This weekly data preview focuses on USOIL and XAUUSD, with upcoming economic data later in the week serving as the main market influencers for the short-term outlook.

Below, we look at the key factors impacting economic data this week.

Wednesday: 

• UK inflation rate at 7:00am GMT. The consensus is for a decline from 4% to 3.5% in February. If these forecasts hold true, it could mark the lowest yearly inflation figure for Britain and might lead to slight losses for the pound, potentially influencing the Bank of England’s decisions at its meeting the following day.
• FED interest rate decision at 6:00pm GMT is broadly expected to stay steady at 5.5%, with the probability of less than a 1% cut. Participants are focusing closely on what the comments of the central bankers in the subsequent press conference will be to get some hints as to the future direction of monetary policy.

• Japanese balance of trade at 11:50pm GMT, where the expectations are for a decline in the trade deficit from ¥-1,758.3bn to ¥-810.2bn for February. If the expectations are correct, then the yen could face some support against the currencies traded against it.

Thursday:

• The Bank of England decides on its interest rate at 12:00pm GMT. The general expectation is that the central bank will hold its rate stable at 5.25%. However, in the event that there is an interest rate hike, it could give some support to the pound across various pairs, particularly the US dollar. In the unlikely event of a cut though, it might have a negative effect on the British pound in the aftermath of the release.

• Japanese inflation rate at 11:30pm GMT. The expectation for February is that the rate could go up to 3% from the previous 2.2%. This might be somewhat bullish news to the market participants trading the yen.

USOIL, daily

Oil prices reached a four-month high due to lower crude exports from Iraq and Saudi Arabia, as well as signs of stronger demand and economic growth in China and the US. Iraq plans to reduce crude exports in the coming months to adhere to its OPEC+ quota, while Saudi Arabia’s crude exports decreased for the second consecutive month.

Stronger-than-expected economic growth in the US and robust demand for crude oil in China are contributing to the upward pressure on oil prices.

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On the technical side, the price is trading in a rather aggressive bullish trend and is currently testing the resistance of the upper band of the Bollinger bands. The 50-day moving average is trading well above the 100-day moving average, validating the bullish momentum in the market. However, the stochastic oscillator is trading in the extreme overbought levels, hinting that a correction to the downside might be imminent. However, the aggressive rally does not give much confidence to the bears. Without any significant signals of a reversal, the dominant scenario is for a continuation of the current move north. If this is confirmed in the upcoming sessions, then the first area of possible resistance might emerge near the $84 price region, which is the psychological resistance of the round number as well as the 61.8% of the weekly Fibonacci retracement level.

Gold-dollar, daily

As the FOMC meeting approaches, the price of gold is facing difficulties in attracting buyers and remains steady above a one-week low. Factors such as reduced expectations of a Fed rate cut, higher US bond yields, and a stronger USD (mainly due to the inflation data released last week that showed an uptick in the actual figure) are causing the gold price to perform lower.

Geopolitical tensions may offer some support to gold and could also limit its losses. Also, if we review the Commitment of Traders report, we can see a decline in the number of commercial traders, suggesting that the price of gold might fall. Commercial traders’ figures are inversely related to the price. This is because commercial traders like to buy at lower prices, leading to decreasing figures when prices are high. As a result, prices are pushed down in the short term.

From a technical point of view, the price has corrected from its all-time high of around $2,195 down to $2,155 where it currently trades. In yesterday’s session, the price found sufficient resistance on the 23.6% of the daily Fibonacci retracement level and is currently on the move to cover the bullish candlestick to continue its correction move to the downside. The stochastic oscillator is near its overbought levels, though it’s on the move to reach the neutral levels given that the bearish move continues in the short term. The Bollinger bands are still quite expanded, indicating that volatility is still high in the gold market, while economic data coming up later this week is broadly expected to create even more volatility, especially for the instruments traded against the dollar.

This article was submitted by Antreas Themistokleous, an analyst at Exness.

Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness or LeapRate.

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Today, the Fed has also released Economic Projections, which are carefully monitored by traders and investors.

GDP growth projection was raised from 1.4% to 2.1% for the year 2024. Next year’s GDP growth projection was also increased from 1.8% at December meeting to 2.0%.

Unemployment Rate is expected to be at 4.0% in 2024, compared to the previous projection of 4.1%. PCE inflation forecast remained unchanged at 2.4%, while Core PCE inflation projection was raised from 2.4% to 2.6%.

Importantly, the federal funds rate projection for 2024 remained unchanged at 4.6%. The dot plot shows that Fed expects three rate cuts in 2024.

