27/01/2023 Daily Reports
- The European currency now gives aways some gains after motivating EUR/USD to climb to fresh 2023 peaks near 1.0930 earlier in the session on Thursday. The pair ended the day around 1.0890, still bullish in the daily chart.
- Despite the current knee-jerk, the yearly rally in EUR/USD remains well in place and looks to extend further the recent breakout of the 1.0900 barrier, always on the back of persistent cautiousness among investors ahead of the upcoming FOMC and ECB interest rate decisions.
- In the domestic calendar, Consumer Confidence in Italy eased against consensus to 100.9 in January, while Business Confidence improved to 102.7 in the same period. Across the pond, the flash Q4 GDP Growth Rate will take centre stage seconded by Durable Goods Orders, Initial Claims, New Home Sales, Trade Balance and the Chicago Fed National Activity Index.
- The EUR/USD pair is trading near the 1.0890, 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 1.0930, break above this level will extend the advance to 1.1000.
- Technical readings in the daily chart support the bullish stance. The RSI indicator is above 66. The Momentum indicator stabilizes in positive territory, indicating bullish potentials. On downside, the immediate support is 1.0830 and below this level will open the gate to 1.0760.
- GBP/USD dipped as the release of US economic data bolstered the US Dollar, which is staging a comeback after being battered throughout the week. It recovered some losses and back to above 1.2400 to end the day, still bullish in the daily chart.
- Growth remains the reason driving the financial markets. In the fourth quarter, the United States (US) economy grew by 2.9% QoQ, while Q3 printed a 3.2% jump, as the US Department of Commerce reported. For 2022, the economy expanded by 2.1%, lower than in 2021, 5.9% YoY.
- At the same time, Durable Good Orders for December rose 5.6% MoM, recovering from November’s -2.1% contraction. Elsewhere, US Department of Labor data showed the labor market resilience. Initial Jobless Claims for the week ending January 21 fell to 186K, below estimates of 205K.
- 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 64, while the Momentum indicator stabilizes above the midline, suggesting upward potentials. On downside, the immediate support is 1.2260, unable to defend this level will resume the decline to 1.2150.
- Gold price retreats after hitting a nine-month high of $1949.10 and dips beneath the $1920 mark, following the release of the GDP preliminary reading in the US, amongst other data. Therefore, the XAU/USD is trading at 1929, below the opening price by more than 0.5%.
- US equity futures rose on the release of Q4’s GDP, while Gold extended its losses. The US economy grew at a solid 2.9% QoQ, above estimates of 2.6%, while for Q3, it rose 3.2%, in data revealed by the US Commerce Department. Meanwhile, for the entire year of 2022, the US economy expanded by 2.1%, less than the 5.9% registered in 2021. The report highlighted that consumer spending was the main driver of economic growth at the start of Q4. Spending remains underpinned by a robust labor market and excess savings.
- At the same time, the US DoL reported that Initial Jobless Claims for the week ending on January 21 dropped 6K to a seasonally adjusted 186K, below the estimates of 205 K. In other data, Durable Good Orders rebounded from a -2.1% contraction in November to 5.6% in December, as data for the US Commerce Department showed. However, core New Orders contracted by -0.1% MoM, aligned with the consensus, as the US economy feels the pain of 425 bps of tightening by the Fed.
- Gold price stabilized around 1929, 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 and 50 SMA continued accelerating north and developing above 200 SMA, indicating bulls not exhausted yet. On upside, the immediate resistance is 1950, break above this level will open the gate for more advance to 1982 area.
- From a technical perspective, the RSI indicator holds above the mid-line and stabilizes around 67, still on a bullish strength. The Momentum indicator continues developing in positive territory, suggests more upside potentials. On downside, the immediate support is 1918, below this area may resume the decline to 1895.
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- The USD/JPY bounces from weekly lows reached early Thursday at 129.02 and reclaimed the 130.00 psychological level. Nevertheless, the USD/JPY fell short and hit a daily high at 130.61, settling around current exchange rates. At the time of writing, the USD/JPY is trading at 130.34.
- The intraday US Dollar recovery from the vicinity of an eight-month low picks up pace after the Advance US GDP report showed that the economy expanded by 2.9% annualized pace in the fourth quarter. This was below the 3.2% growth recorded in the previous quarter, though it was better than consensus estimates for a reading of 2.6%. Adding to this, the headline Durable Goods Orders smashed expectations and rose 5.6% in December, providing a modest lift to the Greenback and pushing the USD/JPY pair higher.
- The data, however, did little to push back against market expectations for a less aggressive policy tightening by the Fed. In fact, the markets are still pricing in a smaller 25 bps Fed rate hike move in February, which is evident from a rather muted reaction in the markets. This, in turn, is holding back the USD bulls from placing aggressive bets. Apart from this, fresh speculation that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) caps gains for the USD/JPY pair.
- The USD/JPY pair stabilized around 130.23, 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 131.10 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 to 44, while the Momentum indicator stabilize in negative territory, suggests downward potentials. On downside, the immediate support is 129.00, break below this level will open the gate to 128.00 area.
- DJI continued the advance, climbed to high 33400 area after hit intraday low 33700. It hold near the top and ended Thursday around 33990, indicates bullish sign in the hourly chart. Right now market is standing above 20 and 50 SMAs, suggests a bullish strength. Meanwhile, 20 SMA continued accelerating north and heading towards 200 SMA, suggests bulls not exhausted yet. On upside, overcome 34130 may encourage bulls to challenge 34500, break above that level will open the gate to 34680.
- Technical indicators also suggest the bullish movement, developing above the mid-line. RSI stabilized around 64, while the Momentum indicator hovering well above the mid-line, suggests upside potentials. On downside, the immediately support is 33700, break below this level will open the gate for more decline to 33350 area.
- The Brent started the advance on Friday, bounced from intraday low 85.75 to high 88.01. It retreated modestly and ended Friday around 87.50. The price stabilized above 20 and 50 SMA, suggests bullish strength in the hourly chart. Meanwhile, the 20 SMA continued accelerating north and developing above 50 and 200 SMA, indicates bulls not exhausted yet. On upside, overcome 88.00 may encourage bulls to challenge 89.20, break above that level will open the gate to 90.50.
- Technical indicators also suggest bullish movement, hovering above the midline. RSI climbed to 58, while the Momentum index stabilizes in positive territory, suggests upward potentials. On downside, the immediately support is 87.00, break below this level will open the gate for more decline to 85.30 area.
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