Weekly Market Review

[Attila]

Following the ECB's interest rate announcement, the EURUSD exhibited volatile price action, presenting potential profit opportunities on both the bullish and bearish sides. Initially, the pair saw a bullish surge, climbing from a low of 1.07907 to a peak of 1.08537, resulting in a movement of approximately $630 USD. However, EURUSD later transitioned into a bearish trend, dropping sharply to a low of 1.07657. This bearish move not only surpassed the initial low recorded during the news release but also offered a larger profit potential of $880 USD.

In the short term, the rate cut and dovish tone were likely to be negative for the Euro, potentially leading to weakness in EUR/USD. The medium-term outlook was more uncertain, as fiscal stimulus and the end of the ECB's rate-cutting cycle could have supported the Euro, but rising bond yields and slower growth projections may have limited gains. Additionally, the Federal Reserve's policy played a critical role in determining the future direction of EUR/USD. In summary, the ECB's decision was likely to weigh on the Euro in the short term, while the medium-term impact depended on fiscal developments in Europe, bond yield dynamics, and the Fed's policy trajectory.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

 

[Attila]

Geopolitical tensions, such as conflicts, trade disputes, or instability in key regions, often have a significant impact on financial markets, particularly commodities like oil and gold.

Oil: Geopolitical tensions can disrupt the supply of oil, especially if they involve major oil-producing countries or key transit routes. Such disruptions tend to cause oil prices to rise due to concerns over supply shortages. For example, tensions in the Middle East, home to a significant portion of global oil reserves, can lead to fears of supply cuts, driving up crude oil prices.

Gold: Gold is typically seen as a "safe haven" asset, meaning it tends to rise in value during times of geopolitical uncertainty. Investors flock to gold as a store of value when there is heightened risk in global markets. Therefore, during geopolitical crises, gold prices often increase as investors seek safety away from more volatile assets like equities or currencies.

In summary, geopolitical tensions tend to push oil prices higher due to supply concerns and boost gold prices as investors seek a stable investment in uncertain times.

 

[Attila]

Market Overview: Oil Price Decline Last Week​

Between March 3 and March 7, 2025, oil prices experienced a bearish trend, driven by a combination of increased supply and growing concerns over global demand:

1. OPEC+ Production Adjustment: On March 3, OPEC+ announced plans to raise oil production by 138,000 barrels per day, effective in April. This move, which reversed previous production cuts, contributed to a rise in global supply, putting downward pressure on oil prices.
2. U.S. Tariff Policy Impact: The Trump administration imposed 25% tariffs on imports from Canada and Mexico, including a 10% duty on Canadian energy products. Additionally, tariffs on Chinese imports were raised to 20%. These actions raised concerns over an escalating trade war, which could negatively affect global economic growth and reduce oil demand.

As a result of these factors, oil prices saw a sustained decline, reflecting the broader bearish sentiment in the market.


What Traders May Have Missed: A $5,350 Opportunity in Oil

Between the highest and lowest points of last week's oil price movement, there was a remarkable 535-tick swing—equating to a potential profit of $5,350. During this period, the price fluctuated within a range from $74.03 to $68.68, offering traders a substantial profit opportunity if they had capitalized on the market's volatility.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

 

[Attila]

Between March 4 and March 7, 2025, the British Pound (GBP) appreciated against the US Dollar (USD), rising from approximately 1.26939 to a peak of 1.29447. This appreciation coincided with the implementation of new US tariffs, which increased duties on imports from Canada, Mexico, and China. These protectionist measures heightened concerns over US economic growth, leading to a weaker USD. Additionally, positive economic developments in Europe, including Germany's announcement of a €500 billion infrastructure fund and relaxed debt rules, helped boost market sentiment towards European assets, indirectly benefiting the GBP. The US dollar's decline amid fears of economic contraction from the tariffs further fueled the pound's rise. Meanwhile, the GBP also benefited from favorable economic data and improved market confidence in the UK's financial outlook. From the time the tariffs took effect on March 4, when GBP/USD opened at 1.26939, the pair climbed to a weekly high of 1.29447, presenting a potential gain of $2,508 per standard lot. The pound’s strength during this period was primarily driven by USD weakness, as investors reacted to the economic risks associated with increased trade barriers.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