The federal funds projection for 2025 was raised from 3.6% to 3.9%, which means that the pace of rate cuts would be slower than previously expected. In 2026, the Fed expects to see the federal funds rate at 3.1%, compared to the December projection of 2.9%.

Overall, projections do not look too hawkish. However, markets’ reaction would also depend on Powell’s comments during the press conference, which starts soon.

The price of Bitcoin, the flagship cryptocurrency, has suddenly managed to reclaim the coveted $65,000 level. It surged to $65,460 earlier today before paring some recent gains. 

Despite the recent dip, the price of the leading cryptocurrency is up roughly 25% over the past 30 days. 

Massive liquidations 

According to data provided by CoinGlass, more than $46 million worth of short positions have been liquidated over the past four hours. Roughly $12 million worth of short positions have been wiped out in the span of a single hour. 

However, the bulls still suffered a much bigger blow compared to the bears over the last 24 hours ($489 million and $150 million, respectively). 

The single largest liquidation over the last 24 hours surpassed a whopping $12 million.

Earlier today, the price of Bitcoin plunged to as low as $62,349, according to CoinGecko data. This coincided with Grayscale’s Bitcoin exchange-traded fund GBTC recording bleeding $643 million in a single day, its biggest outflow to date. BlackRock and Fidelity also recorded rather underwhelming inflows, which shows that the excitement surrounding Bitcoin ETFs is starting to wane.  

Bulls vs. bears

Multiple Bitcoin bulls, including influencer Anthony Pompliano, were quick to dismiss the severity of the recent correction, arguing that such dips are normal for bull market cycles based on available historical data.  

With that being said, some believe that the Bitcoin price has already topped based on the behavior of miners and the performance of mining companies ahead of the upcoming halving event.    

At press time, the Bitcoin price is down 12% from its current all-time high of $73,737 which was achieved on March 14. 

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Finance Magnates CY Limited

UK private rents surged by 9% in the 12 months to February 2024, marking the steepest increase since the Office of National Statistics’ records began in 2015.

Rent hikes were most pronounced in London, where they rose by 10.6%. , in contrast, dipped by 0.6% over the same period.

The London borough of  saw the highest annual rental growth of all local areas and Melton in Leicestershire saw the lowest.

Rental prices were highest in Kensington & Chelsea and lowest in Dumfries & Galloway.

“These new data show that UK rental prices continued to grow strongly in the year to February, at their highest annual rate since records began in 2015,” said ONS deputy director for prices Matt Corder.

“Average UK house prices continued to fall, albeit at a slower annual rate than seen recently. Indeed, Scotland’s average house prices rose at their fastest annual rate for more than a year.”

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European Central Bank (ECB) President Christine Lagarde emphasised on Wednesday that the bank’s approach to interest rate adjustments will not follow a predetermined schedule of cuts. Instead, decisions will hinge on evolving economic data. This statement comes amidst growing anticipation among ECB policymakers for reducing the current peak borrowing costs, with June eyed as a likely start.

Lagarde sought to temper expectations of a clear-cut path for rate cuts while acknowledging positive signs in recent wage and inflation trends. During a Frankfurt conference, she explained that “our actions will need to be informed by the latest data at each meeting without committing in advance to a fixed trajectory for future rates.”

Supporting Lagarde’s cautious stance, ECB Chief Economist Philip Lane highlighted the need to balance monetary tightening with observed shifts in core inflation and wage growth dynamics. The drop in eurozone inflation from double digits in late 2022 to 2.6% recently suggests a more sustained moderation in price increases, attributed to a likely reduction in core inflation excluding the more volatile food and energy sectors.

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For the ECB to consider reducing interest rates, Lagarde outlined specific prerequisites: a deceleration in wage increases, a continued decline in inflation rates, and new projections aligning with the ECB’s 2% inflation target. “Should the incoming data align sufficiently with our inflation projections, and assuming effective policy transmission, we could begin to ease our policy stance,” she stated.

The ECB has scheduled policy meetings throughout the year, including April 11, June 6, July 18, September 12, October 17, and December 12. The timing of rate cuts has been discussed among ECB officials, with some, like Latvia’s Martins Kazaks and the Netherlands’ Klaas Knot, favouring alignment with new economic forecasts typically released in June, September, and December.

Conversely, Greece’s central bank governor, Yannis Stournaras, suggested a more aggressive approach with two cuts before August and an additional two by year-end. Frederik Ducrozet, Head of Macroeconomic Research at Pictet Wealth Management, interprets Lagarde’s remarks as setting a foundational consensus among policymakers.