one royal market analysis

Wednesday, March 2nd, Market Overview

Awaiting the NFP and ISM Announcements 

In the US, all eyes will be on the Nonfarm Payrolls for the month of January, released on the first Friday following the reported month. This report is considered the most important indicator for forex traders. The change in the number of positions is correlated with the performance of the economy, this performance is monitored by the policymakers.

A reading below 400k will be considered bearish for the USD; however, a reading above this estimated number will be considered bullish for the USD. Another report that will have an impact on the market is the ISM Services PMI due for release on Thursday. It reveals the current conditions in the US service sector, which has historically been a large GDP contributor.

A reading below 61 will be considered bearish for the USD; however, a reading above the estimated number will be positive for the USD. 

Geopolitical Developments in the Euro-Zone 

In the Euro-zone, all eyes will be on the Retail Sales report, which will be released on Friday. It captures a measure of changes in sales of the Eurozone retail sector. the measure of changes in sales of the Eurozone retail sector. It shows the performance of the retail sector in the short term. Per cent changes reflect the rate of changes in such sales. A reading below 9.1% will be considered bearish for the euro; however, a reading above the estimated number will be considered bullish for the euro.

In addition, the negative impact of the prolonged Russia-Ukraine war on the global economy and inflation euro currency met heavy selling pressure on Tuesday. Investors’ concerns grow increasingly, ahead of the second round of peace talks. The latest update shows that regardless of the harsh sanctions imposed by the west Russia continues to ramp up its aggression against Ukraine. In short, this war is likely to have a stronger impact on the euro area and the US economy. 

Oil Spike & the Canadian dollar 

In Canada, The Bank of Canada (BoC) is set to hike rates by 25bp today. Fears about supply disruptions from Russia’s invasion of Ukraine pushed oil prices to the highest since 2014 and benefitted the Canadian dollar. The spike in oil and gas prices is set to further underpin Canada’s economic momentum and will infuse some volatility around the major and crosses’ pair. 

Technical outlook 

EURUSD Price Forecast 

Technical outlook 

From a technical perspective, a break below the 1.1080 regions will make this pair face renewed pressure if buyers fail to defend this level. Failure to defend the support level could pave the way toward 1.1000. On the flip side, bulls will be initiated after a break above the 1.1100 regions. Resistances are located at 1.1150, 1.1180 and 1.1220. 

USDCAD Price Forecast 

Technical outlook 

A convincing break below 1.2600 will be seen as a fresh trigger for bearish traders and make this pair vulnerable. The downtrend trajectory could drag the price to the next support at 1.2560. Finally, a break below the mid-1.2500 will slide to challenge the 1.25000 psychological mark.

On the flip side, a break above the 1.2800 mark would set the stage to move back to last week’s high at the 1.2880 zone. A break above this level will lead to the next resistances at 1.2900 and 1.2960. 

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.

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