• USD/JPY eyes 200-day SMA after dramatic downfall; US CPI next on the calendar

• GBP/USD resumes bullish outlook as UK jobs data loom

• Nvidia stock sinks the most in a while. Where next for the AI king?

 

US CPI inflation --> USD/JPY

February saw a jobs growth of 275k in the US, surpassing analysts' expectations. However, a downward revision in previous readings and a rise in the unemployment rate, along with slowing wages, fueled rate cut projections and led to more selling in the US dollar on Friday.

Inflation data will be the next test for the greenback on Tuesday. The headline CPI measure clocked in higher than forecasts suggested for the second consecutive month in January at 3.1% y/y and the core CPI remained stuck at 3.9% y/y despite projections for a slowdown. Given the Fed’s price stability mandate, stickier inflation might throw cool water on June’s rate cut scenario, helping USDJPY to regain some lost ground.

Technically, the pair has violated its 2024 upleg following last week’s freefall, but the 200-day simple moving average (SMA) could still protect the market from a plunge to 144.70.

On the upside, the bulls might need significant defense to restore the bullish outlook above 150.

US retail sales for February could be another important piece of information on Thursday at 12:30 GMT.

UK jobs data -->  GBP/USD

Tuesday will also see the release of the UK employment figures at 07:00 GMT. Having returned to an uptrend after last week’s impressive rally, GBPUSD will need an upbeat report to extend its upleg to 1.2900 and perhaps towards the crucial 1.3000 mark.

That said, analysts believe that the unemployment rate remained steady at 3.8%, and average weekly earnings (excluding bonuses) stabilized at 6.2% y/y. Should the outcome disappoint investors, increasing the odds for rate cut as soon as June, the British pound might reverse lower. In this case, it would be interesting to see if GBPUSD can preserve its medium-term upward pattern above the December-February resistance of 1.2770.

On Wednesday, traders will find out whether the UK economy faced some recovery at the start of the year. Specifically, forecasts point to a monthly GDP growth of 0.2% in January versus -0.1% previously.

Volatility in semiconductors --> Nvidia stock

Nvidia entered traders’ daily watch list after proving it is the king of the AI boom. On Friday, the non-stop rally continued to new heights, reaching a record high of $973, twice the closing price in December, driven by the US nonfarm payrolls signaling a potential rate cut in June.

The bulls, however, could not sustain the gains as missed revenue estimates from big box semiconductor retailers such as Costco and Broadcom weighed harshly on the stock, squeezing the price down by more than 5.0% to a low of $864.

Investors are now wondering whether the latest sharp correction is the start of a bearish cycle. From a technical perspective, more declines could emerge as the technical indicators seem to have peaked in the overbought zone. Yet, any potential bearish movements could back the buying-the-dip strategy as long as the stock holds comfortably above the 20-day simple moving average (SMA) and the previous low of $770.