28/02/2023 Daily Reports
- The EUR/USD is having so far the best day since February 1 on Monday, boosted by a weaker US Dollar across the board on the back of an improvement in risk sentiment and a retreat in Treasury yields. The pair is trading near 1.0610 after hitting earlier at 1.0532, the lowest level in seven weeks.
- Economic data released on Monday in the US showed a larger-than-expected decline in Durable Goods Orders. The headline dropped by 4.5%, against expectations of a 4% slide. Most details of the report were positive. The drop in January durable goods was due entirely to a reversal in aircraft orders, and core capital goods orders rose by the most in five months. The durables data thus add to a string of strong economic data for January and suggest while manufacturing activity may be set to weaken further.
- US yields are modestly lower for the day. Treasury bonds recovered ground early in the American session. The US 2-year bond yield peaked at 4.85% (highest since November) and is back below 4.80% as of writing. The retreat in US yields is helping EUR/USD move further north as the DXY drops by more than 0.55%.
- The EUR/USD pair is trading near the 1.0610, up 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 1.0630, break above this level will extend the advance to 1.0700.
- Technical readings in the daily chart support the bearish stance. The RSI indicator stabilizes around 40. 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.
- GBP/USD is recovering some ground after hitting a daily low of 1.1921 as speculations for the Brexit deal struck in Northern Ireland grow, which could bolster the Pound Sterling in the near term. In addition, worse-than-expected US economic data are a headwind for the greenback. At the time of typing, the GBP/USD is trading at 1.2052, above its opening price by 0.65%.
- The US Dollar is weakening across the board on a dismal Durable Goods Orders report. Durable Good Orders for January plunged below expectations, -4.5%, below the last month’s revised 5.1% figures, the lowest reading since April 2020. The so-called core orders excluding transport rose by 0.7%, above December’s -.0.4% drop.
- In the meantime, the latest headlines that the United Kingdom (UK) and the Eurozone (EU) agreed to a deal in Northern Ireland sponsored a leg-up in the GBP/USD, The US Dollar Index, a measure of the buck’s value against a basket of rivals, edged down 0.62%, at 104.594, retracing last Friday’s gains sponsored by a jump in the preferred gauge for inflation by the US FED, the Core PCE. Following goods orders data, the DXY dropped from around 105.100 toward current quotes.
- 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 1.2070 with a break above it exposing to 1.2150.
- Technical readings in the daily chart support the bearish stances. RSI indicator stabilizes around 46, while the Momentum indicator stabilizes below the midline, suggesting downward potentials. On downside, the immediate support is 1.1910, unable to defend this level will resume the decline to 1.1840.
- The Gold price is breaking the structure to the upside which could be paving the way for a buy-low opportunity for patient bulls for the sessions ahead. XAU/USD has come up from the Friday session lows of near $1,806 and has broken $1,814 structure, squeezing shorts with prospects of a prolonged squeeze for the week ahead with the January lows at $1,824 eyed.
- The Gold price pushed higher on Monday as the US Dollar was sold off in a risk-on environment as US data missed expectations, snapping a series of troublesome inflationary data from the US of late. The US Dollar index, DXY, dropped to a low of 104.546 on the day after hitting a seven-week peak, making gold less expensive for overseas buyers. The DXY recovered some of the losses later in the morning but remains under pressure, sliding from recovery session highs at 104.83 and moving back into test 104.70 bullish commitments.
- However, today’s Commerce Department’s Durable Goods report, which covers everything from air fryers to helicopters, showed a whopping 54.6% plunge in commercial aircraft/parts. This led to the US-made merchandise numbers falling by 4.5% in January, steeper than the 4.0% decline expected and a reversal from December’s downwardly revised 5.1% increase and the greenback dropped heavily.
- Gold price stabilized around 1817, up 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 longer ones, indicating bears not exhausted yet. On upside, the immediate resistance is 1830, break above this level will open the gate for more advance to 1860 area.
- From a technical perspective, the RSI indicator holds below the mid-line and stabilizes around 34, on a bearish strength. The Momentum indicator hold below the midline, suggests downward potentials. On downside, the immediate support is 1800, below this area may resume the decline to 1788.
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- The USD/JPY drops from around YTD highs around 136.55 and hits a daily low of 135.91 before reclaiming the 136.00 figure on Monday. At the time of writing, the USD/JPY falls 0.29%, trading at around 136.20s, underpinned by US bond yields, namely the 10-year benchmark note rate, down three basis points at 3.918%.
- A softer tone surrounding the US Treasury bond yields trigger a modest US Dollar pullback from a seven-week high, which, in turn, is seen exerting some downward pressure on the USD/JPY pair. That said, a combination of factors acts as a tailwind for the major and helps limit the downside, warranting some caution before positioning for any meaningful depreciating move.
- Apart from this, expectations that the Federal Reserve will stick to its hawkish stance should act as a tailwind for the US bond yields and lend some support to the Greenback. Meanwhile, the divergent Fed BoJ policy outlook supports prospects for the emergence of some dip-buying at lower levels and suggests that the path of least resistance for spot prices is to the upside.
- The USD/JPY pair stabilized around 136.20, slightly 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 136.70 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 68, 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.
- DJI rallied on the first half of the day, surged to intraday high 33210 area. However, it failed to hold that gains in US session and back to 32870 to ended Monday, indicates bearish sign in the hourly chart. Right now market is standing below 20 and 50 SMA, maintains the downward slope, suggests bearish strength. Meanwhile, 20 and 50 SMA continued developing far below 200 SMA, suggests bears not exhausted yet. On upside, overcome 33270 may encourage bulls to challenge 33550, break above that level will open the gate to 33740.
- Technical indicators suggest the neutral movement. RSI stabilizes around 47, while the Momentum indicator stabilizes above the midline, suggests upward potentials. On downside, the immediately support is 32800, break below this level will open the gate for more decline to 32650 area.
- The under the sell pressure on Monday, failed to breakout 83.60 strong resistance zone and back to 82.30 to ended the day. 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 83.60 may encourage bulls to challenge 84.30, break above that level will open the gate to 85.70.
- Technical indicators also suggest bearish movement, hovering below the midline. RSI drops to 46, while the Momentum indicator stabilizes in negative territory, suggests downward potentials. On downside, the immediately support is 81.70, break below this level will open the gate for more decline to 80.40 area.
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