USD/JPY, EUR/USD, NZD/USD

US Core PCE price index --> USD/JPY

The Federal Reserve is not rushing to ease policy, and markets are beginning to accept the possibility that there will be no rate cuts before the summer. Annually, the core PCE price index is anticipated to have decelerated from 2.9% to 2.8%, but a monthly increase to 0.4% would likely cause investors to remain vigilant. The market response to a mixed set of PCE price data could also be influenced by the magnitude of the personal income and spending figures. Personal consumption unexpectedly increased 0.7% m/m in December. It is anticipated to have moderated to 0.3% in January, which could alleviate concerns that the US economy was expanding.

In FX markets, USD/JPY has been stubbornly pushing for some recovery after the climb towards the three-month high of 150.87 and the hold above the steep ascending trend line. In case of a break of this line, then the price may hit the 149.70 support and the 20-day simple moving average (SMA) at 149.30. Otherwise, a successful jump above the three-month peak could meet the 151.90 resistance level ahead of the next psychological marks such as 152.00 and 153.00.

 Eurozone CPI --> EUR/USD

The upcoming policy meeting of the European Central Bank is scheduled for March 7, and there is significant discussion regarding the possibility of officials indicating an upcoming rate drop. In January, headline inflation declined to 2.8% annually, which questioned the expectation for a recovery to the 3.0% threshold. The preliminary data for February will be released on Friday. If there is another decrease, it is likely that markets would interpret this as an indication for policymakers to officially prepare for a reduction in interest rates during the summer.

Technically, EUR/USD is confirming a bullish bias as it climbed above the short-term uptrend line and the 200-day SMA at 1.0825. Moving higher, the 50-day SMA at 1.0880 is coming next, standing slightly below the 1.0890 resistance. However, a potential break below the 1.0805 support could drive the market towards the medium-term uptrend line at 1.0730.

RBNZ policy meeting --> NZD/USD

The Reserve Bank of New Zealand has become more hawkish, even though most other central banks are talking about cutting soon. Governor Adrian Orr recently said things that made it sound like there was a chance that inflation would not go back to the 1-3% goal range without more tightening. The chances of another rate hike have gone through the roof, and they are now almost 60% for the May meeting. The markets have given the upcoming meeting on Wednesday a 30% chance of lowering rates. But one thing is for sure that the RBNZ won't be lowering interest rates anytime soon, or at all in 2024.

NZD/USD is losing ground today after eight straight green days with immediate support coming from the 0.6155 barricade. Even lower the 20-day SMA at 0.6125 and the 200-day SMA at 0.6073 may halt bearish actions. However, a successful attempt above the 0.6215 resistance may open the way towards the 0.6280 resistance level.