Markets Week Ahead: USD, Euro and Gold Eye Inflation Data, Sterling Supported – DailyFX

General sentiment soared over the past week, dominated by Nvidia’s impressive results and encouraging guidance for Q1 2024. The chipmaker helped the S&P 500 reach an all-time high again, with Japan’s benchmark index also achieving the same feat for the first time in his 34 years.

Oddly enough, high market sentiment led to a rise in gold while the dollar tried to stabilize. If January’s PCE inflation data is better than expected, the dollar will likely continue to weaken, which is likely to fuel a bullish recovery in gold.

Sterling has performed well over the last week and the currency is likely to remain supported overall as there is little “major impact” data going forward. The euro’s recent attempt to strengthen against many G7 currencies appears to be waning, as last weekend’s price action suggests fatigue.

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Technical and fundamental forecasts – including February 26th

British pound weekly forecast: No good news for bulls

GBP/USD is holding firmer than the UK data alone suggests the market is confident a rate cut is near. This theory should support the pound in a data-rich week.

Euro weekly forecast: central bank authorities delay interest rate cutting cycle

ECB Governing Council members reiterated the lack of urgency to cut interest rates despite improved wage growth data. The lack of euro bullish factors suggests weakness.

Gold (XAU/USD) price struggles for direction, silver (XAG/USD) appears to be in the box

Weekly gold candlesticks are showing a limited range at just $25 as the precious metal looks for an impetus to break out of its current lethargy.

USD Forecast: US PCE guides market.Settings for EUR/USD, GBP/USD, and USD/JPY

This article explores the technical outlook for three major US dollar pairs: EUR/USD, GBP/USD, and USD/JPY. This article also discusses potential market scenarios ahead of key US PCE data.

Key risk events for the coming week

First, Japan’s inflation statistics could further impact the yen if price pressures intensify following the recent downward trend, raising questions about one of the two conditions for the Bank of Japan’s policy normalization. ing. While this could be bullish for EUR/JPY, this comes with complications as Japan’s Ministry of Finance could introduce currency intervention at any time.

The Reserve Bank of New Zealand (RBNZ) is due to issue an update on monetary policy on Wednesday with a 30% chance of seeing further interest rate hikes. Inflation has not fallen as quickly as expected, and market expectations only call for a first rate cut in November.

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Germany’s unemployment and inflation figures for February have been released after the Bundesbank suggested the country may already be in recession.

The biggest focus this week seems to be on US statistics. Reconfirming US Q4 GDP could result in intraday fluctuations, but a major reaction is unlikely unless there is a significant deviation from initial forecasts. And on Friday, his US PCE data could provide another key piece of the inflation puzzle, influencing bets on interest rate cuts and thus the US dollar.

China’s manufacturing PMI data will also be released on Friday, and recent support measures appear to be supporting the unfavorable Chinese market.

Stay up to date with the latest market news and analysis, as well as the current market-driving development themes.

— Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnow