19/01/2023 Daily Reports
- EUR/USD reversed its course after hitting a nine-month high around 1.0887 on Wednesday after US economic data could further cement the case for US Fed officials to slow down the pace of tightening. Additionally, the US Dollar found a bid and erased all of its losses at the time of writing. The EUR/USD exchanges hands at 1.0793, still above its opening price.
- Wall Street edged lower as crossing newswires announced that Microsoft and Amazon are set to slash 28K jobs. Therefore, investors’ moods dampened, as earlier US economic data showed signs of deterioration in the US economy. Data released showed that inflation continued to ease, with December’s US PPI sliding to 6.2% YoY, below estimates of 6.8%, while the core PPI advances by 5.5% YoY, beneath 5.7% forecasts.
- In the meantime, US Retail Sales plunged 1.1% MoM in December, below the downward revised November’s figures, which shrank by 1%. However, annually based were unchanged at 6%. Later, Industrial Production decreased by 0.7% MoM and 1.7% in Q4, as reported by the Federal Reserve.
- The EUR/USD pair is trading near the 1.0790, down for the day with bullish stance in daily chart. The pair still stabilized above 20 and 50 SMA, indicates bullish strength. Meanwhile, the 20 SMA continued accelerating north and developing far above longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0890, break above this level will extend the advance to 1.0950.
- Technical readings in the daily chart support the bullish stance. The RSI indicator is above 50. The Momentum indicator stabilizes in positive territory, indicating bullish potentials. On downside, the immediate support is 1.0760 and below this level will open the gate to 1.0710.
- GBP/USD was propelled towards last month’s six-month high of 1.2446, reaching a high of 1.2435 on the day so far from a low of 1.2253. However, a recent rally in the US Dollar and softer US stocks are fuelling a sell-off in the pound currently, dragging the price a buck lower to $1.2335.
- The GBP/USD bulls got what they wished for from the United Kingdom’s Consumer Price Index that showed while inflation fell to a three-month low of 10.5% in December, it remains near 40-year highs. Specifically, the increase in services inflation and accelerating food and drink prices are a cause for some concern for the Bank of England’s policy-makers.
- Given a gloomy domestic economic outlook and recession fears due to high inflation and a cost-of-living crisis, this may ultimately weigh on the British Pound. Nevertheless, a hawkish Bank of England could inject some resilience into the pound.
- The GBP/USD offers bullish stance in daily chart. Cable stabilizes above 20 and 50 SMA, indicating bullish strength in short term. Meanwhile, the 20 and 50 SMA continues accelerating north and developing above 200 SMA, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.2450 with a break above it exposing to 1.2670.
- Technical readings in the daily chart support the bullish stances. RSI indicator stabilizes around 62, while the Momentum indicator stabilizes above the midline, suggesting upward potentials. On downside, the immediate support is 1.2250, unable to defend this level will resume the decline to 1.2150.
- Gold price continued two days of straight losses, declined on Wednesday, as the US Dollar hold daily gains in US session, as shown by the US Dollar Index. At the time of writing, XAU/USD exchanges hand at $1904.
- Wall Street opened in the green, bolstered by US data. The US Commerce Department reported that December Retail Sales plunged -1.1% MoM, below estimates of a -0.8% contraction, tumbling for two consecutive months. November figures were downward revised to -1.0% from -0.6%. Retail Sales on an annual basis rose 6%, unchanged from November’s data.
- In the meantime, the US Dollar Index, which tracks the buck’s value against a basket of six currencies, tumbled to eight-month lows around 101.52 but lately has recovered some ground and exchanged hands around 101.87. Another reason that keeps the XAU/USD underpinned is falling US Treasury bond yields, with the 10-year benchmark note rate plunging below 3.40%, at 3.390%, as it slides 16 bps.
- Gold price stabilized around 1904, slightly down for the day and bullish in the daily chart. The gold price still stabilized above 20 and 50 SMA, suggesting bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and developing above 50 SMA, indicating bulls not exhausted yet. On upside, the immediate resistance is 1930, break above this level will open the gate for more advance to 1950 area.
- From a technical perspective, the RSI indicator holds above the mid-line and stabilizes around 68, still on a bullish strength. The Momentum indicator continues developing in positive territory, suggests more upside potentials. On downside, the immediate support is 1896, below this area may resume the decline to 1868.
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- The USD/JPY clings to gains after hitting a daily high of 131.57 following the release of the BoJ monetary policy decision, which sparked a 400 pip rally. However, throughout the North American session, the Japanese Yen stages a comeback against its counterpart, the US Dollar. At the time of writing, the USD/JPY is trading at 128.80.
- As investors digest the BoJ’s dovish stance, the emergence of aggressive US Dollar selling turns out to be a key factor leading to the USD/JPY pair’s sharp intraday fall of over 350 pips. The USD adds to its heavy losses and drops to a seven-month low following the release of softer-than-expected US macro data, which boosted bets for smaller rate hikes by the Federal Reserve.
- Data published by the US Bureau of Labor Statistics showed that the Producer Price Index (PPI) declined to the 6.2% YoY rate in December. This was well below consensus estimates for a fall to 6.8% from November’s downwardly revised reading of 7.3%. The data further points to easing inflationary pressure, which could allow the Fed to slow the pace of its policy tightening.
- The USD/JPY pair stabilized around 128.80, up for the day and bearish in the daily chart. The price maintains the downward slope and develops below all main SMAs, suggests bearish strength in short term. Meanwhile, 20 SMA continued accelerating south and developing below longer ones, indicating bears not exhausted. On upside, overcome 131.60 may encourage bulls to challenge 133.00, break above that level will open the gate to 134.70.
- Technical indicators still suggest the bearish strength. RSI fell below 37, while the Momentum indicator stabilize in negative territory, suggests downward potentials. On downside, the immediate support is 127.20, break below this level will open the gate to 126.00 area.
- DJI continued the decline on Wednesday, dropped from intraday high of 34130 to 33365. It hold near the bottom to ended the day, indicates bearish sign in the hourly chart. Right now market is standing far below all main SMAs, suggests a bearish strength. Meanwhile, 20 and 50 SMA continues accelerating south and heading towards 200 SMA, suggests bears not exhausted yet. On upside, overcome 34250 may encourage bulls to challenge 34490, break above that level will open the gate to 34700.
- Technical indicators also suggest the bearish movement, developing below the mid-line. RSI stabilized around 12, while the Momentum indicator hovering far below the mid-line, suggests downside potentials. On downside, the immediately support is 33360, break below this level will open the gate for more decline to 33200 area.
- The Brent continued the rally on the first half of the day but failed to hold the gains and under the sell pressure on US session, tumbled from 87.84 to low 84.55 and hold near the bottom to ended Wednesday, bearish in the hourly chart. The price stabilizes below 20 and 50 SMA, suggests bearish strength in short term. Meanwhile, the 20 SMA started turning south and heading towards 50 SMA, indicates bears not exhausted yet. On upside, overcome 85.70 may encourage bulls to challenge 86.40, break above that level will open the gate to 87.80.
- Technical indicators also suggest bearish movement, hovering below the midline. RSI drops to 32, while the Momentum index is well below the midline, suggests downward potentials. On downside, the immediately support is 83.20, break below this level will open the gate for more decline to 82.20 area.
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