As we head into Monday, March 3, 2025, global markets are set to react to key economic data releases and central bank communications from last week. The U.S. dollar remains the focal point following mixed Nonfarm Payrolls (NFP) data, which showed weaker-than-expected private job growth but steady unemployment figures. The market is also digesting ISM Manufacturing PMI data, which provided insight into U.S. economic resilience.
In the currency markets, EUR/USD experienced a sharp decline, driven by hawkish Federal Reserve comments and concerns over European inflation. Meanwhile, GBP/USD struggled to recover amid risk sentiment and Bank of England (BoE) rate expectations. AUD/USD extended its downward trend, reflecting weak demand for risk-sensitive currencies.
EUR/USD
Technicals in Focus
The EUR/USD pair saw a sharp sell-off, plunging below 1.0400 following the U.S. economic data releases. The pair is showing signs of consolidation near 1.0375, struggling to regain bullish momentum.
- MACD Indicator: Shows increased bearish momentum, confirming downside pressure.
- Stochastic Oscillator: Moving into oversold territory, indicating the possibility of a short-term rebound.
- RSI (14-day): Hovering near 30, reflecting continued selling pressure.
Trading Strategy: Neutral to Sell
- Sell below 1.0380-1.0360, targeting 1.0330-1.0300, with a stop loss above 1.0410.
- Alternatively, consider buying above 1.0410, targeting 1.0450-1.0480, with stops below 1.0370.
GBP/USD
Technicals in Focus
GBP/USD struggled to recover from its recent downtrend, trading near 1.2575. The pair has been weighed down by BoE policymakers’ cautious tone and strong demand for the U.S. dollar.
- MACD Indicator: Displays bearish divergence, confirming the downward bias.
- Stochastic Oscillator: Near neutral levels, indicating indecision among traders.
- RSI (14-day): Still below 50, reflecting bearish control.
Trading Strategy: Neutral to Sell
- Sell below 1.2580-1.2550, targeting 1.2510-1.2480, with a stop loss above 1.2610.
- Alternatively, consider buying above 1.2610, targeting 1.2650-1.2680, with stops below 1.2580.
AUD/USD
Technicals in Focus
AUD/USD continued its decline, now trading near 0.6205, reflecting weaker Australian data and a strong U.S. dollar. Sentiment remains bearish as traders anticipate the Reserve Bank of Australia (RBA) meeting minutes later this week.
- MACD Indicator: Suggests strong bearish momentum.
- Stochastic Oscillator: Near oversold conditions, hinting at a possible short-term bounce.
- RSI (14-day): Below 40, showing persistent selling pressure.
Trading Strategy: Neutral to Sell
- Sell below 0.6220-0.6200, targeting 0.6170-0.6150, with a stop loss above 0.6240.
- Alternatively, consider buying above 0.6250, targeting 0.6280-0.6300, with stops below 0.6200.
Market Outlook
Looking ahead, traders will focus on the following key economic events:
- U.S. ISM Services PMI (March 5, 2025) – A key indicator of business activity, impacting the U.S. dollar’s direction.
- Fed Chair Powell’s Speech (March 6, 2025) – Potential insights into the Fed’s future rate path.
- Eurozone Inflation Data (March 7, 2025) – A crucial update that could influence ECB rate expectations.
- Australian Retail Sales (March 3, 2025) – Expected to provide further insight into domestic demand trends.
The U.S. dollar is expected to remain strong, with risk-sensitive currencies like AUD and GBP likely to stay under pressure. However, any dovish signals from central banks could trigger short-term volatility across major currency pairs.
Overall Sentiment:
- Bearish on EUR/USD
- Bearish on GBP/USD
- Bearish on AUD/USD
Markets remain data-driven, with traders adjusting their positions in response to macroeconomic releases and central bank signals.