 

[Attila]

During a high-impact news release on a 5-minute candlestick, potential profit or loss could have occurred based on market entry timing. Last week 6th March, the European Central Bank's rate decision triggered significant volatility, with EUR/USD serving as a key example. In such conditions, pending orders can be a valuable tool, depending on individual trading strategies.

 

[Attila]

12.03.2025​

Today's High-Impact News Releases:

• US Inflation Figures
• Canadian Interest Rate Decision

U.S. Inflation​

On February 12, 2025, data revealed that U.S. inflation pressures persisted in January, with both headline and core consumer prices rising more than expected. The Consumer Price Index (CPI) increased by 0.5% month-over-month, the highest since August 2023, driven by a 0.4% rise in shelter costs and a 1.1% jump in energy prices, particularly gasoline. Annual inflation edged up to 3%, above forecasts of 2.9%, as energy costs rose for the first time in six months. Core inflation, excluding food and energy, also accelerated, rising 0.4% monthly and 3.3% annually, surpassing expectations. Key drivers included transportation services, shelter, and motor vehicle insurance, while food prices, especially eggs, saw significant increases due to supply shortages. These figures indicate stalled progress in curbing inflation, with shelter costs alone accounting for nearly 30% of the monthly increase.

Today, the latest U.S. CPI data will be released at 12:30 PM GMT, and markets are bracing for high volatility as investors assess whether inflationary pressures are easing or persisting.
The chart below illustrates how EUR/USD reacted following the release.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

Bank of Canada Interest Rate​

On January 29, 2025, the Bank of Canada (BoC) cut its key interest rate by 25 basis points to 3%, in line with market expectations. This move brought total rate cuts to 200 basis points since the easing cycle began in June 2024. At the time, the central bank also announced the conclusion of quantitative tightening and outlined plans to restart asset purchases in early March to support liquidity and economic activity.

The BoC noted that CPI inflation had recently aligned with its 2% target and was expected to remain near this level over the following two years as underlying price pressures eased. However, the Governing Council expressed concerns that U.S. tariffs could hinder Canada’s economic recovery by reducing demand for domestic goods and services.

Despite these risks, the BoC projected GDP growth to improve, forecasting a 1.8% expansion over the next two years, following an estimated 1.3% growth in 2024, as detailed in its latest Monetary Policy Report.

The Bank of Canada is set to announce its next interest rate decision today at 1:45 PM GMT.
The chart below illustrates how EURCAD reacted following the Bank of Canada's interest rate announcement.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

 

[Attila]

13.03.2025​

On Thursday, high-impact news releases from the U.S. will include:

• Core PPI m/m (Producer Price Index month-over-month),
• PPI m/m, and
• Unemployment Claims.

​

U.S. Core PPI, PPI and Unemployment Claims​

The data from February 13th, 2025, presented a mixed outlook for the US economy and the USD, as rising Producer Price Index (PPI) and Core PPI figures pointed to ongoing inflationary pressures, particularly in food and energy, which could negatively affect businesses and consumers. Conversely, a tight labor market with low unemployment claims signaled economic resilience, supporting consumer spending and a strong economy. The Federal Reserve's hawkish stance on interest rates was bullish for the USD in the short term, although persistent inflation posed longer-term challenges. Throughout this timeframe, the USD strengthened against Gold, with a daily price fluctuation of $5,625 observed.

The next U.S. PPI m/m, Core PPI m/m, and Unemployment Claims data will be released on March 13th at 12:30 PM GMT.


