A Calm End to the Month

Tuesday starts with the rise of the dollar again, but the technical situation has changed. After yesterday’s weakness, there is a good chance for a continuation of the correction. For example, on the EURUSD, there is a bullish engulfing pattern on the daily chart, which usually can be considered a strong buy signal. From a technical point of view, it would be nice to wait for an additional breakout above the 38.2% Fibonacci, which would serve as additional bullish confirmation.

In commodities, we can see further weakness in precious metals. Gold starts the day on the back foot with an appetite to reach new mid-term lows. This is also the case for silver, which has had no bullish activity since February 2nd. Oil is trading mostly sideways, but we are still close to the local lows, indicating that the bearish sentiment is still here and going nowhere.

Today’s calendar is quite busy. We have already seen better-than-expected retail sales numbers from Japan and Australia. The key data today will be the GDP number from Canada, where no change (0.0%) is expected. Another important figure will be the CB Consumer Confidence number, which is expected to come in at 108.5. Overnight, we received comments from the BoJ Deputy Governor Nominee Uchida, who claimed that various side effects are emerging due to prolonged monetary stimulus, but that the BoJ should not review its easy monetary policy just because of those side effects. Finally, he said that the BoJ has to firmly support the economy with easing. The yen continues its bearish trend, which started at the beginning of the month.