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FTSE 100 - British stock market continues to rise

The British stock market continues its upward movement supported by corporate reporting, as well as by a positive macroeconomic background. According to the UK Office for National Statistics (ONS), Retail Sales rose 0.5% in January after falling 1.2% a month earlier, while the annual rate slowed the decline from -6.1% to -5.1%. In turn, the Core Retail Sales Index on a monthly basis was 0.4% after -1.4% in December, while the annual rate was -5.3% after -6.5% a month earlier.
The day before, financial conglomerate Standard Chartered Plc. published its results: revenue was 3.47 billion pounds, after 4.32 billion pounds in the previous quarter, and earnings per share amounted to 0.039 pounds, significantly less than 0.33 pounds, recorded in the previous period. In turn, the consulting company Relx Plc. reported earnings of 4.58 billion pounds, beating analysts' estimates of 4.47 billion pounds, and earnings per share of 0.45 pounds, up from 0.39 pounds in the previous quarter. On the daily chart, the index quotes continue their corrective growth, rising in the direction of the resistance line, and the technical indicators are holding a buy signal.

Support levels: 7925, 7714 | Resistance levels: 8055, 8250

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NZDJPY

NZDJPY may be entering a volatile week. The Reserve Bank of New Zealand is scheduled to announce the next monetary policy decision on Wednesday at 1:00 am GMT. There is a lot of uncertainty around this announcement. Money markets price in around 40 basis points of tightening and majority of economists polled by Bloomberg see 50 bp rate hike as the base case scenario. However, calls for a lower hike or even a pause have been mounting recently as New Zealand is facing floods and damage from a cyclone. A decision to pause rate hikes to wait and see what damage to the economy weather has done, would be surprising and would likely trigger a pullback on NZD market.

When it comes to the JPY-side, an event to watch this week is the confirmation hearing of Kazuo Ueda in the lower house of the Japanese parliament scheduled for Friday, February 24. Ueda has been nominated to succeed Kuroda as Bank of Japan head and this week's confirmation hearing will be his first appearance since nomination. Any suggestions that the Bank of Japan may exit or roll down highly expansionary policy under his watch could trigger moves on the JPY market. Taking a look at NZDJPY chart at D1 interval, we can see that the pair has been largely trading sideways as of late. The pair failed to break above the midpoint of the trading range in the 84.50 zone. Apart from previous price reactions, this zone is also marked with a 200-session moving average. Moves on the pair has been recently confined to the inner 82.50-84.50 range and high-volatility events scheduled for this week, especially RBNZ decision, could lead to a breakout, direction of which may determine the direction of the next big move.

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BTCUSD - Growth, but serious negative factors for the digital market remain

There were no serious fundamental reasons for the strengthening of BTC positions, so most experts believe that it was caused by speculative operations. In particular, on February 15, one of the large funds made an acquisition of cryptocurrency worth about 1.0B dollars, which could push the quotes up. Nevertheless, two main long-term negative factors, the monetary policy of the US Fed and the pressure of US regulators, which can lead digital assets to a new decline, still persist.

