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02.02.2023 Market Report


The EUR/USD pair is on the verge of delivering a sheer downside move as it is looking vulnerable below the critical support of 1.0660. The downside bias in the major currency pair is backed by soaring US Treasury yields.


GBP/USD bears attack the 1.2000 psychological magnet during a three-day downtrend amid fresh challenges for the Brexit deal and a rally in the US Treasury bond yields. However, the market’s lack of action heading into Thursday’s London open appears to restrict the Cable pair’s immediate downside.


The USD/JPY pair is struggling to extend its auction above 136.40 while the downside looks supported around 136.00 in the Asian session. The asset is expected to continue its upside journey and deliver a break above the 136.40 resistance as investors are eyeing more rates from the Federal Reserve (Fed)  to strengthen its defense in the battle against persistent inflation.


The AUD/USD pair has demonstrated a buying interest after dropping to near 0.6730 in the Asian session. The Aussie asset is expected to turn sideways as wild movements are generally followed by volatility contraction. Also, the capped upside in the US Dollar Index (DXY) is restricting range extension in the Aussie asset.


NZD/USD is down by some 0.27% and has fallen from a high of 0.6257 to a low of 0.6238, giving back some of the gains made midweek following the data that showed a revival in Chinese demand that bolstered commodity prices. This followed a poor result in the Australian data whereby 4 Gross Domestic Product growth slowed to 0.5% QoQ in Australia, versus 0.7% previously, and consensus expectations of a 0.8% lift.  The data raised the risk of an earlier pause in hikes from the Reserve Bank of Australia which initially weighed o both currencies. 


USD/CAD holds lower grounds near 1.3600 following its biggest daily slump in three weeks as the Loonie pair traders struggle to analyze mixed catalysts during Thursday’s sluggish Asian session. The quote’s heavy fall on Wednesday could be linked to the market’s upbeat sentiment, as well as welcome prints of Canada activity data. Adding strength to the downside bias was the firmer Oil price, Canada’s main export item.


USD/CHF licks its wounds around 0.9400, following a downbeat start of the March month, as the Swiss currency pair picks up bids during early Thursday. In doing so, the quote justifies grim statistics at home versus firmer details of the US data and the strong Treasury bond yields and hawkish Fed talks, which could recall the US Dollar bulls.


Oil prices kept to a tight range on Thursday as traders weighed the prospect of a strong recovery in Chinese demand against the possibility that rising interest rates and elevated inflation will crimp economic activity this year.


Gold price seesaws around the intraday low of $1,831 during the first loss-making day in four heading into the European session. In doing so, the precious metal justifies the firmer US Dollar and risk-off mood in the market amid a sluggish Thursday.

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