26 Feb, 2024

US Data in Focus: Traders Should Prepare for Higher Volatility

US Core PCE Price Index data in Focus this week
US Core PCE Price Index data in Focus this week

The week ahead is likely to be volatile as there will be several key publications from the United States. The main data release will be the US Core PCE Price Index, which will be published on Thursday, February 29 this time. According to economists’ predictions, a change in the price of goods and services purchased by customers excluding food and energy will speed up to 0.4% from 0.2% which was set in January.

This data is likely to influence the Fed’s mood on the upcoming rate cuts. While there is no exact date still, the FOMC plans to start monetary policy easing six months after the officials see good inflation data figures. 

Other key US data releases this week include:

  • Consumer confidence. According to the latest forecasts, the US consumer confidence index is likely to stay still at 114.8;
  • Prelim GDP q/q. Quarterly economic growth in the US is expected to be without changes as well at 3.3%;
  • ISM Manufacturing PMI. Economists expect the US manufacturing activity index to hit 49,5 this week;
  • Revised UoM Consumer Sentiment. Last but not least, the Revised UoM Consumer Sentiment data will be released this week. Experts forecast the index to stay at 79.6.

The Reserve Bank of New Zealand Meeting

The RBNZ meeting is another important event this week to focus on. The central bank’s officials have hiked rates to 5.50% on May 2023 and they remained unchanged since. The inflation expectations in New Zealand remain modest as the yearly inflation is 2.50% currently, which is close to the 2% target inflation set by the RBNZ. 

With this in mind, the Reserve Bank of New Zealand can start cutting rates in the near future, but, according to forecasts, this time the officials are likely to make no changes in the monetary policy.

The Australian CPI Data

The Australian CPI will also be in focus this week. According to economists, yearly inflation in Australia is likely to speed up to 3.6% against the 3.4% which was marked in January. If the forecasts become true, then the RBA is unlikely to consider the monetary policy easing during the next meeting. 

German Prelim CPI m/m

The next important data release to watch this week is German monthly inflation data that is published on Thursday, February 29. According to economists, German CPI m/m is likely to accelerate and hit 0.5%, which can be a signal for the European Central Bank to stay on their current rate positions during the upcoming ECB meeting in March. 

EUR/USD Weekly Review

The EUR/USD currency pair is traded above the ascending trendline on the hourly chart. The currency pair has recently tested the support line at 1.0815 and targets 1.0871, which is the closest resistance level. EUR/USD is likely to break the resistance in the near future to move higher and try to hit 1.0932. The uptrend means that buying the currency pair or buying a Higher contract is preferable. However, you shouldn’t forget about the correction as EUR/USD is likely to reach the ascending trendline again before moving higher.

If we move down to the 5-minute chart you can see that the price is in a sharp uptrend, which means that long positions are preferable. However, keep in mind that the downside correction can start at any moment as the price deviates from the trendline. 

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