03/03/2023 Daily Reports
- The EUR/USD loses traction in the mid-North American session and trades below its opening price by 0.83%, below the 1.0600 mark. Reasons like unemployment claims in the US easing triggered investors’ reaction, that perhaps their inflation view is wrong, sending US bond yield skyrocketing. Hence, the USD strengthened to the Euro detriment. At the time of writing, the EUR/USD trades at 1.0575.
- The US Department of Labour, revealed that the number of people who filed for unemployment benefits for the first time in the week ending on February 25 was 190K, which was lower than the 195K predicted by experts. The market reacted negatively, sending US Treasury bond yields above the 4% threshold and underpinning the US Dollar.
- Meanwhile, the Fed and the ECB are expected to raise rates. The former would likely hike 25 bps, as shown by money market futures, but further data to be revealed ahead of March’s meeting could put into discussion a 50 bps rate hike. On the European side, the ECB is leaning toward 50 bps, though recent data could open the door for higher rates.
- The EUR/USD pair is trading near the 1.0590, down for the day with bearish stance in daily chart. The pair still stabilized below 20 and 50 SMA, indicates bearish strength. Meanwhile, the 20 SMA started turning south and heading towards longer ones, suggests bears not exhausted yet. On upside, the immediate resistance is 1.0700, break above this level will extend the advance to 1.0800.
- Technical readings in the daily chart support the bearish stance. The RSI indicator stabilizes around 42. The Momentum indicator holds below the midline, indicating downward potentials. On downside, the immediate support is 1.0530 and below this level will open the gate to 1.0470.
- The GBP/USD retraces back below the 1.2000 figure after US economic data warranted further tightening by the US Fed, as reflected by the US Treasury bond yields reaction. At the time of typing, the GBP/USD exchanges hand at 1.1940, below its opening price by 0.66%.
- On Thursday, the US Department of Labour announced that Initial Jobless Claims for the week ending on February 25 were lower than the 195K predicted by analysts, coming in at 190K. The 4-week moving average, which helps to even out fluctuations from week to week, was at 193K and showed a slight increase from the previous week’s average of 191K. The GBP/USD extended its losses on the headline and printed a fresh daily low of 1.1924 before reversing its course.
- The lack of UK economic data keeps the GBP/USD pair leaning on the dynamics of the US Dollar and the Bank of England Chief economist Huw Pill. Pill commented that economic activity in the UK may be stronger than projected and that inflation risks are skewed to the upside.
- The GBP/USD offers bearish stance in daily chart. Cable stabilizes below 20 and 50 SMA, indicating bearish strength in short term. Meanwhile, the 20 SMA continued accelerating south and heading towards longer ones, suggests bears not exhausted yet. On upside, The immediate resistance is 1.2150 with a break above it exposing to 1.2270.
- Technical readings in the daily chart support the bearish stances. RSI indicator stabilizes around 41, while the Momentum indicator stabilizes below the midline, suggesting downward potentials. On downside, the immediate support is 1.1910, unable to defend this level will resume the decline to 1.1840.
- Gold price rallied in the first half of the trading week, breaking out of a bearish trend that had dominated XAU/USD price action for most of February. This recent surge was halted early on Thursday as US Treasury bond yields gathered strength and supported the US Dollar. The pair ended the day around $1835.50, still bearish in the daily chart.
- Earlier in the week, soft data from the United States, led by decreasing inflation expectations in the CB Consumer Confidence report released on Tuesday, triggered some profit-taking on the US Dollar longs, as the reading might somewhat ease the pressure on the Federal Reserve to increase its interest rate hike path again. This was followed on early Wednesday by higher-than-expected Purchasing Managers Index (PMI) readings in China, which improved the market mood in Asia.
- In the meantime, investors are watching the US Treasury bond yields, which in the case of the benchmark 10-year bond, have seen a rally past the 4% resistance and is nearing levels not seen since last October. Due to the inverse correlation of Gold price with the US Treasury yields, this could provide further downward pressures on XAU/USD.
- Gold price stabilized around 1835, slightly down for the day and bearish in the daily chart. The gold price stabilized below 20 and 50 SMA, suggesting bearish strength in short term. Meanwhile, the 20 SMA continued accelerating south and heading towards longer ones, indicating bears not exhausted yet. On upside, the immediate resistance is 1845, break above this level will open the gate for more advance to 1870 area.
- From a technical perspective, the RSI indicator holds below the mid-line and stabilizes around 44, on a bearish strength. The Momentum indicator hold below the midline, suggests downward potentials. On downside, the immediate support is 1800, below this area may resume the decline to 1788.
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- The USD/JPY jumped to 137.08 following the release of US economic data on Thursday, reaching the highest level since December 20. The pair failed to hold above 137.00 and is hovering around 136.70.
- Data released on Thursday showed Initial Jobless Claims for the week ended February 24 dropped to 190K, better than the 195K of market consensus. Non-farm productivity during the fourth quarter was revised lower from 3% to 1.7% while Unit Labor Costs were revised from 1.1% to 3.2%. Federal Reserve Governor Christopher Waller and Minneapolis Fed President Neel Kashkari will speak later on Thursday.
- US economic figures add to the new scenario of a tight labor market and persistent inflation. The context adds pressure to the Fed and increases expectations of higher interest rates for longer. As a response, US yields moved further north. The 10-year US yield hit 4.08%, the highest since November, and the 2-year hit 4.93%, the highest since 2007.
- The USD/JPY pair stabilized around 136.70, up for the day and bullish in the daily chart. The price stabilizes above 20 and 50 SMA, suggests bullish strength in short term. Meanwhile, 20 SMA continued accelerating north and heading towards longer ones, indicating bulls not exhausted. On upside, overcome 137.10 may encourage bulls to challenge 138.20, break above that level will open the gate to 139.60.
- Technical indicators suggest the bullish strength. RSI stabilizes around 70, while the Momentum indicator stabilizes in the positive territory, suggests upward potentials. On downside, the immediate support is 135.20, break below this level will open the gate to 134.00 area.
- DJI advanced on Thursday, rallied from intraday low 32640 area to high above 33100 area. It retreated modestly and ended Thursday around 33050, up for the day and indicates bullish sign in the hourly chart. Right now market is standing above 20 and 50 SMA and stabilizing above the bearish trend line, suggests bullish strength. Meanwhile, 20 and 50 SMA started turning north and heading towards longer one, suggests bulls not exhausted yet. On upside, overcome 33100 may encourage bulls to challenge 33300, break above that level will open the gate to 33550.
- Technical indicators suggest the bullish movement. RSI stabilizes around 71, while the Momentum indicator stabilizes in positive territory, suggests bullish potentials. On downside, the immediately support is 32700, break below this level will open the gate for more decline to 32530 area.
- Brent continued the advance on first half of the day, climbed from low 83.84 to high 85.10. It failed to hold the gains in US session and ended the day around 84.50. The price currently stabilizes above 20 and 50 SMA, suggests bullish strength in the hourly chart. Meanwhile, the 20 SMA continued accelerating north and developing above longer ones, indicates bulls not exhausted yet. On upside, overcome 85.10 may encourage bulls to challenge 85.80, break above that level will open the gate to 87.00.
- Technical indicators also suggest bullish movement, hovering above the midline. RSI climbs to 55, while the Momentum indicator stabilizes in positive territory, suggests upward potentials. On downside, the immediately support is 83.80, break below this level will open the gate for more decline to 82.60 area.
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