Focus on Gas and Cable During a Slow Week of American Data

American data pointed to a strong labour market although ISM manufacturing PMI on Wednesday was lower than expected. GDP data from Canada and Australia came in lower than expected while inflation in the eurozone generally came in higher than the consensus.

Traders still expect hawkishness from the Fed given the economy’s resilience, but the chance of a double hike later this month remains around 30%, little changed from last week, although further ahead rates are expected to go higher. Yields of 30-year Treasuries moved back above 4% for the first time since last November. It’s still unclear to what extent further hawkish policy in the USA is priced in.

Last week, Bitcoin was rejected from $25,000, and most major altcoins have also failed to find more momentum upward, so the current phase of cryptocurrencies’ rally might be over. Most major indices have made losses overall this week although less clearly than last week. Meanwhile commodities have looked a lot more positive as inflation has returned to focus and the USA’s strategic petroleum reserve diminished again.

There’s no further key data expected at the end of this week, but participants in most markets are awaiting next Friday’s NFP with particular eagerness. In the prelude, there might be technical movements by natural gas and cable.

Natural Gas, Four-hour Chart

After the long downtrend and apparent capitulation of buyers, gas bounced from last week’s lows, developing upward momentum and forming a reverse head-and-shoulders pattern. If the neckline of a pattern is to the upside, it’d be possible to see further continuation upward. However, there might be vulnerability given the long wick of Thursday afternoon’s first period, so a move back down could reach the value area between the 100 and 200 simple moving averages.

Cable, Four-hour Chart

Cable reached the peak of its recent range last week and formed a downward engulfing pattern before moving back to lows around $1.193. While a breakout is possible here depending on sentiment, with potential targets around round numbers like $1.19 or even $1.18 further ahead, the absence of any obvious driver ahead of the NFP might suggest that continuation of the range could be more favourable.

This afternoon’s American PMIs from 14.45 GMT could bring some volatility on this chart but are unlikely to shift the technical picture significantly except in the case of a notable surprise. Instead, 10 March is particularly important for cable because British GDP and the US job report both occur then.

The opinions in this article are personal to the writer. They do not reflect those of Exness or FX Empire.