Last Week’s Market Overview
The New Zealand dollar performed well before Thursday, but the bears took over the market at the end, pulling it to a level lower than its weekly opening price.
At the beginning of the week, NZD extended its surge. During the RBNZ meeting on Wednesday, it remained the key monetary policies unchanged, holding the official cash rate at 0.25% and the Large Scale Asset Purchase program at 100 billion NZD. Despite signalling the exchange rate was too high that might hamper the effectiveness of stimulus, the NZD skyrocketed again after a small retracement.
Surprisingly, NZD plummeted due to the strong risk-off sentiment on Thursday and Friday. It by 0.80% and 1.91% respectively on these two days, and finally declining by -0.88% in a week.
The US stocks endured roller roaster ups and downs in the previous week.
The S&P 500 Index firstly pulled back to 3805.00 in the first two days, but it then rallied to the resistance at 3875.00. On Wednesday, the Fed Chairman Powell said that the price pressure would be moderate and several years were needed for inflation to rise to 2%, the worries on quick increase in inflation thus relieved a lot, pushing the S&P 500 to 3930.00.
However, the S&P 500 suffered from the worst one-day loss since 2021 on Thursday amid the yield rate of U.S. 10-year Treasury note surpassing the S&P 500’s dividend yield. The risk-off sentiment continued to rule the market on the next day and the index suffered from a 2.45% slump last week.
Market Change Last Week
Market Focus This Week
Non-Farm Payrolls Report
The U.S. Bureau of Labor Statistics is going to release February nonfarm payrolls report on next Friday (3 March, 2021).
The COVID-19 battle in the US has seemingly turned a corner since early January, the December’s lockdown measures thus have been eased recently. Moreover, the $1.92 trillion coronavirus relief plan has been approved by the House Budget Committee and vaccination is processing well underway. Therefore, there is a tone of optimism in the market.
From the table above, the market has a quite positive forecast on February nonfarm payrolls, expecting a 110-thousand increase in a month. Nonetheless, the attitude for unemployment rate and average hourly earnings is much more conservative, predicting a 0.1% increase and 0.3% drop respectively.
The investors who want to trade by forecasting the outcome of the figures before the release could pay attention to some other leading economic indicators. In March, the ISM manufacturing and services PMI, and ADP report are published earlier than the nonfarm payrolls. They will be updated on Monday (1 March, 2021) and Wednesday (3 March, 2021). Investors may find some hints about the economic situation of February from the data and help to make a more reasonable and accurate prediction.
Nasdaq Index (D)
The strong rally of Nasdaq Index came under pressure last week, posting its worst week since November by falling 4.92%.
From technical perspective, the outlook is a bit negative in the near future since the fast MA has just crossed the slow MA from above and the RSI holds below 50. However, the uptrend may continue in long term as the price is still confined well within the uptrend channel and the golden cross is kept in the weekly chart.
Therefore, even though the long-term uptrend has not been damaged, the retracement is supposed to occur in coming few days/weeks. The index is likely to fluctuate from 13000 to 14200 for a period of time before another breakout.
Support: 13000.0, 12000.0, 10500.0
Resistance: 14200.0, 15000.0
The gold price continued to decline last week, dropping by almost 2.8% due to the spike in the treasury yield.
Technically, both two-line MA and RSI give a bearish signal as the death cross persists and the reading of RSI remains under 50-mark. According to the daily chart, the price has swung between 1765.0 and 1965.0 since late November, forming strong resistance and support at these levels.
All in all, the XAU is likely to go further south in longer run, but it has just broken below the support of sideways trend, the breakout has not yet been confirmed. Therefore, it may challenge the resistance at 1965 in coming few days. If it fails to return into the swing range, the downtrend will be resumed.
Support: 1689.0, 1550.0, 1445.0
Resistance: 1765.0, 1850.0, 1965.0, 2075.0
The Australian dollar pulled back significantly last week, depreciating 2.04% against USD.
For the technical aspect, the outlook for AUD is still indecisive. The two-line MA tends to form a golden cross and the RSI is lying on 49.87 now. Moreover, it is close to the lower support of the uptrend channel.
As a result, the coming week is crucial for determining the future path of AUD. If the Aussie can climb up to above 0.7800, the uptrend is highly possible to sustain. Otherwise, the uptrend may be stopped and AUD may test lower support at 0.7560.
Support: 0.7560, 0.7400, 0.7000
Resistance: 0.7800, 0.8010
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