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01.03.2023 Market Report


EUR/USD is trading close to 1.0600, holding the latest upside heading into Wednesday’s European session. The pair is benefiting from the hawkish ECB expectations and a mixed performance in the US Dollar. All eyes remain on German inflation and US PMIs. 


GBP/USD is extending the rebound to test 1.2050 in the early European morning. A recovery in risk sentiment on upbeat Chinese PMIs is helping the Pound Sterling following the Brexit deal optimism. The US Dollar remains sidelined ahead of the US ISM PMI data. Bailey’s speech eyed as well. 


The USD/JPY pair edges higher following the previous day’s two-way price swings and trades with a mild positive bias through the early European session. The pair is currently placed below mid-136.00s and remains well within the striking distance of its highest level since December 20 touched on Tuesday. A combination of factors undermines the Japanese Yen (JPY), which, in turn, acts as a tailwind for the USD/JPY pair amid the underlying bullish sentiment surrounding the US Dollar. Data released earlier this Wednesday showed that Japan’s manufacturing sector remained in contraction territory in February. This comes on the back of dovish comments from the incoming Bank of Japan (BoJ) Governor Kazuo Ueda and Deputy Governor nominee Shinichi Uchida, stressing the need to maintain the ultra-loose monetary policy. This, along with signs of stability in the equity markets weigh on the safe-haven JPY.


AUD/USD has stretched its V-shape recovery move above to near the 0.6760 resistance in the early European session. The Aussie asset witnessed a sell-off in the Asian session after the release of the downbeat Australian Gross Domestic Product (GDP) and a sheer decline in the monthly Consumer Price Index (CPI). The downside bias in the Australian Dollar faded after the release of the upbeat Caixin Manufacturing PMI data, which infused fresh blood into the Aussie and resulted in a V-shape recovery.


NZD/USD picks up bids to reverse the previous day’s pullback from an important mark surrounding 0.6200 during early Wednesday. In doing so, the Kiwi pair appears softer within the one-month-long falling wedge bullish chart formation.


The USD/CAD pair has sensed a halt in its upside momentum near 1.3660 in the Asian session. The upside momentum in the Loonie asset has cooled down a bit, however, the upside bias is still intact. The Loonie asset is expected to recapture the previous week’s high around 1.3665 as the US Dollar is getting strengthened further led by rising fears of further policy tightening by the Federal Reserve (Fed).


USD/CHF renews its intraday low around 0.9410 as bulls take a breather following the strong February performance during early Wednesday. In doing so, the Swiss currency pair fails to justify the market’s mildly offbeat tone amid fears of higher rates and inflation. The reason could be linked to China as recent activity data from the world’s largest industrial player came in impressive for February.


Oil prices rose on Wednesday as stronger-than-expected Chinese economic data drummed up hopes for a demand rebound in the country, helping markets look past signs of another large build in U.S. inventories.


Gold price prints three-day uptrend, confirms technical breakout supporting further advances. Hawkish Federal Reserve bias challenges XAU/USD upside before US S&P Global, ISM PMI figures for February.

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