Pound Sterling hit fresh weekly low on sustained US Dollar demand. GBP/USD traders look to S&P Global US and UK PMI data in the week ahead.                    Looking ahead, GBP/USD seems poised for a rebound but bearish potential remains intact. The Pound Sterling (GBP) continued to remain in the back seat against the US Dollar (USD), as GBP/USD extended its bearish momentum into the fifth week in a row. UK economic data fail to lift the Pound Sterling The price action around the GBP/USD pair was mainly driven by a host of top-tier economic data releases from the United States (US) and the United Kingdom (UK), which helped reprice the markets' expectations of a dovish policy pivot by the US Federal Reserve (Fed) and the Bank of England (BoE). The pair traded directionless at the start of the week on Monday, as traders moved on the sidelines and refrained from placing any fresh positional bets, in anticipation of the all-important US Consumer Price Index (CPI) data due on Tuesday. The UK labor market report was also published on Tuesday, which put a fresh bid under the Pound Sterling. Data released by the Office for National Statistics (ONS) showed on Tuesday, employment rose by 72K in the final three months of 2023 and the Unemployment Rate fell to 3.8% in the same period. Resilient pay growth and strong hiring backed the narrative of "higher interest rate for longer" by the BoE. However, hawkish commentary from the Fed officials combined with hotter-than-expected US inflation data reinforced the selling interest around GBP/USD. The annual CPI inflation in the US fell to 3.1% in January following a brief increase to 3.4% in December but outpaced forecasts of 2.9%. The US CPI edged up 0.3% MoM, the most in four months, and above forecasts of 0.2%. Hot US inflation report justified the Fed's pushback against early and aggressive interest rate cut expectations, triggering a fresh rally in the US Treasury bond yields and the US Dollar. In light of this, GBP/USD reversed sharply from the weekly high of 1.2688 to as low as 1.2575. The correction in the currency pair gained momentum on Wednesday after the annual CPI inflation in the UK remained unchanged at 4.0% in January, against the market forecast of an increase to 4.2%. Core CPI arrived at 5.1% YoY in the reported month, missing estimates of 5.2%. Softer UK inflation data dialed down odds of BoE interest rate cuts for this year. Markets now price about 70 basis points (bps) of BoE easing this year, down from about 100 bps seen a week ago. On the contrary, hot US CPI numbers made markets push back their expectations of a Fed policy pivot until June. Markets have almost priced out a March Fed rate cut while a lower than 50% chance of easing is seen for the May meeting. Downbeat US Retail Sales data capped the US Dollar upside, offering relief for the Pound Sterling on Thursday. This came after the Pound was heavily impacted by the confirmation of a technical recession in the UK. US Retail Sales declined by 0.8% in January, the US Census Bureau reported on Thursday, worse than the market expectations for -0.1%. Meanwhile, UK Gross Domestic Product (GDP) contracted by 0.3% in the three months to December, having shrunk by 0.1% between July and September. Despite a weak UK economic outlook, BoE policymakers remained quite optimistic and maintained the central bank's hawkish bias, offering legs to the tepid recovery in GBP/USD on Thursday. Pound Sterling buyers gave into the US Dollar resurgence, in anticipation of hot US Producer Price Index (PPI) inflation data and an improvement in the UoM Consumer Sentiment.  GBP/USD failed to capitalize on strong UK Retail Sales data on Friday. The UK Retail Sales rebounded 3.4% over the month in January vs. 1.5% expected and -3.3% reported in December, the latest data released by the ONS showed on Friday. Later in the day, the US Bureau of Labor Statistics announced that the Producer Price Index rose 0.9% on a yearly basis in January, compared to the market expectation for an increase of 0.6%. The Core PPI increased 2% in the same period to surpass analysts' estimate of 1.6%. The USD held resilient against its peers after these data releases and made it difficult for GBP/USD to stage a rebound ahead of the weekend. Week ahead: PMIs take center stage It's a relatively data-light week after a busy one, as the S&P Global PMI data from both sides of the Atlantic will draw attention. Also, it is a US holiday on Monday, in observance of Presidents' Day. The first half of the week is devoid of any high-impact macro data releases, and hence, Pound Sterling traders will...

