20/01/2023 Daily Reports
- Bulls remain in control of the sentiment around the single currency, with EUR/USD charting decent gains above the 1.0830 mark as the NY session draws to a close on Thursday.
- Indeed, the selling interest around the greenback allows the continuation of the improvement in the risk complex and helps with the pair’s upside bias, while hawkish ECB-speak also props up the march north in spot. From the ECB, the Accounts of the latest meeting showed an initial attempt to hike rates by 75 bps and some participants advocated for a quicker reduction of the APP.
- In the US calendar, Building Permits contracted 1.6% MoM in December and Housing Starts shrank at a monthly 1.4%. Additionally, Initial Claims went up by 190K in the week to January 14 and the Philly Fed Manufacturing Index improved to -8.9 for the current month.
- The EUR/USD pair is trading near the 1.0835, up 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 64. 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.
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- GBP/USD is higher on the day having traded up to 1.2395 in recent trade while the US Dollar tails off and gives flight to risky assets and risk-on forex such as GBP.
- The Great British Pound rallied from a low of 1.2312 as interest rate sentiment for the Bank of England continues to support the currency, Meanwhile, there are a number of themes in play: The US Dollar, for one, has been under pressure following yet more disinflationary economic data on Thursday that has shown that the US economy is losing momentum.
- On Thursday, while the Philadelphia Federal Reserve’s monthly manufacturing survey showed a notable improvement in the prices paid index, which skidded to 24.5 in January from 36.3 last month, the reading, however, which is a key measure of inflation at the producer level, was the lowest since August 2020.
- 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 65, 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.
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- Gold price snaps three days of losses and grinds higher on Thursday, lifted by a weak US Dollar and a dampened market mood, as Wall Street opened with losses. At the time of writing, XAU/USD exchanges hand at $1932, bullish in the daily chart.
- The prevalent risk-off mood – as depicted by a sea of red across the equity markets – benefits the safe-haven gold and exerts some upward pressure on the XAU/USD pair. Investors remain concerned about headwinds stemming from the worst yet COVID-19 outbreak in China. This, along with the protracted Russia-Ukraine war, has been fueling worries about a deeper global economic downturn.
- Furthermore, the weaker US economic data released on Wednesday sparks recession fears and weigh on investors’ sentiment. Meanwhile, The anti-risk flow, along with bets for smaller Fed rate hikes, drag the yield on the rate-sensitive two-year US government bond to its lowest level since October. This keeps the US Dollar bulls on the defensive and helps to lend support to the gold.
- Gold price stabilized around 1932, up 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 and 50 SMA continued accelerating north and developing above 200 SMA, indicating bulls not exhausted yet. On upside, the immediate resistance is 1936, break above this level will open the gate for more advance to 1960 area.
- From a technical perspective, the RSI indicator holds above the mid-line and stabilizes around 72, 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 reverses its course and edges lower late in the North American session, down by 0.33% on Thursday. Risk aversion weighed on the US Dollar, which extended its losses but was capped by the rise in US Treasury bond yields. At the time of writing, the USD/JPY is trading at 128.33 after hitting a daily high of 128.88.
- Wall Street continues to show a dampened mood. Thursday’s economic data in the US pointed to a tight labor market, as Initial Jobless Claims for the last week edged lower, by 190K less than the 214K consensus. Further data reported that the US housing market continues to deteriorate. Housing Starts and Building Permits missed estimates, while the Philadelphia Fed Manufacturing Index, although in contractionary territory at -8.9, improved compared to November’s -13.7 reading.
- The prevalent risk-off mood – as depicted by a sea of red across the equity markets – benefits the safe-haven Japanese Yen and exerts some downward pressure on the USD/JPY pair. Investors remain concerned about headwinds stemming from the worst yet COVID-19 outbreak in China. This, along with the protracted Russia-Ukraine war, has been fueling worries about a deeper global economic downturn.
- The USD/JPY pair stabilized around 128.40, down 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 129.50 may encourage bulls to challenge 131.60, break above that level will open the gate to 133.00.
- Technical indicators still suggest the bearish strength. RSI fell below 34, 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 Thursday, dropped from intraday high of 33380 area to 33070. It bounced modestly and ended the day around 33150, indicates bearish sign in the hourly chart. Right now market is standing below all main SMAs, suggests a bearish strength. Meanwhile, 20 and 50 SMA continues accelerating south and developing far below 200 SMA, suggests bears not exhausted yet. On upside, overcome 33500 may encourage bulls to challenge 33850, break above that level will open the gate to 34130.
- Technical indicators also suggest the bearish movement, developing below the mid-line. RSI stabilized around 35, while the Momentum indicator hovering far below the mid-line, suggests downside potentials. On downside, the immediately support is 33000, break below this level will open the gate for more decline to 32700 area.
- The Brent made a quick rally after hit intraday low 83.70 area. It got some support there and climbed to high 86.84 and hold near the top to ended Thursday, bullish in the hourly chart. The price stabilizes above 20 and 50 SMA, suggests bearish strength in short term. Meanwhile, the 20 SMA started turning north and heading towards 50 SMA, indicates bulls not exhausted yet. On upside, overcome 87.80 may encourage bulls to challenge 89.20, break above that level will open the gate to 90.00.
- Technical indicators also suggest bullish movement, hovering above the midline. RSI climbs to 65, while the Momentum index is well above the midline, suggests upward potentials. On downside, the immediately support is 85.00, break below this level will open the gate for more decline to 83.70 area.
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