Forex Market Wrap: 17th February

Last week the market was dominated by US data including Consumer Price Index (CPI), Retail Sales and Producer Price Index (PPI). Investors were keen to see if inflation had turned considering the recent comments from the Federal Reserve. Fed Chairman Powell had commented on being in a deflationary environment by remaining flexible. They may have to be flexible now as investors will see this recent strong data as a move for the Fed to hike rates for longer. This caused the USD to strengthen this week in line with our week ahead analysis.

EURUSD

The price on the chart has traded through multiple technical levels and some observations included:

• Price rejected the key resistance of 1.0775.

• USD strengthened pushing price lower until the demand zone of 1.0650.

• If price holds at the demand zone we could expect a move back to the highs.

• Sellers would favour a move back higher for further entries short in line with coming USD strength.

GBPUSD

The price on the chart has traded through multiple technical levels and some observations included:

• Price traded as planned in line with the week ahead analysis.

• The daily chart shows the price closing back below 1.2200.

• Price fell lower towards targets of 1.1900.

• The daily 200 moving average offered support for traders on Thursday.

USDJPY

The price on the chart has traded through multiple technical levels and some observations included:

• Price traded as planned in line with the week ahead analysis.

• Price found support at the 131.00 level.

• Buyers then took the price to the next resistance zone of 134.50.

• Buyers could take profits around this area which could invite some short term selling.

GOLD (XAUUSD)

The price on the chart has traded through multiple technical levels and some observations included:

• Price traded lower towards the key support of $1800.00.

• The USD strength and fundamental pressures of the Fed having to hike for longer has seen Gold prices move lower.

• If price rallies we could see sellers re-enter the market.