The latest data on inflation in the USA confirmed the too slow pace of its decline, which finally convinced investors that in the near future the cycle of interest rate increases will not be completed, which will lead to further strengthening of the position of the US currency in relation to alternative assets. On the other hand, US regulators are increasing pressure on the cryptocurrency sector, trying to prevent a repeat of the situation with the FTX exchange and the loss of investors' investments. Currently, the main attention of officials is focused on the activities of cryptocurrency exchanges, which are systematically persecuted. In the middle of the month, the US Securities and Exchange Commission (SEC) accused the Kraken digital platform of selling a staking program unregistered by the regulator to customers and forced it to pay a fine of 30.0M dollars. Also last week, the Binance exchange was attacked again, although it was done through Paxos, the issuer of the Pax Dollar (USDP) and Binance USD (BUSD) stablecoins. The New York State Department of Financial Services (NYDFS) accused Paxos of insufficient control over its products and the possibility of their use by attackers. As a result, the issue of USDP and BUSD was stopped, but their turnover is still maintained. The consequence of these decisions has already been the termination of Paxos' work on the creation of a stablecoin for PayPal Holdings Inc. and the severance of relations with Binance. The management of the crypto exchange, according to Bloomberg, is considering the possibility of terminating cooperation with all partners from the USA and even completely leaving the American market. Experts believe that the situation could be much more dangerous for the entire digital sector if the authorities decide to freeze or confiscate assets that link BUSD to the dollar. In this case, the world's largest digital trading platform can expect bankruptcy. Technically, the key for the "bulls" remains the level of 25000 (Murray level [8/8]), consolidation above which will cause continued growth to the levels of 26562.5 (Murray level [+1/8]) and 27400 (Fibo retracement 38.2%). In case of a breakdown of the level of 23000 (the middle line of the Bollinger Bands, Fibo retracement 23.6%), the decline will be able to resume to the levels of 21000, 20312.5 (Murray level [5/8]).

Resistance levels: 25000, 26562.5, 27400 | Support levels: 23000, 21000, 20312.5

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AUDUSD Approaches Major Resistance

The Australian dollar is the best performing G10 currency today as rising copper prices seem to support the resources-linked currencies amid subdued USD demand. AUDUSD bounced off the lowest level since January 6 touched on Friday and returned above 0.6900 level, however hawkish FED and simmering tensions between US and China may limit the upside movement. Currently the pair is approaching local resistance at 0.6925, which is marked with previous price reactions, 50% Fibonacci retracement of the last upward wave and 50 SMA (green line). Break higher would pave a way towards the next resistance at 0.6980, however if sellers manage to regain control and halt advances, then another downward impulse towards support at 0.6870 may be launched. Aussie may experience increased volatility in the evening and the coming Asian session, during the releases of flash PMI for February and RBA minutes. One can observe a significant weakness of the US dollar, despite heightened geopolitical tensions.

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EURUSD

The bullish momentum of recent months eased in February. The last sessions have been marked by some indecision in the price that ended up consolidating. On the dollar index chart, we can see that there may be room for further declines in the dollar. Friday's daily candle rejected the 200-period EMA and if the price moves back below the 200- and 50-period EMAs, then the EUR could gain against US Dollar weakness. AUD leads the gains this trading session.


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Silver

Major European indices finished today's session mostly lower, with Dax closing slightly below the flatline as traders brace themselves for the release of critical PMI data for the eurozone and the US due tomorrow before the publication of FOMC minutes later on Wednesday. ECB's Rehn said rates should be raised after March and the terminal rate could be reached this summer. Silver bounced off the key support zone around $21.35-21.45 on Friday, which is marked with the lower limit of 1: 1 structure and 50% Fibonacci retracement of the last bullish wave. Moreover, a hammer formation has appeared on the D1 interval, which may be a sign that recent downward correction may have come to an end.

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AUDUSD

 

1. Indices from Asia-Pacific traded mixed today. Nikkei and S&P/ASX 200 dropped 0.2% each, Kospi and Nifty 50 gained 0.1% while indices from China traded mostly lower.
2. DAX futures point to a more or less flat opening of the European cash session today.
3. RBA minutes showed that Australian central bankers see inflation as more broad and persistent than expected. The document also strongly hinted that rate hike pause at meeting in February was not an option.
4. New Zealand Treasury said in a statement that reconstruction after a cyclone hit will be a boost to the New Zealand economy. Treasury noted, however, that boost to the demand will increase inflationary pressures in the economy and may cause RBNZ to hold rates at higher levels for longer.
5. BoJ Governor Kuroda expects wage growth in the Japanese economy to accelerate as labor market gets tighter.
6. Australian manufacturing PMI index ticked higher in February, from 50.0 to 50.1. Services index moved from 48.6 to 49.2.
7. Japanese manufacturing PMI dropped from 48.9 to 47.4 in February (exp. 49.2).
8. Cryptocurrencies are trading mixed with major coins posting decent gains. Bitcoin trades 1% higher, Ethereum gains 0.6% and Dogecoin moves 0.4% higher.
9. Energy commodities trade mixed - Brent drops 0.6%, WTI trades 0.9% lower and US natural gas prices increased 0.3%.
10. Precious metals pull back as USD strengthens - gold trades 0.2% lower, silver drops 0.5% and platinum declines 0.7%.
11. USD and GBP are the best performing major currencies while NZD and AUD lag the most.