Gold registered losses for the second consecutive week. The technical outlook suggests that the bearish bias remains intact. Sellers could take retain control in case $2,000 is confirmed as resistance. Gold declined for the second consecutive week, pressured by the recovering US Treasury bond yields and renewed US Dollar (USD) strength. Next week's economic calendar will feature February PMI data and FOMC Minutes. Whether or not $2,000 holds as resistance will also be key for XAU/USD's next directional action. Gold price turned south following hot US inflation data Gold edged lower at the beginning of the week and registered small losses on Monday. As investors refrained from taking large positions ahead of the key inflation data from the US, however, XAU/USD's action remained limited. The US Bureau of Labor Statistics reported on Tuesday that the Consumer Price Index rose 3.1% on a yearly basis in January. This reading came in above the market expectation of 2.9%. Additionally, the Core CPI, which excludes volatile food and energy prices, increased 3.9% to match December's print. As the CME FedWatch Tool probability of the Federal Reserve (Fed) leaving the policy rate unchanged in the next two policy meetings climbed above 60% after the CPI data, the benchmark 10-year US Treasury bond yield advanced to 4.3% and Gold declined below $2,000 for the first time in 2024. After gaining 0.7% on Tuesday, the US Dollar (USD) Index corrected lower and closed in negative territory on Wednesday. In turn, XAU/USD fluctuated in a tight channel at around $1,990 following the previous day's sharp decline. The data from the US showed on Thursday that Retail Sales fell 0.8% to $700.3 billion in January. Retail Sales ex Autos contracted by 0.6% in the same period. The 10-year US yield declined toward 4.2% after the disappointing data and allowed XAU/USD to recover back above $2,000 in the second half of the day. Commenting on inflation data, Fed Vice Chair for Supervision Michael Barr said policymakers are confident that inflation is on the path towards the 2% target. Barr, however, added that he would need to see "continued good data" before advocating for a rate cut. Gold failed to build on Thursday's recovery gains on Friday after producer inflation data from the US. The BLS announced that the Producer Price Index (PPI) for final demand rose 0.9% on a yearly basis in January. This reading followed the 1% increase recorded in December but came in above the market expectation of 0.6%. The annual Core PPI rose 2% in the same period, compared to December's increase of 1.8%. On a monthly basis, the Core PPI was up 0.5% following the 0.1% decline recorded in the previous month. The 10-year US yield climbed back above 4.3% with the initial reaction and made it difficult for XAU/USD to stretch higher ahead of the weekend. Gold price could react to PMI data next week Stock and bond markets in the US will be closed on Monday in observance of the President's Day holiday.  On Wednesday, the Fed will release the minutes of the January 30-31 policy meeting. In the post-meeting press conference, Fed Chairman Jerome Powell said that a rate cut in March was not likely but noted that an unexpected weakening in the labor market could make them consider a rate reduction sooner. The impressive January jobs report after the meeting caused investors to refrain from pricing in a March rate cut and didn't allow Gold to gain traction in the first half of February. At this point, investors are more interested in whether the Fed will wait until June to execute a policy pivot. Hence, the Fed's publication is unlikely to offer fresh clues regarding the timing of the rate cut. On Thursday, S&P Global will release the preliminary Manufacturing and Services PMI reports for February. An unexpected weakening in the private sector's business activity, with either of the headline PMIs dropping below 50, could revive expectations for a May rate cut and help XAU/USD gain traction with the immediate reaction. Investors will also pay close attention to comments regarding price pressures in the surveys. In case the input inflation in the service sector proves to be sticky, the USD could stay resilient against its rivals and limit the metal's upside even if the PMI readings disappoint. Gold technical outlook The Relative Strength Index (RSI) indicator on the daily chart stays below 50, suggesting that the bearish bias remains intact. However, sellers could refrain from betting on further Gold weakness after XAU/USD closed above the $2,000 psychological level on Friday, which is reinforced by the 100-day Simple Moving Average. In case $2,000 stays intact as support, $2,020 (Fibonacci 23.6% retracement of the October-December uptrend, 20-day SMA) could be seen as next resistance before $2,030 (50-day SMA).  If Gold returns below $2,000...

