As we head into Monday, February 17, 2025, global markets are bracing for a session that could see subdued trading due to a U.S. market holiday. However, economic releases from the Eurozone, the UK, and Asia are likely to shape price action across major currency pairs. The U.S. dollar remains in focus following last week’s inflation and employment data, while traders assess the implications of central bank policies in Australia and New Zealand.
In the currency markets, AUD/USD and NZD/USD have shown strong upward momentum, reflecting a risk-on sentiment as traders react to improving economic indicators in the Asia-Pacific region. Meanwhile, USD/JPY has experienced mixed movements, with traders looking for guidance from upcoming Japanese economic data.
AUD/USD
Technicals in Focus
The AUD/USD pair extended its bullish momentum, climbing to 0.6350 before facing mild resistance. The pair saw a strong uptrend following positive Australian labor market data, with employment change coming in at 19.7K, signaling resilience in the economy. However, the unemployment rate edged higher to 4.1%, creating some concerns about potential softness in the labor market.
- The MACD indicator remains in positive territory, reflecting continued upside momentum.
- The Stochastic Oscillator is approaching overbought levels, suggesting a potential pullback.
- The 14-day RSI is hovering near 65, indicating bullish sentiment but with a risk of consolidation.
Trading Strategy: Neutral to Buy
- Buy above 0.6340-0.6360 with targets at 0.6380-0.6400 and 0.6430-0.6450, with a stop loss below 0.6310.
- Alternatively, sell below 0.6310 with targets at 0.6280-0.6250, with a stop loss above 0.6340.
USD/JPY
Technicals in Focus
The USD/JPY pair has experienced choppy trading, with resistance near 152.90 and support forming around 152.00. The yen remains under pressure as traders weigh Japan’s trade balance data, which came in at -2,104.0B, highlighting persistent trade deficits.
- The MACD has flattened, indicating indecision in the market.
- The Stochastic Oscillator is in neutral territory, providing no clear directional bias.
- The 14-day RSI remains near 50, reflecting range-bound conditions.
Trading Strategy: Neutral to Sell
- Sell below 152.30-152.50 with targets at 152.00-151.80 and 151.50-151.20, with a stop loss above 152.80.
- Alternatively, buy above 152.80 with targets at 153.10-153.50, with a stop loss below 152.40.
NZD/USD
Technicals in Focus
The NZD/USD pair has posted significant gains, rising toward 0.5730, supported by New Zealand’s trade balance data, which came in stronger than expected at 132.5B. Additionally, traders are pricing in the upcoming RBNZ interest rate decision, which could dictate further moves in the Kiwi.
- The MACD indicator is trending higher, supporting further upside.
- The Stochastic Oscillator is in overbought territory, suggesting a potential retracement.
- The 14-day RSI is above 60, confirming strong buying pressure.
Trading Strategy: Neutral to Buy
- Buy above 0.5720-0.5740 with targets at 0.5760-0.5780 and 0.5800-0.5820, with a stop loss below 0.5690.
- Alternatively, sell below 0.5690 with targets at 0.5660-0.5630, with a stop loss above 0.5720.
Market Outlook
Looking ahead, the U.S. holiday (Washington’s Birthday) may lead to lower liquidity in the market, resulting in less volatility. However, traders will closely monitor:
- Eurozone trade balance data, which could impact the EUR/USD pair.
- UK employment figures, influencing GBP/USD movements.
- RBNZ monetary policy decision, which could drive NZD/USD direction.
Overall, risk sentiment remains positive, supporting higher-yielding currencies like the AUD and NZD, while the yen may continue to struggle unless safe-haven demand increases. Markets are likely to remain reactive to upcoming central bank statements and key economic releases later in the week.