Market Overview
Key economic releases this week will shape forex volatility and spreads, with traders closely monitoring the JOLTS Job Openings (USD) on March 12, Core CPI and CPI reports on March 13, and key Bank of Canada (BOC) policy announcements. On March 14, Core PPI, PPI, and Unemployment Claims will provide further insight into U.S. economic performance, followed by GDP (GBP) and Prelim UoM Consumer Sentiment on March 15.
With rate cuts on hold, concerns over U.S. economic resilience grow. The U.S. stock market is showing signs of slowing, with the S&P 500 down 2% YTD and the Nasdaq falling 6%. While the Dow Jones remains slightly positive at 42,802 (+0.6% YTD), the defensive sectors of healthcare and consumer staples lead, while technology and consumer discretionary stocks struggle under high valuations. The Atlanta Fed projects a Q1 GDP decline of -2.4%, signaling economic stagnation.
Market sentiment remains mixed. Nvidia, UnitedHealth, and IBM have seen gains, while Intel, Boeing, American Express, Walt Disney, and JPMorgan Chase face losses. The top 1% of U.S. taxpayers contribute significantly to the economy, meaning that stock market instability could amplify broader economic risks. If the stock market weakens further, forex liquidity and USD trading dynamics could shift, potentially reducing the dollar’s appeal as a reserve currency.
Market Analysis
GOLD
Gold prices remain range-bound following last week’s NFP report, showing indecisiveness as the dollar searches for direction. Price action forecasting suggests that gold is consolidating before a potential breakout, with safe-haven demand increasing amid market uncertainty.
The MACD is neutral, failing to provide clear directional movement, while the RSI remains in a stable range. However, price action still favors bullish momentum, as gold remains above the EMA200, which is acting as a key support level. Traders should watch for a price breakout confirmation before positioning for long trades.
SILVER
Silver is holding steady at 32.5177, mirroring gold’s price structure and benefitting from increased demand amid forex volatility.
The RSI is hovering near overbought levels, signaling potential for continued consolidation before further upside. The MACD shows limited selling pressure, despite a minor retracement. With the EMA200 acting as a strong support level, silver remains in a bullish trajectory. Until a definitive breakout occurs, traders should remain patient for optimal entry points.
DXY (US Dollar Index)
The dollar continues its downtrend, weighed down by weakening economic indicators and expectations of future rate cuts. The USD trading dynamics remain bearish, as job growth slows and consumer confidence wanes.
The MACD is showing increased bullish volume but has failed to reflect this in price action. Meanwhile, the RSI is frequently hitting overbought levels despite minimal price gains, indicating that sellers remain in control. The overall market structure favors further downside, with traders looking for selling opportunities as momentum continues to build.
GBPUSD
The British pound reached a new high last week but has since entered consolidation. The market remains indecisive as traders await key economic reports that could influence dollar strength.
The MACD and RSI are providing limited signals due to the current sideways movement. However, with upcoming major economic releases, the pair could experience volatility. Traders should remain cautious until a clear directional bias is established.
AUDUSD
The Australian dollar remains in consolidation, testing previous resistance levels while maintaining a bullish bias.
The MACD has crossed upward, signaling potential for renewed buying pressure, while the RSI remains stable. Price action remains near the EMA200, suggesting a continuation of the current range before a breakout occurs. Traders should look for a volatility-based strategy to capitalize on potential market shifts.
NZDUSD
The New Zealand dollar is maintaining its bullish structure but is currently facing resistance at key levels.
The MACD is approaching a bullish crossover, while the RSI remains low after nearing overbought levels in previous sessions. While price action remains unclear in the short term, the broader trend still favors a bullish continuation. Traders should monitor market sentiment for confirmation of further upside.
EURUSD
The euro remains in consolidation after posting a new high last week. Given continued dollar weakness, the euro remains in a bullish formation.
The MACD is showing minor selling pressure, but price action remains stable. The RSI is holding at lower levels, suggesting room for further bullish momentum. Traders should wait for a price breakout confirmation before entering new positions.
USDJPY
Despite recent weakness in the dollar, the yen has remained in a consolidation phase.
The market continues to discount future Bank of Japan (BOJ) rate hikes, with expectations for a potential policy adjustment in May. The MACD is signaling a potential bullish shift, while the RSI remains elevated, suggesting that the pair may still experience selling pressure. Until a breakout occurs, traders should remain neutral on the pair.
USDCHF
The Swiss franc is trading sideways, failing to gain its usual safe-haven demand amid market uncertainty.
The MACD is rising slightly, but the RSI is signaling overbought conditions, suggesting limited buying interest. Given current market conditions, traders should monitor for increased demand before taking a position in the franc.
USDCAD
The Canadian dollar continues to struggle for direction, with price action reflecting consolidation.
Price action remains at the EMA200, with the MACD indicating increased bullish volume, while the RSI remains neutral. The market remains uncertain, and consolidation is expected to continue. While a bullish reversal remains a possibility, traders should wait for a clear breakout before entering new trades.
COT Reports Analysis
- AUD – WEAK (5/5)
- GBP – STRONG (5/5)
- CAD – WEAK (5/5)
- EUR – WEAK (1/5)
- JPY – STRONG (5/5)
- CHF – WEAK (3/5)
- USD – STRONG (4/5)
- NZD – WEAK (5/5)
- GOLD – STRONG (3/5)
- SILVER – STRONG (4/5)
Conclusion
As key economic data releases approach, traders should focus on price breakout confirmation, momentum trading setups, and volatility-based strategies to navigate uncertain market conditions. Gold and silver remain strong buy candidates, supported by bullish technical indicators, while the U.S. dollar’s ongoing weakness presents potential selling opportunities across forex pairs.
The stock market’s performance remains a critical factor in assessing the broader economic outlook, with a potential slowdown increasing the likelihood of future Fed rate cuts. By employing range breakout techniques and momentum-based strategies, traders can take advantage of emerging trends while managing risk effectively.
