New bearish wave on the indices?
22 February 2023
Yesterday's calendar was busy and gave us a lot of key data, introducing more volatility to the market and resulting in several promising trading signals on major instruments. However, most major currencies lost their value yesterday, apart from the British Pound, which had one of the best days this year. The reason for that was the PMIs, which in both cases (Services and Manufacturing) came better than expectations, with Services one reaching 53.3 with the estimates at 49.2.
The PMI data helped the Pound, while other data hurt the Canadian Dollar. We learned about Canada's inflation and retail sales yesterday, and although CPI came pretty much in line with expectations, retail sales disappointed big time, dragging down the CAD. For USDCAD, we received a bullish breakout from the symmetric triangle pattern, which in theory, gives us a mid-term buy signal.
Today's calendar is not as busy as yesterday's, but we still have some quality events on it. New Zealand has already announced an expected interest rate rise, which after a 50bp hike is now 4.75%. NZD liked the statement and press conference coming along with the decision as currently, the NZD is the strongest currency among majors.
Later today, during the American session, we will get the FOMC Meeting Minutes and, 10 minutes later, the speech from the RBNZ Governor Orr. The first event can definitely spark some huge moves in the market, especially in dollars and indices. Speaking of indices, Tuesday was terrible for most of them and Wednesday does not look any better. American indices dropped sharply, breaking major supports. Unfortunately for the buyers, it looks like the start of another bearish wave.
As for commodities, it's quiet times for precious metals and bad times for oil. It seems that oil will soon test the lows for February, and buyers should not be too confident about the outcome of that test, as the main sentiment remains bearish.