This Week: EURUSD consolidates at 200-SMA, busy week ahead!

EURUSD has been trading around its 200-day simple moving average (SMA) which sits at 1.0828.

Above here is a major retracement Fibonacci level (38.2%) of the fourth quarter rally at 1.0875.

That tallies with a recent swing high and also the 50-day moving average. Support is 1.0793, the 50% mark of that move.

The world’s most traded currency pair is likely to be volatile this week, as there are major risk events in the form of the ECB meeting, Fed Chair Jerome Powell testimony, the monthly US non-farm payrolls report and others (check the list below!).

Rate cuts bets have been slashed in recent weeks so it’s a pivotal week for current bets.

Events Watchlist:
 

• Wednesday, March 6th: Bank of Canada (BoC) rate decision

The BoC is expected to keep rates at 5.0%, with the bank seen cutting by 75bps this year, less than the 105bps after the previous meeting. The macro picture has been mixed but there is a risk the BoC turns more dovish due to cooler inflation data. That would hurt the loonie and push USD/CAD decisively higher above 1.36.
 

• Thursday, March 7th: European Central Bank (ECB) rate decision

Rates will be kept unchanged so all eyes will be on the tone and language of the statement and press conference. Any hints on rate cut timings will be market moving. Current consensus on the Governing Council appears to be cautious, with wage data released after April pivotal for a decision on the start of policy easing.
 

• Friday, March 8th: US Non-Farm Payrolls Employment report

The monthly jobs report is likely to cool after the all-round stellar figures in January.  The headline is expected to add 190k jobs, down from 353k, while the jobless rate is seen unchanged at 3.7% and wage growth lower after the prior hot print.  There are currently three 25bp rate cuts priced in for 2024, matching the Fed’s forecast.

Here’s a comprehensive list of other key economic data and events due this week:

Monday, 4th March

• CHF: Consumer price index (CPI)
   
• USD: Philadelphia Fed President Patrick Harker speech
   

Tuesday, 5th March

• CNH: China National People’s Congress; Caixin services PMI
   
• EUR: Eurozone PPI
   
• GBP: BRC retail sales monitor; S&P global Services PMI (Final)
   
• USD: ISM Services PMI; Fed Barr speech; Factory Orders; RCM/TIPP Economic Optimism Index
   
• Super Tuesday in the United States
   

Wednesday, 6th March

• EUR: Eurozone Retail sales
   
• GBP: UK Chancellor presents annual budget
   
• CAD: BoC Interest Rate decision
   
• USD: Fed Chair Jerome Powell testimony; JOLTs Job Openings; Fed Beige Book
   

Thursday, 7th March

• CNH: Balance of trade; Forex reserves
   
• EUR: ECB Interest Rate decision; ECB Press Conference
   
• USD: Fed Chair Jerome Powell Testimony; State of the Union; Initial Jobless Claims
   

Friday, 8th March  

• CAD: Canada Unemployment Rate
   
• EUR: Eurozone GDP, Germany Industrial Production & PPI
   
• USD: Non Farm Payrolls; Unemployment Rate