Weekly Market Analysis: 22 - 26 February 2021

Weekly market analysis 22-26 February 2021 will discuss things that affect the market such as, the price of crude oil is moving up today, because US crude oil production has returned. Previously, US production was hampered by cold weather conditions, this was feared to disrupt the shipping and supply of oil. The unusually cold weather in Texas and several Plains states has disrupted production of around 4 million barrels per day (bpd) of crude oil production and also around 21 billion cubic meters of other natural gas production. Meanwhile, gold rebounded in trading last Friday, one of these safe-haven assets tried to hold back its fall and closed higher. Although gold is trying hard to recover from its fall, its short-term movement is still declining. Therefore, anticipate a further decline. The Covid-19 vaccination program in the UK has made significant progress. This gives a signal that economic activity will slowly but surely return to normal, putting pressure on the US dollar. The pound sterling is also the currency that is currently the focus of investors, especially after British PM "Boris Johnson" announced that he would plan to gradually end the lockdown in the near future. Just for information, the British government is considered to have successfully vaccinated against Covid-19, this is illustrated after reports that the increase in new cases of Covid-19 has decreased. The greenback in the Asian trading session on Monday early this week moved lower against several other major currencies. The weakening of the USD is the lowest level in 3 years versus the AUD and the lowest in 3 years against the GBP. The Australian Dollar, which is a commodity currency, and the Pound sterling are two currencies that are strengthening against the US Dollar. The weakening of the US Dollar is predicted to continue in the short term. The weakening of the US Dollar is also supported by the release of economic data, including the release of manufacturing and service sector index data from several major countries in the world which are better than predicted. After the release of several recent economic data, it is estimated that it will support hopes for a faster global economic recovery. The Australian Dollar has strengthened over the past few days, due to the weakening of the US Dollar. The weakening of the US Dollar is due to the ongoing selling of the US Dollar by market players, they switched to other risk assets and bought the Australian Dollar. This caused the Aussie to strengthen and jump sharply and managed to touch its highest level in 3 years in trading last Friday. The US Dollar is considered one of the safe haven currencies that investors choose if the market or global conditions are unclear. However, when the prospect of a global economic recovery is currently happening, it has encouraged market players to sell the US Dollar, and shift their capital to risky assets and commodity currencies / Australian Dollar.

1. Important Data/High Impact on Weekly Market Analysis 22 - 26 February 2021

1.1 Fed Chair Powell Testifies (USD)

Tuesday, 22:00 WIB. TheFed Chairman "Jerome Powell" will give his views on the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) policy before the Senate Committee on Banking, Housing, and Urban Affairs in Washington DC. What does the CARES Act mean? The CARES Act is a direct aid package (BLT) of around more than USD2 trillion that will be disbursed by the US government for workers, families, and small businesses.

1.2 BOC Gov. Mackiem Speaks (CAD)

Tuesday, 00:30 WIB. Bank of Canada Chairman "Tiff Macklem" will present his policy views. As the head of the central bank, which controls short-term interest rates, he has a greater influence on the value of the Canadian currency. Market players are watching the influence of the policies that will be taken by the head of the central bank, this is because it often becomes a signal about future monetary policy and will certainly affect price movements in the market. Volatile market movements sometimes occur when the speech of the head of the Canadian central bank, especially regarding instructions on the benchmark interest rate.

1.3 RBNZ Monetary Policy Statement, RBNZ Rate Statement & Official Cash Rate (NZD)

Wednesday, 08:00 WIB. Reserve Bank of New Zealand (RBNZ) Monetary Policy Statement In this report, the RBNZ is mandated to include details on how the central bank will achieve its inflation target, how it proposes to formulate and implement monetary policy over the next 5 years, and how monetary policy has been implemented since the policy statement was issued. This provides valuable insight into the central bank's views on economic conditions and inflation rates in New Zealand. The RBNZ Rate Statement is a data release related to interest rates. This data is one of the main tools used by the RBNZ to provide market participants with information about New Zealand's monetary policy. This data contains the results of the central bank's decision on interest rates and comments on the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues about what policies will be taken for the future. The Official Cash Rate is the reference level of interest rates at which the central bank provides loans in the form of soft loans to other banks. The decision of the head of the central bank on interest rates is usually awaited by investors, so it tends to move the market actively. Meanwhile, the short-term interest rate is the most important factor in assessing a country's currency. Market participants look at most other indicators only to predict how interest rates will change in the future.

1.4 RBNZ Press Conference (NZD)

Wednesday, 08:00 WIB. After the meeting, the central bank will hold a regular meeting and is scheduled every 3 months. This is one of the main tools used by the RBNZ to provide investors with information about monetary policy. It covers in detail the factors that influenced the latest interest rate decision, such as the overall economic and inflation outlook. Most importantly, it provides clues about future monetary policy. The press conference lasts about 30 minutes and consists of 2 parts - first a prepared statement is read, then the conference is open to questions from the press. The questions sometimes lead to unscripted answers that create great market volatility.

2. Technical Review According to Weekly Market Analysis 22 - 26 February 2021

2.1 EUR/USD

2.2 USDCHF

2.3 GBPUSD

2.4 USDJPY

2.5 Gold

2.6 AUDUSD

2.7 Oil

Visit GIC Indonesia to get information about the world of trading. You can also join us in the Telegram Community GIC Trade and Telegram Channel GIC Trade. Don't forget to check the Youtube account GIC Indonesia which is full of lots of information, and follow our Instagram account to get information about various interesting webinars that you can follow.