Markets on the rise as S&P 500 looks to close out sixth consecutive gain. UK retail sales helps allay fears after yesterday's GDP drop. US PPI in view, with jump in import prices highlighting risk of a secondary inflation push. European markets are in the green once again this morning with the German DAX hitting another fresh record high in early trade. The UK remains a key focus as retail sales data provides yet another consideration for traders that continue to process yesterday's slump into a technical recession. The release of inflation data out of the US earlier in the week provided an uphill battle for those hoping to see the S&P 500 clock in a sixth consecutive weekly gain. However, we are once again seeing investors buy the dip, with US indices looking primed for a positive end to the week. UK retail sales staged a dramatic bounceback in January, posting the largest monthly rise in trade since April 2021. Coming off the back of a concerning -3.3% December slump, this helps build a story that might justify yesterday's -0.3% Q4 GDP reading. Instead, it seems to be a case that we are seeing a shift in UK consumption, bolstering claims that Q1 will bring a welcome rebound in economic growth. The surge in both the value and volume of transactions served to highlight a relatively strong picture for demand, although this will have taken some of the pressure off the Bank of England after a week that saw lower-than expected inflation and growth. Looking ahead, US PPI inflation brings a final hurdle for markets, as we weigh up the potential for further dollar strength should producer prices start to pick up once again. Much like wages, producer prices provide a key gauge of underlying inflation pressures being felt by US businesses, with traders looking out for any signs of increased costs as Red Sea disruptions impact the cost of shipping globally. Coming off the back of yesterday's concerning surge in import prices that posted the biggest monthly jump in almost two-years, any additional signs of resurgent inflation pressures could lead to a renewed push higher for the US dollar.

EUR/USD stabilized above 1.0750 after posting gains for two consecutive days. Strong resistance seems to have formed at 1.0800. Producer inflation and consumer sentiment data will be featured in the US economic docket. EUR/USD stays in a consolidation phase above 1.0750 on Friday after closing the previous two days in positive territory. Although the pair's near-term technical outlook points to a buildup of bullish momentum, buyers could remain on the sidelines unless 1.0800 is flipped into support. Mixed macroeconomic data releases from the US and the positive shift seen in risk mood made it difficult for the US Dollar (USD) to hold its ground on Thursday and allowed EUR/USD to extend its recovery. Retail Sales in the US declined 0.8% on a monthly basis in January, while the weekly Initial Jobless Claims declined to 212,000 from 220,000.  Later in the day, the US Bureau of Labor Statistics will release the Producer Price Index (PPI) data for January. The PPI is forecast to rise 0.1% on a monthly basis following December's 0.1% decline. A negative monthly PPI print could weigh on the USD with the immediate reaction. On the other hand, an unexpected increase of 0.3% or bigger could provide a boost to the currency and force EUR/USD to stay on the back foot. According to the CME FedWatch Tool, markets are currently pricing in a near 70% probability of the Federal Reserve (Fed) leaving the policy rate unchanged at the next two policy meetings. The market positioning suggests that the USD could weaken sharply in case investors start leaning toward a policy pivot in May. EUR/USD Technical Analysis The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 and EUR/USD closed the last 5 4-hour candles above the 20-period and 50-period Simple Moving Averages (SMA), highlighting a bullish tilt in the short-term technical outlook. 1.0800 (Fibonacci 23.6% retracement of the latest downtrend, 100-day SMA, upper limit of the descending regression trend channel) aligns as critical resistance for EUR/USD. In case the pair rises above that level and confirms it as support, it could target 1.0830 (50-day SMA) and 1.0860 (200-period SMA) next. On the downside, immediate support is located at 1.0760 (50-period SMA) before 1.0730-40 (20-period SMA, mid-point of the descending channel) and 1.0700 (end-point of the downtrend, psychological level).

