Market Updates

Market Update - 22 March 2023

Publish date: Wed, 22 Mar 2023, 05:32 PM
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Market Updates

EUR/USD struggles for clear directions around five-week high inside short-term ascending triangle. Sustained trading above 100-DMA, upbeat oscillators favor four-day uptrend but pre-Fed anxiety challenges traders. Mid-February high adds strength to 1.0800 upside hurdle; Euro sellers can return on 1.0700 break. (FXStreet)

USD/JPY lacks any firm direction on Wednesday and oscillates in a narrow trading band. A subdued USD price action acts as a headwind; a positive risk tone lends some support. Traders also seem reluctant and prefer to wait for the highly-anticipated FOMC decision. (FXStreet)

GBP/USD catches fresh bids on Wednesday and reverses a major part of the overnight losses. The stronger UK CPI report lifts bets for at least a 25 bps BoE rate hike and boosts the Sterling. Expectations that the Fed will soften its hawkish stance undermine the USD and lend support. (FXStreet)

NZD/USD regains some positive traction on Wednesday and snaps a two-day losing streak. Bets for a less hawkish Fed continue to weigh on the USD and act as a tailwind for the pair. The upside remains limited as investors await the highly-anticipated FOMC policy decision. (FXStreet)

AUD/USD grinds near intraday high inside a one-week-old ascending triangle. Treasury bond yields fade the last two days’ recovery as receding fears of banking sector turmoil jostle with pre-Fed anxiety. Australia’s Westpac Leading Index dropped for consecutive seventh month in February. Fed’s 0.25% rate hike is given but dot-plot, Powell’s speech could change the scene. (FXStreet)

USD/CAD retraces to the multi-tested descending trendline. USD/CAD under pressure despite falling oil prices. The expectation for 25 bps is rising for the Fed meeting. USD/CAD is sliding downward, supported by a descending trend line that starts from the March high at the 1.3862 level on the daily timeframe. The broad-based US Dollar weakness since last week keeps USD/CAD under pressure despite falling oil prices. (FXStreet)

EUR/GBP takes offers to refresh intraday low, pares the biggest daily gains in three weeks. UK CPI rose to 10.4% in February versus 0.6% expected and -0.6% prior. Former UK PM Johnson joins ERG, DUP to renew Brexit woes. Banking crisis may probe ECB’s Lagarde to soften hawkish bias. (FXStreet)

USD/CHF licks its wounds near one-week low, picks up bids of late. Cautious optimism in the market, led by banking sector headlines, keeps US Dollar buyers hopeful. Expectations of SNB’s dovish rate hike also favor USD/CHF bulls. (FXStreet)

AUD/JPY has witnessed a decent rally after Japan Matsuno promised a more than two trillion Yen package. The Australian Dollar is showing strength despite the RBA proposing a pause in the rate-hiking cycle from April. The cross has also delivered a breakout of the Symmetrical Triangle, which warrants a volatility expansion ahead. (FXStreet)

GBP/JPY is aiming to deliver a breakout of the Inverted H&S as BoE would continue its policy-tightening spell. The 20-period EMA at 161.77 is providing cushion to the Pound Sterling bulls. A break into the 60.00-80.00 range by the RSI (14) would activate the bullish momentum. (FXStreet)

USD/INR is oscillating in a narrow range above 82.60 ahead of Fed policy. Deepening odds of a smaller interest rate hike by the Fed are also weighing on the return offered on US bonds. Capital inflows in India could be trimmed if the banking turmoil stretches further. (FXStreet)

USD/MXN jostles with the 200-EMA, 100-EMA confluence to prod two-day downtrend. Bearish MACD signals, downbeat RSI (14) suggest further declines. Seven-week-old horizontal support appears tough nut to crack for bears. Buyers need successful break of multi-day-old resistance line for conviction. (FXStreet)

XAU/USD retraces from $2,000 as US Treasury bond yield surges on Fed’s backstop. Gold prices poised for potential volatility amid upcoming Fed meeting. Gold price could fall further if the dot plot remains stretched. (FXStreet)

Silver price prints three-day losing streak, confirms two-week-old bearish chart pattern. Bearish MACD signals add strength to downside bias for XAG/USD price. 200-SMA, $21.30 can act as buffers during theoretical targeting surrounding $17.10. Silver buyers need validation from golden Fibonacci ratio. (FXStreet)

The Nasdaq 100 soared on Tuesday, rallying 1.42% to 12,741, despite a sharp rise in U.S. Treasury yields. Equity market gains were broad-based in the tech space amid risk-on mood ahead of the FOMC decision, with the VIX, known as Wall Street's fear gauge, plunging more than 11% and posting its worst two-day drop since 2022. Positive sentiment was bolstered by speculations that the worst of the recent banking sector turmoil is over thanks to coordinated actions by government authorities to shore up the banking system, including emergency central bank lending and the U.S. Treasury Department's pledge to protect smaller lenders if necessary. (DailyFX)

The index navigates the lower end of the range near 103.00. The Fed is largely expected to hike rates by 25 bps. Investors’ attention will be on Powell’s presser and the dots plot. The USD Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades within a tight range and keeps business near the 103.00 region on Wednesday. (FXStreet)

The pound rose and UK government bonds fell as traders firmed up bets on a quarter-point hike by the Bank of England on Thursday after inflation unexpectedly accelerated. Shorter-dated gilts — which are particularly sensitive to changes in monetary policy — led the drop, with the two-year yield up as much as 20 basis points. The UK currency climbed 0.6% to $1.2286, the strongest in over six weeks. (Bloomberg)

The New Zealand dollar, one of this year’s worst-performing major currencies, is emerging as a prime choice to hedge against potential US dollar strength should the global economic outlook darken. The kiwi has lost about 2.6% in 2023, beating only the Norwegian krone among Group-of-10 currencies. The slide took place in the context of a modestly weaker greenback, with the Bloomberg Dollar Spot Index dropping 0.4% this year. (Bloomberg)

WTI: Upside appears capped by $70.00. Prices of the barrel of the WTI advanced markedly on Tuesday. The move was amidst increasing open interest and favours the continuation of the rebound in the very near term. That said, the next hurdle of note for the commodity comes at the key $70.00 mark per barrel. (FXStreet)

Bitcoin registered small daily gains on Tuesday and continues to in a tight range above $28,000 early Wednesday. After having lost nearly 3% on Monday, Ethereum regained its traction and rose nearly 4% on Tuesday. ETH/USD fluctuates in a tight channel at around $1,800 in the early European session. (FXStreet)

Source: FXStreet, DailyFX, Bloomberg

Disclaimer: This information does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties on the Internet.

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