In spite of a rather hawkish RBA minutes release, Australian dollar is pulling back today. AUDUSD is one of the worst performing major FX pairs as USD is on the rise. AUDUSD made an attempt at breaking back above a price zone marked with 50-session moving average (green line) and 50% retracement of the downward move launched in April 2022 but failed and a pullback was launched.

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AUDNZD

1. Wall Street dropped hard during the first session after a long weekend. S&P 500 dropped 2.00%, Dow Jones moved 2.06% lower, Nasdaq plunged 2.50% and Russell 2000 slumped 2.70%.
2. While US stocks launched the day in bad moods, declines accelerated after solid US data (services PMI coming back above 50) boosted USD and Treasury yields, with 10-year rate climbing above 3.9%.
3. Indices from Asia-Pacific traded lower as well but scale of the drop was smaller. Nikkei dropped 1.3%, S&P/ASX 200 traded 0.3% lower, Kospi slumped 1.7% and Nifty 50 declined 1%. Indices from China traded 0.2-0.8% lower.
4. DAX futures point to a flat opening of the European cash session today.
5. NZD gained after RBNZ delivered a 50 bp rate hike, putting cash rate at 4.75% - the highest level since late-2008. Majority of economists expected such a move but there were some calls for 25 bp hike or even pause following a recent cyclone hit.
6. RBNZ signaled need for more rate hikes and confirmed its peak rate forecast at 5.50%.
7. AUD weakened following disappointing data for Q4 2022. Wage index increased by 0.8% QoQ (exp. 1.0% QoQ) while construction work completed dropped by 0.4% QoQ (exp. +1.5% QoQ).
8. Cryptocurrencies trade mostly lower - Bitcoin drops 1.6% while Ethereum and Dogecoin decline 1% each. Litecoin bucks the trend and gains 1%.
9. Energy commodities are pulling back amid overall increase in risk aversion - Brent drops 0.3%, WTI trades 0.4% lower and US natural gas prices plunged 2.5%.
10. Gold and silver trade little change while platinum and palladium jump around 0.8% each.
11. NZD and JPY are the best performing major currencies while AUD, CAD and USD lag the most.

AUDNZD is plunging today amid a mix of NZD-positive and AUD-negative news. The pair pulled back from the resistance zone marked with 61.8% retracement and plunged back below recently-broken 200-session moving average (purple line). AUDNZD is attempting to make a break below the zone marked with 50% retracement, which would pave the way for a test of 1.0870 area, marked with 38.2% retracement.

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Economic Calendar: FOMC Minutes, German IFO

1. European indices set for flat opening of the cash session
2. FOMC minutes due at 7:00 pm GMT
3. German IFO data for February, Nvidia earnings

European stock market indices are set to open little change compared to yesterday's cash session closing levels. This comes after a downbeat US session yesterday and in Asia today. Nevertheless, moods look to have calmed down a bit as we head into a new trading day. Risky assets, like commodities or cryptocurrencies, are pulling back while precious metals trade a touch higher. NZD is G10 top performer following RBNZ rate hike while AUD lags the most after disappointing Q4 data.