Gold price pauses its recovery early Friday, awaits key US inflation data. US Dollar bounces with Treasury bond yields, following weak US Retail Sales data-led decline.  Gold price remains a 'sell the bounce' trade as the daily RSI turns south below the 50 level.   Gold price is treading water just above $2,000, consolidating its rebound from two-month lows of $1,984 set on Wednesday. The further upside in Gold price appears elusive, as the US Dollar (USD) has regained lost footing amid a modest recovery in the US Treasury bond yields and a cautiously optimistic market environment. Weak US Retail Sales data saves the day for Gold price Markets cheer Thursday's weak US Retail Sales data for January, which brought early US Federal Reserve (Fed) rate cuts chatter back on the table, accentuating the profit-taking slide in the US Dollar, as well as, the US Treasury bond yields. The market mood remains mixed so far this Thursday's trading, as investors assess the conflicting messages from US Federal Reserve (Fed) policymakers and its implications on the pricing of the dovish policy pivot this year. The uncertainty around the timing of Fed interest rate cuts, following strong US Nonfarm Payrolls (NFP) and Consumer Price Index (CPI) data for January, keeps the corrective mode intact in the US Dollar, as well as, the US Treasury bond yields. US Retail Sales declined by 0.8% in January, the US Census Bureau reported on Thursday, worse than the market expectations for -0.1%. Early Friday, the US Dollar managed to gather strength once again, in anticipation of hot Producer Price Index (PPI) inflation data and an improvement in the UoM Consumer Sentiment. The US PPI is forecast to rise at an annual pace of 0.6% in January, as against a 1.0% increase reported previously, Monthy PPI inflation is expected to rebound to 0.1% in the same period vs. -0.2% previous. Meanwhile, the UoM Preliminary Consumer Sentiment is set to inch higher to 80.0 this month vs. January's 79.0.   The data could reverberate hawkish Fed expectations, fuelling another upside in the US Dollar at the expense of the Gold price. Additionally, the end-of-the-week flows will influence the Gold price action while investors will resort to profit-taking after an action-packed US economic calendar this week. Apart from the data, speeches from Fed officials will be closely scrutinized for the Fed rate cut expectations. US data and the Fedspeak would likely set the tone for the Gold market in the coming week. Gold price technical analysis: Daily chart As observed on the daily chart, Gold price recaptured the 100-day Simple Moving Average (SMA), now at $1,994 on Thursday on a daily closing basis, reviving the bullish interest. The 14-day Relative Strength Index (RSI), however, has turned lower below the midline, warranting caution for Gold buyers. Adding credence to the bearish bias, the 21-day and 50-day SMAs Bear Cross, confirmed last week, also remains in play. Therefore, Gold price likely remains a 'sell the bounce' trading opportunity. The immediate support level is aligned at the 100-day SMA of $1,994. Other healthy support levels are now seen at the two-week low of $1,984, below which the December 13 low of $1,973 and the horizontal 200-day SMA at $1,966 will be tested. On the flip side, if the renewed upside in Gold price gains traction, a fresh rally toward the 21-day SMA of $2,023 could be in the offing on a sustained break above the previous day's high of $2,008.

Asian stocks are on track for their fourth consecutive weekly gain, potentially marking the longest winning streak in over a year unless they experience an unlikely decline of more than 1% on Friday. Despite recent economic setbacks, such as Japan and Britain slipping into recession at the end of last year and U.S. retail sales declining more than expected last month, the regional and global interest rate environment remains supportive for risk markets. Weaker economic indicators could pave the way for relatively looser monetary policy, providing a bullish backdrop for Asian markets, particularly from an interest rate perspective, if not an eventual economic one. Despite initial concerns at the beginning of 2024 regarding a potential equity selloff, investors have remained resilient, defying skeptics and maintaining a positive trajectory. However, market attention is now focused on the upcoming release of the Producer Price Index (PPI) in the U.S. on Friday, which could very well play a significant role in shaping market sentiment. The PPI's implications for the Federal Reserve's preferred inflation gauge make it a closely watched indicator. Market participants hope that the PPI data does not signal further discomfort similar to this week's hotter Consumer Price Index (CPI) readings. Ideally, investors hope that CPI readings were wrong and that the PPI throughput to the PCE price growth would receive a more favourable response when released later in the month. Despite the potential for market volatility surrounding the PPI release, there remains a prevailing belief that the market's confidence in lower policy rates will outweigh any negative data outcomes. This sentiment suggests that the direction of policy rates holds more influence over market dynamics even though the magnitude of rate cuts has been trimmed. Considering the current economic landscape, it was widely understood that the market's pricing-in of 175 basis points (bps) worth of rate cuts for 2024 was ambitious, particularly in the absence of concrete data confirming a slowdown in the US economy. Despite Thursday's disappointing reading on nominal spending, the broader dataset suggests a contrary narrative: if anything, the growth momentum in the US appears to have gained traction early in the year, building upon the strong performance witnessed in 2023. This divergence becomes more pronounced when juxtaposed with the economic challenges faced by other major economies such as Germany, the UK, Japan, and China. These countries have grappled with recessions, deflationary pressures, and sluggish growth, starkly contrasting the relatively robust economic environment observed in the United States. The resilience of the US economy, characterized by its ability to navigate global headwinds and sustain the growth momentum, underscores its position as a key driver of global economic activity. While uncertainties persist, particularly concerning monetary policy and market dynamics, US exceptionalism remains alive.