22.02.202117:18 Forex Analysis & Reviews: Commodity prices steadily rise. Markets await Powell's speech in the US Congress. Overview of USD, NZD, and AUD

Demand for raw materials continues to grow, April futures for WTI exceeded $60 per barrel for the first time in a year, copper futures are at their highest since 2011, iron ore is one step away from a 10-year high.

Markets will come out of the low volatility regime, most likely, Fed Chair Jerome Powell's speech in the US Congress on Tuesday will be immediately followed by another one on Wednesday. Congress will then consider his speech, including from the standpoint of developing a final decision on the $1.9 trillion stimulus package, which the House of Representatives is expected to approve this week.

NZD/USD

On Thursday, the RBNZ will hold a meeting on monetary policy, at which the revision of forecasts for GDP, employment, and inflation is expected. The RBNZ is expected to see a significant improvement in the economic situation in the medium-term but will make it clear that there is still a long way to go before the removal of incentives.

The economic downturn in New Zealand turned out to be significantly less than expected back in November. ANZ NZ believes that the GDP forecast that the RBNZ proposed in November could be significantly improved.

Expectations of fixing positive changes and the expected correction of forecasts will pull the kiwi up, even if the demand for risk slows down. The target price is still below the long-term average, a result of the lag in New Zealand bond yields, but this factor is likely to become more bullish in the coming days.

The Kiwi is likely to enter the wide resistance zone 0.7460/7550, which has been an obstacle to growth for several years, but we cannot count on a stronger growth yet. The economy of New Zealand is more sensitive to an increase in the trade-weighted rate of the national currency than in Australia, so it is possible that the RBNZ, facing the threat of strengthening the kiwi, will take some steps that will reduce its attractiveness.

AUD/USD

The Australian dollar has renewed its maximum since March 2018. Neither a vague employment report nor a slowdown in PMI growth is hindering its rapid growth.

The employment report showed that the labor market has not yet recovered. Over the year to January 2021, the number of employed fell by 0.4%, or by 45,600. January growth turned out to be worse than forecast, but there is also a positive parameter - the number of part-time employees decreased while the number of full-time employees increased, which can be regarded as a rather important positive factor. On the negative side, there is a rather strong decrease in the number of hours worked.

The CFTC report is bullish, the short position is down by 202 million to 219 million, a positive trend, but it does not explain why the Aussie is growing so fast. Perhaps the reason is that the market regards the hawkish orientation of the RBA higher than the Fed, which is reflected in the outstripping growth in bond yields. The real yield on 10-year US bonds rose by about 21p in February (as of the beginning of the week), while similar Australian bonds are growing much faster, growth of 21p was recorded only in the past week.

In any case, the estimated price in terms of growth rates slightly lags behind the spot price, but is directed confidently upward, which allows predicting the continuation of the bullish trend.

The obvious target is 0.8113, and, strictly speaking, there is no reason to doubt that it is unattainable. Expectations of a positive result of mass vaccinations suggest that Australia, which is now ending summer, will avoid a seasonal outbreak of covid or its scale will be milder than that of the countries of the northern hemisphere, which means that the Australian economy will receive additional preferences.

Another positive is the confident recovery of China, which, however, at the moment does not affect quotes, since it does not publish any macroeconomic statistics due to the two-week New Year celebration.

We assume that the bullish impulse will continue, the target is 0.8130, the next one is 0.8290.