Economic calendar for the day ahead is light but includes some interesting releases. FOMC minutes release is a key macro event of the day. Powell has been rather hawkish at its latest meeting and investors are eager to see details of discussion. Apart from that, traders will also be offered German IFO indices for February and API print on US oil inventories. RBNZ Governor Orr is set to speak in the evening while Nvidia is scheduled to report earnings after Wall Street close

1. 9:00 am GMT - Germany, IFO index for February. Expected: 91.2. Previous: 90.2
2. 9:00 am GMT - Italy, CPI inflation for January. Expected: 10.1% YoY. Previous: 11.6% YoY
3. 7:00 pm GMT - FOMC minutes
4. 9:40 pm GMT - API report on US oil inventories. Expected: +1.1 mb. Previous: +10.51 mb
5. Central bankers' speeches
6. 7:10 pm GMT - RBNZ Governor Orr
7. 10:30 pm GMT - Fed Williams

Top Wall Street earnings reports

1. Baidu (BIDU.US) - before market open
2. TJX (TJX.US) - before market open
3. NVIDIA (NVDA.US) - after market close
4. Lucid Group (LCID.US) - after market close
5. Etsy (ETSY.US) - after market close

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NZDUSD

New Zealand dollar is the top performing G10 currency today. Strength of NZD is driven by the rate hike announced by the Reserve Bank of New Zealand earlier today. RBNZ delivered a 50 basis point rate hike. While the decision was in-line with expectations of most economists, there were some concerns that RBNZ may decide to slow the pace of tightening following a recent hit from cyclone Gabrielle.

RBNZ Governor Orr said that there was barely any consideration for a 25 basis point rate hike as it is too early to determine impact of cyclone hit and that discussion was centered around a 50 bp rate move. RBNZ Chief Economist said that cyclone hit boosts demand for labour but it is possible that the build-back programme will exert upward pressure on inflation. Minutes showed that discussion was whether to hike rates by 50 or by 75 basis points. Ultimately, the official cash rate was increased by 50 bp to 4.75% - the highest level since late-2022. Moreover, the peak rate forecast was confirmed at 5.5% and it is expected to be reached Q1 2024. Interestingly, the cash rate forecast for June 2023 was cut from 5.4 to around 5.15%. While RBNZ sees need for more tightening ahead, it should also be said that Governor Orr noted that the Bank is still expecting recession in New Zealand in a 9-12 months period. Taking a look at NZDUSD chart at D1 interval, we can see that the pair has recently pulled back and tested the lower limit of a trading range in the 0.6200 area. A 50 bp RBNZ rate hike today helped the pair bounce off the 0.62 handle and while initially it looked like a recovery move may be launched, gain started to be erased as USD regained ground.

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BREAKING: German IFO Data Meets Estimates, DE30 Muted

German IFO Institute published the latest survey data for February today at 9:00 am GMT. Data came in mostly in-line with market expectations with headline Business Climate index reaching 91.1 (exp. 91.2). Current conditions subindex missed estimates by quite a big margin while Expectations subindex turned out to be slightly better than expected. However, as scale of deviations from median estimates was small, there were no major reactions on the market. EURUSD ticked lower while DE30 was flat following the release.

1. IFO Business Climate index for February: 91.1 vs 91.2 expected (90.2 previously)
2. Expectations: 88.5 vs 88.4 expected (86.4 previously)
3. Current Conditions: 93.9 vs 95.0 expected (94.1 previously)

DE30 barely saw any reaction to in-line IFO data. Index continues to trade near 15,300 pts price zone, that has limited recent downward moves.

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AUDUSD - A fall is possible.

If the assumption is correct, the AUDUSD pair will fall to the area of 0.6645 – 0.6524. In this scenario, critical stop loss level is 0.7008.
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NZDUSD - A fall is possible.

