XAUUSD DOWNWARD MOMENTUM ACCELERATES AS SAFE-HAVEN DEMAND WANES

The Australian dollar held steady on Tuesday after the latest minutes by the Reserve Bank of Australia (RBA). In the minutes, the bank’s officials warned about the impacts of the Ukraine crisis but insisted that they will only hike interest rates when inflation remains sustainably between 2% and 3%. The currency also reacted to the latest economic data from Australia. The numbers revealed that the country’s economy is doing well. Retail sales rose by 6.7% while industrial production jumped to 7.5%. Still. There are concerns about the rising number of Covid cases in the country.

The British pound tilted higher after the latest jobs numbers from the UK. The unemployment rate declined from 4.1% in December to 3.9% in January. This decline was slightly better than the median estimate of 4.0%. It was also the lowest it has been since the pandemic started. Further data showed that the average earnings excluding bonuses rose from 3.7% to 3.8%. With bonuses, wages rose from 4.6% to 4.8%. Therefore, since inflation is also rising, there is a likelihood that the Bank of England will implement another rate hike this week.

The EURUSD pair was little changed after the weak Eurozone industrial production data and the strong American PPI data. According to Eurostat, the bloc’s industrial production dropped from 1.3% in December to 0.0% in January. On a year-on-year basis, production declined by 1.3%. Additional data by ZEW showed that the economic sentiment dropped to -38.7 in February as the crisis in Ukraine continued. Meanwhile, in the United States, the producer price index (PPI) rose from 9.7% to 10%, meaning that inflation remains stubbornly high.

AUDUSD

The AUDUSD pair rose to a high of 0.7210, which was slightly higher from the intraday low of 0.7164. On the four-hour chart, the pair moved above the 50% Fibonacci retracement level. It also moved below the 25-day and 50-day moving averages. The Williams %R has also moved from above the oversold level while the MACD has moved below the neutral level. Therefore, the pair will likely keep rising during the American session.

EURUSD

The EURUSD pair was little changed after the latest US PPI and EU industrial production data. This performance is likely because of the upcoming Fed decision. The pair is trading at 1.100, which is along the 25-day and 50-day moving averages. It has also moved slightly above the 23.6% Fibonacci retracement level. Therefore, the pair will likely remain in this range during the American session.

XAUUSD

The XAUUSD pair continued its downward trend as demand for safe havens declined. The pair is trading at 1,916, which was the lowest level since March 2nd. It has moved below the 25-day moving average while the Relative Strength Index (RSI) have dropped to the oversold level. It also retested the key support at 1,915, which was the highest point on February 15. Therefore, the pair will likely keep falling ahead of the FOMC decision.