17/02/2023 Daily Reports
EUR/USD
- EUR/USD extends the multi-session consolidative phase around the 1.0700 neighbourhood so far on Thursday. EUR/USD now extends the selling pressure seen in the previous session in response to another bullish attempt in the greenback.
- Indeed, the pair revisited the area below 1.0700 the figure after US Producer Price rose more than expected a monthly 0.7% in January and 6.0% from a year earlier. Still on the strong side, weekly Initial Claims increased by 194K in the week to February 11, showing once again the persistent good health of the labour market.
- On the not-so-bright side, Building Permits expanded at a monthly 0.1% in January – or 1.339M units – Housing Starts shrank 4.5% MoM – or 1.309M units – and the Philly Fed Manufacturing Index disappointed everybody after declining to -24.3 for the current month.
- The EUR/USD pair is trading near the 1.0690, unchanged 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 1.0800, break above this level will extend the advance to 1.0930.
- Technical readings in the daily chart support the bearish stance. The RSI indicator stabilizes around 45. The Momentum indicator holds below the midline, indicating downward potentials. On downside, the immediate support is 1.0650 and below this level will open the gate to 1.0580.
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GBP/USD
The GBP/USD is subdued in the mid-North American session spurred by a jump in producer inflation in the US. In contrast, Wednesday’s UK inflation data weakened the Pound Sterling as inflation slowed. Hence, the GBP/USD is trading around the 1.2015, below its opening price.
The US Bureau of Labour Statistics revealed that the Producer Price Index in January increased by 0.7% from December, which was higher than the expected jump of 0.4%. Excluding items prone to rapid price changes, the so-called core PPI rose by 0.5% vs. an estimated increase of 0.3%. Although the year-over-year data was lower than the previous month, the monthly figures indicate that inflation is persistently high and may require additional actions by the Federal Reserve to address it.
Across the pond, a softer Consumer Price Index (CPI) in the UK, down to 10.1% from 10.5% in December, on an annual basis. UK bond yields eased after the data release as a reflection that the Bank of England (BoE) would not need to tighten monetary conditions aggressively.
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 1.2080 with a break above it exposing to 1.2190.
Technical readings in the daily chart support the neutral to bearish stances. RSI indicator stabilizes around 40, while the Momentum indicator stabilizes below the midline, suggesting downward potentials. On downside, the immediate support is 1.1960, unable to defend this level will resume the decline to 1.1840.
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XAU/USD
- Gold price attracts some buying on Thursday and recovers a part of the previous day’s losses to the $1,830 area, or its lowest level since January 6. The XAU/USD sticks to its gains through the early European session and is currently hovering near the top boundary of its daily range, around the $1,837 level.
- The US Dollar retreats from a six-week high touched on Wednesday amid a modest downtick in the US Treasury bond yields. This, in turn, is seen as a key factor driving some flows towards the US Dollar-denominated Gold price. Apart from this, fears of a global recession lend additional support to the safe-haven precious metal, though any meaningful upside still seems elusive.
- Furthermore, several FOMC policymakers, including Fed Chair Jerome Powell, recently stressed the need for additional interest rate hikes to fully gain control of inflation. This should act as a tailwind for the US bond yields and lend support to the buck, though not for Gold.
- Gold price stabilized around 1837, unchanged 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 started turning south and heading towards longer ones, indicating bears not exhausted yet. On upside, the immediate resistance is 1872, 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 below the midline, suggests downward potentials. On downside, the immediate support is 1827, below this area may resume the decline to 1800.
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USD/JPY
- The USD/JPY pair comes under some selling pressure and snaps a three-day winning streak to the highest level since January 6, around the 134.35 area touched the previous day. The pair remains on the defensive through the first half of the European session and is currently placed around the 133.90 region, just a few pips above the daily low.
- The US Dollar retreats from a six-week high amid a modest downtick in the US Treasury bond yields and turns out to be a key factor dragging the USD/JPY pair lower. The JPY, on the other hand, is underpinned by speculations that the BoJ governor candidate Kazuo Ueda will dismantle the yield curve control. Apart from this, looming recession risks further benefit the JPY’s relative safe-haven status and weigh on the major.
- The downside for the USD/JPY pair, however, seems cushioned amid the prospects for further policy tightening by the Fed, which should act as a tailwind for the US bond yields and the Greenback. In fact, the markets are now pricing in at least a 25 bps lift-off at the next two FOMC meetings in March and May. The bets were reaffirmed by the recent US macro data, which pointed to stubbornly high inflation and a resilient economy, despite rising borrowing costs.
- The USD/JPY pair stabilized around 133.90, down for the day and bullish in the daily chart. The 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 134.70 may encourage bulls to challenge 136.70, break above that level will open the gate to 138.20.
- Technical indicators suggest the bullish strength. RSI stabilizes around 60, while the Momentum indicator stabilizes in the positive territory, suggests upward potentials. On downside, the immediate support is 132.50, break below this level will open the gate to 131.50 area.
DJI
- DJI plunged to the daily low near 33700 area on the last 2 hours of the day in US session, declined from 34000 area to 33700 and ended the day nearby, down for the day and indicates bearish sign in the hourly chart. Right now market is standing between 20 and 50 SMA, suggests bearish strength. Meanwhile, 20 SMA started turning south and heading towards longer one, suggests bears not exhausted yet. On upside, overcome 34100 may encourage bulls to challenge 34370, break above that level will open the gate to 34550.
- Technical indicators suggest the bearish movement, developing below the mid-line. RSI stabilizes around 32, while the Momentum indicator stabilizes in the negative territory, suggests downward potentials. On downside, the immediately support is 33700, break below this level will open the gate for more decline to 33550 area.
BRENT
- The Brent still consolidated in the familiar range, climbed to intraday high 86.20 but trimmed all the gains and ended the day around 84.65. The price currently stabilizes below 20 and 50 SMA, suggests bearish strength in the hourly chart. Meanwhile, the 20 SMA and 50 SMA started turning south and heading towards 200 SMA, 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 90.00.
- Technical indicators also suggest bearish movement, hovering below the midline. RSI drops to 42, while the Momentum indicator stabilizes in negative territory, suggests downward potentials. On downside, the immediately support is 84.00, break below this level will open the gate for more decline to 83.00 area.
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