempting to break through the 2180 resistance level, which is a significant point to monitor. If it manages to surpass this resistance, it could pave the way for further gains, possibly reaching 2195.

Another failure to sustain today’s gains would increase the possibility of another leg lower towards Friday’s lows of around $2160.

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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