As we head into Thursday, February 20, 2025, global markets are bracing for a session filled with economic data releases that could fuel heightened volatility. The U.S. dollar (USD) remains in focus following the release of FOMC Meeting Minutes, which provided insights into the Federal Reserve’s policy stance. Traders are also monitoring the Philadelphia Fed Manufacturing Index, U.S. Jobless Claims, and inflation indicators from Canada and Japan.
In the currency markets, the NZD/USD pair saw significant movement following the RBNZ rate decision, while USD/JPY reacted to mixed U.S. economic data. Meanwhile, the AUD/USD pair experienced volatility in response to Australia’s employment data.
NZD/USD
Technicals in Focus
The NZD/USD pair exhibited sharp volatility, dropping significantly after the RBNZ rate decision before recovering partially. The pair is currently trading around 0.5696, reflecting overall bearish sentiment.
- MACD: Below the zero line, indicating strong bearish momentum.
- Stochastic Oscillator: Approaching oversold territory, suggesting a potential bounce.
- 14-day RSI: Below 40, confirming the downtrend.
Trading Strategy: Neutral to Sell
- Sell below 0.5700–0.5680 with targets at 0.5660–0.5630, with a stop loss above 0.5730.
- Alternatively, buy above 0.5730 with targets at 0.5760–0.5790, with a stop loss below 0.5700.
USD/JPY
Technicals in Focus
The USD/JPY pair rebounded after dipping to 151.35, climbing back towards 151.77 as traders reassessed U.S. economic data. The FOMC Meeting Minutes provided no major surprises, keeping the dollar steady.
- MACD: Hovering around the zero line, indicating neutral momentum.
- Stochastic Oscillator: Turning bullish, signaling possible upside continuation.
- 14-day RSI: Rising towards 55, showing strengthening momentum.
Trading Strategy: Neutral to Buy
- Buy above 151.80–152.00 with targets at 152.30–152.60, with a stop loss below 151.50.
- Alternatively, sell below 151.50 with targets at 151.20–150.90, with a stop loss above 151.80.
AUD/USD
Technicals in Focus
The AUD/USD pair has been volatile, reacting to mixed Australian employment data. After hitting a low of 0.6338, the pair remains under pressure as traders digest weaker employment figures.
- MACD: Below the zero line, indicating bearish momentum.
- Stochastic Oscillator: Near oversold levels, suggesting a possible short-term rebound.
- 14-day RSI: Below 45, confirming the bearish bias.
Trading Strategy: Neutral to Sell
- Sell below 0.6340–0.6320 with targets at 0.6300–0.6270, with a stop loss above 0.6360.
- Alternatively, buy above 0.6370 with targets at 0.6400–0.6430, with a stop loss below 0.6340.
Market Outlook
Looking ahead, key events that could drive further market movements include:
- U.S. Initial Jobless Claims & Philly Fed Manufacturing Index, which could provide further direction for the USD.
- Canadian RMPI (MoM) and New Housing Price Index, impacting USD/CAD sentiment.
- Japanese Core CPI (YoY), which will influence the JPY.
With central banks and economic data dominating the landscape, traders should prepare for increased volatility across major forex pairs. Risk management remains crucial as markets respond to monetary policy signals and macroeconomic releases.