08/03/2023 Daily Reports
Support Level: 1.0530 - 1.0470 - 1.0350 Resistance Level: 1.0700 - 1.0800 - 1.0900
EUR/USD
- EUR/USD keeps falling as we move into late US trade in what has been a maximum drop in the single currency following uber-hawkish rhetoric from the Federal Reserve’s chairman on Tuesday who testified to Congress. The pair ended the day around 1.0550, bearish in the daily chart.
- The main words that got the US Dollar going coming from the Fed’s chair Powell were, “the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.“
- As a consequence, the yield on the US 10-year Treasury note rose to 4% before easing back to 3.96%, remaining marginally below the three-month high of 4.07% touched on March 2nd as investors assessed the pace of future rate hikes by the Federal Reserve. This gave the greenback a boost. The DXY index, a measure of the US Dollar vs. a basket of currencies, vaulted 105 the figure in a move that started out from 104.43 and kept going until 105.435.
- The EUR/USD pair is trading near the 1.0550, 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 flat but continued developing below 50 SMA, 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 41. 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.
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Support Level: 1.1800 - 1.1640 - 1.1400 Resistance Level: 1.1920 - 1.2065 - 1.2150
GBP/USD
- GBP/USD plunges over 100 pips as the US Federal Reserve (Fed) Chairman Jerome Powell testifies at the US Senate on Tuesday. The US Dollar is rising despite US Treasury bond yields dropping. At the time of writing, the GBP/USD is trading at 1.1828 after hitting a daily high of 1.2065.
- In prepared remarks for his appearance at the US Senate, the Federal Reserve Chair Jerome Powell commented that the Fed is ready to increase the speed of rate hikes. Powell added, “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”
- The US Dollar Index, a gauge of the buck’s value against its peers, hit a fresh nine-week high at 105.435 before retracing to current levels of 105.421, up 0.86% in the day. US Treasury bond yields, namely the 10-year yield, pierced the 4% threshold before resting at 3.968%.
- The GBP/USD offers bearish stance in daily chart. Cable still 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 1.1920 with a break above it exposing to 1.2065.
- Technical readings in the daily chart support the bearish stances. RSI indicator stabilizes around 38, while the Momentum indicator stabilizes below the midline, suggesting downward potentials. On downside, the immediate support is 1.1800, unable to defend this level will resume the decline to 1.1640.
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Support Level: 1805 - 1776 - 1724 Resistance Level: 1858 - 1891 - 1918
XAU/USD
- Gold price accelerated to the downside following the release of Fed Chair Powell’s remarks. XAU/USD bottomed at $1,815, the lowest level in a week. It is falling almost $30 on Tuesday, the worst day in a month. At the time of typing, the XAU/USD exchanges hands at $1814.5.
- Federal Reserve Chairman Jerome Powell mentioned in prepared remarks that strong economic data will likely lead to higher interest rates than previously thought, in order to curb inflation. The speech was seen as hawkish by market participants. The odds of a 50 basis points rate hike jumped. According to interest-rate futures tracked by CME Group, market-implied probabilities of a 50 bps increase at the March FOMC meeting rose from nearly 30% to 50%.
- US Treasury bonds collapsed. The US 10-year yield rose from nearly 3.94% to above 4% and then pulled back; the 2-year yield hit at 4.97%, the highest level since 2008.
- Gold price stabilized around 1814, 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 200 SMA, indicating bears not exhausted yet. On upside, the immediate resistance is 1858, break above this level will open the gate for more advance to 1891 area.
- From a technical perspective, the RSI indicator holds below the mid-line and stabilizes around 38, on a bearish strength. The Momentum indicator hold just below the midline, suggests downward potentials. On downside, the immediate support is 1805, below this area may resume the decline to 1776.
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Support Level: 135.20 – 134.00 – 132.80 Resistance Level: : 137.20 – 138.20 – 139.60
USD/JPY
- The USD/JPY climbs 0.65% on Tuesday as the US Fed Chair Powell’s testimony began at the US Congress. Sentiment shifted sour after US equities opened in the green. Nevertheless, as Powell took the stand, he rocked the boar. At the time of writing, the USD/JPY is exchanging hands at 137.15.
- In a speech prepared by the Federal Reserve Chair Powell, he said that the Fed would need to raise rates more than expected and that the pace of rate hikes could increase. He added, “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”
- The US Dollar Index, is rallying 0.84%, up at 105.161. At the same time, the US 10-year Treasury bond yield recovered its lost ground and is back above the 4% threshold, a headwind for the USD/JPY. On the Japanese front, in its final policy meeting with Governor Haruhiko Kuroda this week, Japan’s central bank will maintain its very loose monetary stance. Tuesday’s data showed that real wages in Japan fell the most in nine years in January amidst four-decade-high inflation squeezing Japanese purchasing power.
- The USD/JPY pair stabilized around 137.15, 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 137.20 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 66, 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.
Support Level: 32800 - 32530 - 32200 Resistance Level: 33000 - 33270 - 33590
DJI
- DJI suffered big losses on Tuesday post Fed Powell’s speech, plunged from intraday high 33510 area to low 32840. It hold near the bottom and ended the day around 32870, down for the day and indicates bearish sign in the hourly chart. Right now market is standing below 20 and 50 SMA, suggests bearish strength. Meanwhile, 20 and 50 SMA started turning south and heading towards 200 SMA, suggests bears not exhausted yet. On upside, overcome 33000 may encourage bulls to challenge 33270, break above that level will open the gate to 33590.
- Technical indicators suggest the bearish movement. RSI stabilizes around 16, while the Momentum indicator stabilizes in negative territory, suggests bearish potentials. On downside, the immediately support is 32800, break below this level will open the gate for more decline to 32530 area.
Support Level: 82.40 – 80.30 – 79.00 Resistance Level: 84.30 – 85.50 – 86.80
BRENT
- Brent suffered big losses on Tuesday post Fed Powell’s speech, plunged from intraday high 86.74 area to low 82.84. It hold near the bottom and ended the day around 83.10. The price currently stabilizes below 20 and 50 SMA, suggests bearish strength in the hourly chart. Meanwhile, the 20 SMA started turning south and heading towards longer ones, indicates bears not exhausted yet. On upside, overcome 87.00 may encourage bulls to challenge 89.00, break above that level will open the gate to 91.50.
- Technical indicators also suggest bearish movement, hovering below the midline. RSI drops to 25, while the Momentum indicator stabilizes in negative territory, suggests downward potentials. On downside, the immediately support is 82.40, break below this level will open the gate for more decline to 80.30 area.
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