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20.02.2023 Market Report


EUR/USD is attempting a recovery to test 1.0700  in the early European morning. The pair is looking to reclaim the 1.0700 level as the risk aversion theme has lost its traction, limiting the renewed upside in the US Dollar. Thin trading to continue amid a US holiday. 


GBP/USD is rebounding toward the 1.2050 region amid a risk recovery in early Europe. The divergent BoE-Fed policy outlook and looming geopolitical risks could act as a headwind to the pair. Meanwhile, the US Dollar consolidates its recovery amid light trading. 


USD/JPY refreshes intraday high near the mid-134.00s as it picks up bids to reverse the previous day’s pullback from a multi-day high during early Monday. In doing so, the Yen pair portrays the broad US Dollar strength amid mildly downbeat sentiment and the holidays in the US and Canada.


AUD/USD touched the round-level resistance of 0.6900 in the early European session. The Aussie asset has been strengthened as investors have shrugged-off uncertainty associated with US-China tensions and the launch of three projectiles from North Korea near Japan’s Exclusive Economic Zone (EEZ).


NZD/USD seesaws around 0.6240 as it struggles to push back the bearish bias after a four-day losing streak, keeping the bounce off a six-week low during early Monday morning in Europe. In doing so, the Kiwi pair portrays the traders’ cautious mood ahead of the key Reserve Bank of New Zealand (RBNZ) monetary policy meeting and the Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting.


The Loonie pair’s latest gains could be linked to the downbeat prices of Canada’s main export item, namely WTI Crude Oil, as well as the market’s risk-off mood that favors the US Dollar’s demand. It’s worth noting, however, that the holiday in the US and Canada restricts immediate moves of the quote amid a sluggish Asian session.


The USD/CHF pair has sensed a buying interest after a vertical correction below 0.9240 in the early Tokyo session. The Swiss Franc asset has picked demand as the market mood is getting nervous after a warning signal from the United States to China in case it decides to provide lethal support to Russia in its invasion of Ukraine.


Oil prices rose on Monday, recouping a measure of recent losses, although pressure from concerns over rising interest rates and deteriorating demand persisted ahead of more indicators from the Federal Reserve on the path of monetary policy. 


Gold price is trading around a flatline at the start of the week on Monday, consolidating Friday’s sharp rebound from seven-week lows of $1,819. Markets remain cautious amid the renewed geopolitical risks while awaiting the Minutes of the US Federal Reserve (Fed) February meeting due later this week.

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