If the assumption is correct, the NZDUSD pair will fall to the area of 0.6008–0.5890. In this scenario, critical stop loss level is 0.6388. Solidecn.com
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XRPUSD

Last week, the XRPUSD pair attempted to grow within the framework of the general market trend and tested the upper limit of the Murray trading range, supported by the middle line of the Bollinger Bands in the area of 0.3906. Quotes have not yet managed to consolidate above this level, but if successful, the upward dynamics will be able to continue to the levels of 0.4150 (Murray level [+1/8]), 0.4330 (Fibo retracement 23.6%). The key for the "bears" is the 0.3662 level (Murray level [1/8], the middle line of the Bollinger Bands), consolidation below it will give the prospect of the price returning to the area of 0.3418 (Murray level [6/8]), 0.3174 (Murray level [5/8]).

Resistance levels: 0.3906, 0.4150, 0.4330 | Support levels: 0.3662, 0.3418, 0.3174

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AUDUSD

The Australian dollar is the worst performing G10 currency today, dragged down by disappointing macro data. Australia's seasonally adjusted wage price index rose by 3.3% YoY in Q4, after an upwardly revised 3.2% rise in Q3 and below analysts’ estimates of 3.5%. This was the highest reading since Q4 of 2012, amid further improvement in business conditions in the wake of the COVID pandemic. Wages in the private sector quickened to 3.6%, the highest since Q3 of 2012; while those in the public one accelerated to 2.5%, the highest since Q2 of 2019.

Meanwhile construction work completed dropped by 0.4% QoQ, well below market estimates of 1.5% rise, while Australia’s Westpac Leading Index marked -0.1% figure in January, the second time in a row. Also stronger-than-expected US economic data and hawkish remarks from policymakers also bolstered expectations the Fed would keep pushing interest rates higher to bring down inflation, weighing on the Aussie further. Today market attention will focus on the release of the latest FOMC monetary policy meeting minutes, due later during the US session, which may determine the short-term trajectory for the pair. From technical point of view, AUDUSD approaches a major support zone between 0.6810 - 0.6790, which is marked with previous price reactions and 78.6% Fibonacci retracement of the upward wave launched at the beginning of the year. Should break lower occur, sell-off may deepen towards the lower limit of the 1:1 structure at 0.6725 or even January lows at 0.6688. Nevertheless as long as price sits above the aforementioned support zone, another upward impulse may be launched towards local resistance at 0.6870.

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Crude Oil - Price pressure remains, but downside prospects are limited

Pressure on quotes is exerted by expectations of the publication of the minutes of the February meeting of the US Federal Reserve: investors are afraid to see hints that the regulator will continue to raise interest rates for a longer period and lead them to higher peak values than previously thought, and in this case, the risks of a decline in the US economy and declining energy demand may rise. Also, fears of a lack of supply due to the limited supply of Russian oil to the market have subsided slightly, which does not contribute to strengthening the asset. According to experts, despite official Moscow's intention to cut crude production by 500,0K barrels in March, the bulk of sales will remain, as they have been redirected from the European market to the Asian one, and a significant deficit is not expected soon.

In the long term, experts hope for the recovery of the Chinese economy, which can significantly increase demand for hydrocarbons: thus, yesterday, the Chinese authorities announced that this year, the country expected a significant increase in domestic tourism, revenues from which could amount to 4.0T yuan (about 580.8B dollars), up 95.0% from 2022. So, short-term negative factors pressure the oil market while the fundamental picture remains positive. The trading instrument is within the medium-term ascending channel, dropping below 82.81 (Murrey level [5/8]), which opens the way for a further decline to 80.00 (lower limit of the ascending channel, the lower line of Bollinger bands) and 78.12 (Murrey level [1/ 8]). A reverse breakout of 84.38 (Murrey level [6/8], the middle line of Bollinger bands) will ensure the resumption of growth to 87.50 (Murrey level [8/8]) and 90.62 (Murrey level [+2/8]).

