Heading into a fresh trading week, Wall Street stock futures are showing a mixed performance. The spotlight for the markets is expected to be on the Federal Reserve's monetary policy, especially with the anticipated release of the February labor market report this Friday. In other developments, a consortium of investors has raised its acquisition bid for the retail giant Macy’s (NYSE), and Super Micro Computer (NASDAQ) is slated to be incorporated into the S&P 500 benchmark later in the month.
Sign for Wall Street in New York City | Shutterstock.com
Asian & European Session's Economic Overview
From economic events perspective, Japan's economic activity showed robust signs with Capital Spending soaring to 16.4%, significantly above expectations, though the Monetary Base's 2.4% increase did not meet anticipated growth levels. Australia presented a complex picture:
- The MI Inflation Gauge slightly fell by 0.1%.
- ANZ Job Advertisements dropped by 2.8%.
- However, a significant 7.4% jump in Company Operating Profits was observed.
- A 1.0% decline in Building Approvals indicated a potential slowdown in the construction sector.
In Europe, inflationary pressures became evident with Switzerland's CPI reaching 0.6%, and Spain saw a notable 7.5K reduction in Unemployment, painting a varied picture of the Eurozone's economic condition.
This varied economic data could have distinct impacts on global markets:
- The S&P 500 (SPX) may respond positively to Japan's capital spending, viewing it as an indicator of Asian economic vitality.
- Gold could attract more interest, bolstered by Switzerland's CPI signals, reinforcing its status as a safe haven.
- The EUR/USD pair may face volatility, with the mixed economic signals from Europe posing challenges to the Euro's position.
Getting Ready for US Session
As we approach the US trading session, the agenda appears light, but anticipation is building for the US Non-Farm Payrolls (NFP) set to be released on Friday. The upcoming Non-Farm Payrolls (NFP) report is highly anticipated, with forecasts suggesting a substantial addition of 190K jobs, a significant decrease from the previous 353K. This slowdown in job growth could signal a cooling in the labor market. Average Hourly Earnings are expected to rise by 0.2%, a reduction from the previous 0.6%, potentially indicating a deceleration in wage inflation. The Unemployment Rate is projected to remain steady at 3.7%. The NFP's potential impact on financial markets is multifaceted:
- SPX may see volatility; weaker job growth could signal economic concerns, while positive data may boost market confidence.
- Gold's demand could rise as a safe haven amid NFP-induced economic uncertainty, or fall with strong job figures suggesting tighter monetary policy.
- EUR/USD could sway with NFP outcomes; a weaker report may soften the dollar, while strong job growth could strengthen it.
This key economic indicator will be closely watched by traders, especially in the context of the ongoing Gaza Crisis, which has heightened the appeal of safe-haven assets. The market's focus on safe-haven investments may influence trading strategies, particularly if geopolitical tensions escalate.
In addition to macroeconomic indicators, today's session will also spotlight a series of earnings reports from notable companies. Among them are:
- Henkel KGaA St. and China Tower Corporation Limited, both scheduled to present their Q4 2023 earnings.
- PT Bank Negara Indonesia (Persero) Tbk has its Annual General Meeting on the docket.
- Gitlab Inc is set to disclose its Q4 2024 earnings.
These financial disclosures could introduce volatility and provide insight into corporate performance and sectoral health, influencing market dynamics ahead of the critical NFP release.
S&P500 (SPX) Price Prediction: Technical Outlook
On March 4, the S&P 500 (SPX) showcased resilience, climbing 0.80% to reach 5137.07, reflecting an optimistic sentiment in the market. Positioned just beneath the pivot point of 5141.33, the index's current stance hints at a critical juncture. Should it fail to surpass this threshold, a bearish correction might ensue, marked by potential declines towards immediate support levels at 5112.11, 5089.89, and further down to 5059.08.
S&P500 Price Chart | Source: Tradingview
However, overcoming the immediate resistance at 5163.89, followed by higher barriers at 5183.84 and 5210.61, could pivot the trend towards bullish territory.
The RSI indicator at 48, alongside the 50-day and 100-day EMAs at 5051.90 and 5018.89 respectively, underscores a market poised for a decisive move. In essence, the S&P 500's future direction hinges on its ability to breach the pivotal 5141.33 mark, setting the stage for either a continued ascent or a corrective pullback.
Trading Signal:
- Entry Price: Sell Below at $5140
- Take Profit: $5110
- Stop Loss: $5150
Start Trading S&P 500 Today
EUR/USD Price Prediction: Technical Outlook
On March 4, the EUR/USD pair edged higher by 0.15%, closing at 1.08539. This movement places the currency pair above its pivot point of 1.0838, indicating a potential shift towards a bullish trend. The immediate resistance levels are identified at 1.0863, 1.0885, and 1.0912, which could test the pair's upward momentum. Conversely, support levels at 1.0821, 1.0793, and 1.0766 offer a foundation to counter any downward pressures. The Relative Strength Index (RSI) at 61 supports the positive sentiment, suggesting an ongoing buying interest.
EUR/USD Price Chart | Source: Tradingview
A significant development is the EUR/USD's breakout from a symmetrical triangle pattern, with resistance previously noted at the 1.0845 level. This breakout, coupled with the closure of a bullish engulfing candle on the 4-hour chart, underscores a strong buying trend. Both the 50-day and 100-day Exponential Moving Averages (EMAs) at 1.0820 and 1.0812 respectively, further bolster this bullish outlook, providing additional support for the uptrend.
In essence, the EUR/USD demonstrates a bullish potential above the 1.0838 threshold, buoyed by technical indicators and recent chart patterns, suggesting room for further gains.
Trading Signal:
- Entry Price: Buy Above 1.0850
- Take Profit: 1.0885
- Stop Loss: 1.0830
Start Trading EUR/USD Today
Gold (XAU/USD) Price Prediction: Technical Outlook
Gold (XAU/USD) saw a marginal increase, closing at $2082.78, marking a slight uptick of 0.02%. Positioned just below a critical pivot point at $2087.97, gold's trajectory hints at an impending decision point. Resistance levels loom overhead at $2099.78, $2111.90, and $2124.91, challenging further upward movement.
Conversely, support is established at $2068.81, with additional safety nets at $2059.03 and $2044.24. The Relative Strength Index (RSI) indicates an overbought condition at 74, suggesting potential for a minor correction. However, surpassing the $2090 barrier could catalyze a bullish momentum, especially as gold flirts with the psychological $2100 mark.
Gold (XAU/USD) Price Chart | Source: Tradingview
The 50-day and 100-day EMAs at $2044.24 and $2035.14, respectively, reinforce a generally bullish undertone. In essence, gold's immediate future hinges on its ability to breach the $2090 threshold, with potential for either a continuation of the current trend or a slight pullback.
Trading Signal:
- Entry Price: Sell Below $2,087
- Take Profit: $2,070
- Stop Loss: $2,095
Start Trading Gold Today
Stay ahead of market movements. Subscribe for FlowBank’s daily insights and updates!
*The information contained on this page does not constitute a record of our prices, nor does it constitute an offer or solicitation for a transaction in any financial instrument. FlowBank SA accepts no responsibility for any use that may be made of these comments and for any consequences that may result therefrom. Any person who uses it does so at their own risk.
