Two trades to Watch: EUR/GBP, NASDAQ

EUR/GBP rises ahead of inflation data

Eurozone inflation is expected to cool to 8.2% YoY
German, Spain & France inflation were hotter than forecast
EUR/GBP looks towards 0.89

EUR/GBP is falling for a third straight day as investors digest the latest comments from BoE Governor Andrew Bailey and look ahead to eurozone inflation data.

Eurozone inflation is expected to cool to 8.2% YoY in February, down from 8.6% in January. Core inflation is expected to hold steady at 5.3% after unexpectedly taking higher in the previous month.

The data comes after German French, and Spanish inflation unexpectedly increased in February. The hotter-than-forecast inflation piles pressure on the ECB to continue hiking interest rates aggressively. A 50 basis point rate hike in March is looking increasingly likely.

The minutes of the February ECB meeting will be released and will be scrutinized for clues about the inflation outlook and the future path of monetary policy. ECB’s Christine Lagarde is also due to speak.

Meanwhile, the pound is struggling as Brexit optimism fades and after BoE Governor Andrew Bailey raised questions over whether the BoE will hike rates again in March. BoE chief economist Huw Pill is due to speak later.

Where next for EUR/GBP?

EURGBP has rebounded off the 100 sma, rising back into the multi-month rising channel and above the 50sma. This, combined with the RSI above 50 keeps buyers hopeful of further upside.

Buyers will look to take out resistance at 0.89, yesterday’s high, to extend gains towards 0.8930, the February 17 high, creating a higher high. Beyond here, 0.8980 comes into focus.

On the flipside, sellers could look for a break below the 50 sma at 0.8835 and the rising trendline support at 0.88. A break below the 100 sma at 0.8750 and this week’s low is needed to create a lower low and bring 0.8720, the 2023 low into focus.

Nasdaq breaks below the 200 sma ahead of jobless claims data

Hawkish Fed commentary
US jobless claims expected to remain 200k
Nasdaq below 200 sma

US stocks ended the session lower yesterday, and futures are falling again this morning as investors fret over interest rates for longer.

Hawkish Fed bets were boosted by Fed Atlanta President Raphael Bostic, who said that interest rates need to rise to 5.25-5.5% and remain there until 2024; Fed President Kashkari also highlighted that inflation in the US is still very high, and the risk was under tightening rather than overtightening.

US ISM manufacturing data also fueled bets of higher rates after the prices paid sub-component rose to 51.3 in February, up from 44.5.

Looking ahead, US jobless claims will be in focus and are expected to highlight tightness in the labour market. Initial claims are forecast to remain under 200k at 195k, up modestly from 192k last week.

Where next for the Nasdaq?

The Nasdaq has been trending lower from 12900 reached at the start of the month, taking out support at 12215 and the 200 sma at 11900. This along with the RSI below 50 keeps sellers hopeful of further downside.

Sellers will look to test the 50 sma at 11780, with a break below here exposing the 100 sma at 11600, before bringing the 11200 support into focus.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.