Resistance levels: 84.38, 87.50, 90.62 | Support levels: 80, 78.12

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US500 Fell Slightly after Minutes

Markets unimpressed by latest FOMC minutes

Minutes from the latest FOMC meeting were hawkish but investors were expecting this narrative. The document did not present many new information regarding further steps that the FED intends to take regarding fiscal policy. Almost all FOMC participants agreed that it was appropriate to raise the target range for the federal funds rate by 25bps at the first monetary policy meeting of 2023, although a few officials favored raising it by 50bps. Minutes release taking into account hawkish tone led to small pullback on equity markets and appreciation of USD dollar.

Below you can find key takeaways from the document:

1. A few participants favored raising rates by 50 basis points
2. Several participants advocated raising interest rates by 50 basis points.
3. Some participants predicted an increase in the likelihood of a recession in 2023.
4. Participants stated that the continued tight job market would contribute upward pressure to inflation.
5. Participants said that inflation in last three months has eased, but they need to see more progress.
6. All participants agreed more rate hikes needed to achieve federal open market committee's job, inflation objectives.
7. Upside risks for inflation, including China's economic reopening and Russia's war in Ukraine.

US500 pulled back slightly after today's Minutes, however continues to trade above major support at 4000 pts.

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USDCAD - Growth is possible.

If the assumption is correct, the USDCAD pair will grow to the area of 1.3691–1.3850. In this scenario, critical stop loss level is 1.3440.
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USDCHF - Growth is possible.

If the assumption is correct, the USDCHF pair will grow to the area of 0.9455 – 0.9600. In this scenario, critical stop loss level is 0.9213.

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US100

US indices finished yesterday's trading mixed. S&P 500 dropped 0.16%, Dow Jones moved 0.26% lower, Nasdaq gained 0.13% and Russell 2000 added 0.34%.
FOMC minutes triggered a hawkish reaction on the markets, with USD gaining somewhat and indices slashing gains. Document noted that a few FOMC members opted for a 50 bp rate hike and that all members agreed more tightening is needed.

1. Indices from Asia-Pacific traded mixed today. S&P/ASX 200 dropped 0.4%, Kospi moved 0.8% higher while Nifty 50 traded flat. Indices from China traded 0.2-0.4% lower.
2. DAX futures point to a slightly higher opening of the European cash session today.
3. Fed Williams said that demand is still exceeding supply and that monetary policy must ensure that balance is restored. Williams said that 2% inflation is foundational target.
4. RBNZ Governor Orr said that cyclone-related price pressures may require higher rates to be kept for longer. Orr also said that a large inflationary shock would be needed for RBNZ to return to 75 bp rate hikes.
5. Australian capital expenditures increased 2.2% QoQ in Q4 2022 (exp. +1.0% QoQ).
6. API report pointed to a 9.89 million barrel build in US oil inventories (exp. +1.1 mb).
7. Nvidia rallied almost 9% in the after-hours trading, following the release of earnings report for November 2022 - January 2023 period. Revenue reached $6.05 billion (exp. $6.00 billion) while adjusted EPS came in at $0.88 (exp. $0.81). Company expects revenue to reach $6.5 billion in February - April period, above Wall Street estimate of $6.33 billion.
8. Cryptocurrencies are trading mostly higher - Bitcoin gains 1.1%, Ethereum adds 1.8% and Tezos jumps over 5%.
9. Energy commodities trade mixed - Brent and WTI trades 0.3-0.4% higher while US natural gas prices drop 0.2%.
10. Precious metals catch a bid amid USD weakening - gold gains 0.4%, silver adds 0.7% and platinum jumps 1%.
11. NZD and AUD are the best performing major currencies while USD and JPY lag the most.

Nasdaq-100 (US100) trades within a short-term downward channel. Index took a hit yesterday following release of FOMC minutes but managed to find support at 200-period moving average (purple line, H4 interval) and climbed back above the price zone marked with 38.2% retracement of the upward move launched in late-December 2022.

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