Fed Chair Powell Eases Inflation Fears

Equities Rebound as Powell Pushes Back on Inflation Concerns

The US dollar traded lower against the majority of the other G10 currencies on Wednesday and during the Asian session Thursday. It lost the most ground versus NOK, NZD, AUD, and CAD in that order, while it gained only against JPY. The greenback was found virtually unchanged versus GBP and CHF.

Euro Stoxx 50 — Technical Outlook

On Tuesday, after finding support near the 3643 hurdle, Euro Stoxx 50 reversed back to the upside and is now trading above a short-term tentative upside support line drawn from the low February 23rd. In addition to that, the index is back above all of its EMAs on our 4-hour chart, which might also strengthen the bullish case. The RSI and the MACD started showing positive momentum again, which also supports the upside idea. That said, given that the price is currently finding strong resistance near the 3720 barrier, marked by the high of February 19th, we would need to see a break of that barrier first, before getting comfortable with further advances.

NZD/USD — Technical Outlook

NZD/USD continues to trend higher, while balancing above a short-term tentative upside support line taken from the low of February 18th. But after yesterday’s steep upmove, the pair is correcting slightly lower this morning. Even if the rate does drift a bit lower, as long as it remains above that upside line, we will stay positive with the near-term outlook.

As for Today’s Events

Thursday’s agenda is relatively light. We only get the 2nd estimate of the US GDP for Q4, the durable goods orders for January, the pending home sales for the same month, and the initial jobless claims for last week. The 2nd GDP estimate is forecast to reveal a minor revision to 4.1% qoq SAAR from 4.0%, while durable goods orders are expected to have accelerated to +1.1% mom from +0.5%. However, the core rate is anticipated to have declined to +0.7% mom from +1.1%. Pending home sales are expected to have slid 0.1% mom after declining 0.3% in December, while initial jobless claims are forecast to have declined somewhat to 838k from 861k.



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