Fed talk and key themes coming up - ANZ

Ross J Burland FXStreet

Analysts at ANZ explained the key themes ahead and recent Fed optimism.

Key Quotes:

"Perennial hawk Mester (voter) remains upbeat on the US outlook."

"New Fed Chair Powell said at his ceremonial swearing-in that they remain alert to any developing risks to financial stability. He added, “we are in the process of gradually normalizing both interest rate policy and our balance sheet with a view to extending the recovery.”"

"As watchers attempt to ascertain whether the recent bout of equity volatility is done and dusted or about to burst into broader risk aversion, risk havens provides clues. Overnight JPY and CHF strengthened, and gold prices did lift, but all in a fairly muted fashion."

"We expect the markets to continue to swing between risk-on and risk-off now a solid dose of uncertainty has been added to the trading mix. US CPI tomorrow (2:30am NZT) is the next big test for a market for whom upward inflation surprises have abruptly become A Bad Thing.

The market is expecting 0.2% m/m in CPI ex food and energy (1.7% y/y exp; headline CPI 1.9% y/y exp). One can be fairly confident that an upside surprise would not be taken well."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.