The chart illustrates the XAUUSD's reaction to the Core PPI m/m, PPI m/m, and Unemployment Claims data released on February 13th, 2025.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

 

[Attila]

14.03.2025

On Friday, 14th March 2025, high-impact news releases from the UK and US will feature:

• GDP m/m
• Prelim UoM Consumer Sentiment
• Prelim UoM Inflation Expectations

UK Economy Grows 0.1% in Q4, 1.4% Annually, with Strong December​

The British economy showed modest growth in late 2024, with a 0.1% quarterly expansion in Q4, avoiding a forecasted contraction, according to a release on February 13, 2025. This was driven by a 0.2% rise in services and a 0.5% increase in construction, though production fell for the fifth consecutive quarter, led by declines in manufacturing and mining. Exports dropped 2.5%, while imports rose 2.1%, and fixed capital formation fell 0.9%, offset by higher government spending and inventory changes. Year-on-year, GDP grew 1.4% in Q4, the fastest since Q4 2022, fueled by household consumption and government spending, though business investment and net trade were drags. In December 2024, the economy expanded 1.5% year-on-year, the strongest performance since October 2022, and grew 0.4% month-on-month, the highest in nine months, supported by gains in services and production, particularly in pharmaceuticals and machinery. However, construction and some sectors like utilities saw declines. For 2024 as a whole, the economy expanded 0.9%, up from 0.4% in 2023, demonstrating resilience despite mixed sectoral performance.

• The GBPUSD remained bullish throughout the day because UK economic resilience reduced the likelihood of BoE rate cuts, while softening U.S. inflation increased expectations of Fed policy easing. This monetary policy divergence—combined with Eurozone weakness—shifted market sentiment toward buying GBP and selling USD, sustaining GBP strength until the market close.

The next GDP release is scheduled for March 14th at 7:00 AM GMT.

The chart shows the reaction of GBPUSD on February 13th, 2025.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.

US - Prelim UoM Consumer Sentiment​

The University of Michigan revised US consumer sentiment sharply lower to 64.7 in February 2025 from an initial 67.8, marking the weakest level since November 2023. Both current economic conditions (65.7 from 68.7) and future expectations (64 from 67.3) declined, with sentiment falling across all demographic groups. A 19% drop in durable goods buying conditions, driven by concerns over tariff-related price hikes, led the decline. Expectations for personal finances and the short-term outlook fell nearly 10%, while the long-term outlook dropped about 6%. Inflation expectations for the next year surged to 4.3%, the highest since November 2023, while the five-year outlook rose to 3.5%, the biggest monthly increase since May 2021.

The next Preliminary University of Michigan Consumer Sentiment release is scheduled for March 14th at 2:00 PM GMT.

US - Prelim UoM Inflation Expectations​

In February, the University of Michigan consumer survey indicated that year-ahead inflation expectations rose to 4.3%, a 1 percentage point increase from January and the highest since November 2023. Concerns over rising prices, fueled by President Trump's tariff policies, led to a sharp decline in consumer sentiment, with the headline index falling to 67.8. Despite the postponement of tariffs on Canada and Mexico, fears of inflationary pressure remained, particularly affecting lower-income households. Longer-term inflation expectations edged up slightly to 3.3%.

• The USD strengthened due to rising inflation expectations and resilient wage growth despite a weakening labor market. Higher inflation forecasts increase the likelihood of future Federal Reserve rate hikes or maintaining elevated interest rates, making USD-denominated assets more attractive. Additionally, the increase in average hourly earnings supports consumer spending, reinforcing economic resilience despite a higher unemployment rate and declining consumer sentiment.

The next release of the Preliminary University of Michigan Inflation Expectations is set for March 14th at 2:00 PM GMT.

The chart shows the EURUSD's performance on February 7, 2025.

Disclaimer: The content provided is for educational and informational purposes only and is not intended as trading or financial advice. This analysis seeks to enhance your understanding of market behavior and highlight potential opportunities that may have existed, offering insights into how the market operates and the possibilities it may present.