As we head into Tuesday, March 4, 2025, global markets are bracing for a session of heightened volatility, driven by key economic data releases and central bank commentary. The U.S. dollar remains in focus as traders react to mixed labor market data, including nonfarm payrolls and unemployment figures, while also eyeing upcoming GDP data and crude oil inventory reports.
In the currency markets, EUR/USD surged after a sharp rebound, fueled by positive Eurozone PMI data and a weaker U.S. dollar following disappointing employment figures. The euro is finding support as traders assess the latest inflation readings and await further guidance from the ECB, particularly with President Lagarde’s remarks on the monetary policy outlook.
Meanwhile, GBP/USD saw a strong rally, benefitting from an upbeat S&P Global Services PMI and rising investor confidence. The pound also gained traction following comments from BoE policymakers hinting at a more cautious stance on rate cuts.
The AUD/USD pair exhibited significant volatility, climbing higher amid risk-on sentiment and better-than-expected Australian economic data. Investors are closely watching the upcoming RBA minutes for further clues on monetary policy direction.
EUR/USD
Technicals in Focus
EUR/USD experienced a sharp rally, closing near the 1.0490 level after breaking through key resistance. The pair’s movements were influenced by better-than-expected Eurozone PMI figures and a pullback in U.S. job numbers.
- The MACD indicator shows strong bullish momentum, with the histogram expanding in positive territory.
- The Stochastic Oscillator is approaching overbought levels, signaling potential consolidation or a minor retracement.
- The 14-day RSI is trending higher but remains below extreme levels, suggesting further upside potential.
Trading Strategy: Neutral to Buy
- Buy above 1.0480-1.0460 with targets at 1.0520-1.0550 and 1.0580-1.0600, with a stop loss below 1.0430.
- Alternatively, consider selling below 1.0430 with targets at 1.0400-1.0370, with stops above 1.0480.
GBP/USD
Technicals in Focus
GBP/USD saw a strong bullish breakout, closing around 1.2714 after surging throughout the session. The movement was largely driven by robust PMI data and investor optimism regarding BoE policy.
- The MACD has crossed into bullish territory, reinforcing upward momentum.
- The Stochastic Oscillator is in overbought territory, indicating a possible short-term correction before further gains.
- The 14-day RSI remains strong, confirming continued bullish sentiment.
Trading Strategy: Neutral to Buy
- Buy above 1.2700-1.2670 with targets at 1.2750-1.2780 and 1.2820-1.2850, with a stop loss below 1.2630.
- Alternatively, consider selling below 1.2630 with targets at 1.2600-1.2570, with stops above 1.2700.
AUD/USD
Technicals in Focus
AUD/USD climbed higher, closing near 0.6248 after a strong bullish move supported by improved Australian economic data and positive risk sentiment.
- The MACD is turning positive, suggesting growing bullish momentum.
- The Stochastic Oscillator is moving into overbought territory, which may lead to temporary pullbacks.
- The 14-day RSI remains neutral-to-bullish, leaving room for further gains.
Trading Strategy: Neutral to Buy
- Buy above 0.6240-0.6220 with targets at 0.6280-0.6300 and 0.6320-0.6350, with a stop loss below 0.6200.
- Alternatively, consider selling below 0.6200 with targets at 0.6180-0.6150, with stops above 0.6240.
Market Outlook
Looking ahead, traders will closely watch the ECB’s monetary policy statement and U.S. GDP data, which could significantly impact market sentiment. Fed Chair Powell’s speech and crude oil inventory reports are also key events that may influence the direction of the USD and risk appetite across financial markets.
In the Eurozone, ECB President Lagarde’s comments will be crucial in shaping expectations regarding interest rate adjustments. Meanwhile, the Bank of England’s stance remains a key focus as policymakers continue to assess inflation dynamics in the UK.
Overall, the forex market is expected to remain highly reactive to economic releases and central bank rhetoric, with potential for sharp moves across major currency pairs as traders position themselves ahead of key macroeconomic events.