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10.01.2023 Market Report


EUR/USD dribbles between 1.0720 and 1.0745 so far during early Tuesday as traders await more clues to extend the latest north-run. The major currency pair seesaws around the highest levels since June 2022 as bulls run out of steam as the US Dollar rebounds on doubts over the previous risk-on mood, as well as due to a rebound in the US Treasury yields.


GBP/USD is facing stubborn barricades around 1.2200 as anxiety soars ahead of Fed Powell’s speech. The US Dollar Index (DXY) is aiming to extend its recovery to near the round-level resistance of 103.00.


USD/JPY takes offers to refresh the intraday low near 131.60 as it prints a three-day downtrend even as the Tokyo inflation data fails to bolster hawkish expectations from the Bank of Japan (BOJ). The reason could be linked to the long weekend in Japan, as well as the wait for Fed Chair Jerome Powell’s speech and the US inflation data.


AUD/USD renews its intraday low around 0.6900 as the Aussie bulls step back from a five-month high while snapping a two-day uptrend during early Tuesday. In doing so, the major currency pair takes clues from the latest recovery in the US Dollar and the US Treasury bond yields. That said, optimism surrounding the Aussie-China trade ties fail to impress the traders of late, mainly due to the cautious mood ahead of this week’s key catalysts, as well as mixed concerns.


NZD/USD faded upside momentum after two-day advances, dropping to 0.6370 during early Tuesday’s Asian session. The Kiwi pair rose to the highest level in three weeks as headlines surrounding China, and the US data helped the NZD/USD bulls. However, recent comments from the Fed officials and the cautious mood ahead of this week’s critical data and events seem to challenge the pair buyers.


USD/CAD is struggling to extend its recovery move from 1.3350 in the early European session. The Loonie asset is displaying a sideways auction as investors are awaiting speeches from Federal Reserve (Fed) chair Jerome Powell and Bank of Canada (BoC) Governor Tiff Macklem for fresh cues.


S&P500 futures are displaying a subdued performance after a corrective move on Monday as equities failed to extend a rally. Stretched upside in stocks triggered long liquidation. The US Dollar Index (DXY) has refreshed its seven-month low at around 102.50 led by soaring recession fears after a meaningful contraction in economic activities and less-hawkish monetary policy projections after a sheer drop in wage inflation.


Oil edged lower on Tuesday on expectations that further interest rate hikes in the United States, the world’s biggest oil user, will slow economic growth and limit fuel demand.


Gold price is gathering strength to take on the eight-month top at $1,880, as the uptrend remains well in place this Tuesday. The renewed uptick in the United States Dollar (USD) and the US Treasury bond yields is keeping the immediate upside in check.  

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