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21.03.2023 Market Report


EUR/USD is juggling in a narrow range just above the 1.0700 level in early Europe. The pair is sidelined amid a relatively calmer risk tone and a pause in the US Dollar decline. Markets digest the latest global banking sector developments ahead of Germany’s ZEW survey. 


GBP/USD is on a corrective move lower while testing 1.2250 in the early European morning. A broad rebound in the US Dollar is weighing on the pair, despite a better market mood. Investors stay cautious amid the global banking woes and ahead of the Fed decision. 


USD/JPY hovers around the 131.00 mark during Tuesday’s Asian session, maintaining its bearish bias. Although US Treasury (UST) bond yields were boosted on Monday, USD/JPY failed to capitalize significantly. This can be attributed to the struggling global banking sector, as many commercial banks faltered last week. Consequently, investors rushed to purchase UST bonds, causing yields to decline.


The AUD/USD pair is displaying a back-and-forth action below the round-level resistance of 0.6700 in the early Asian session. The Aussie asset still looks vulnerable below 0.6700 and is expected to continue its downside as the release of the Reserve Bank of Australia (RBA) minutes have confirmed that RBA policymakers are not very hawkish as expected by the street.


NZD/USD is facing pressure as headlines report that hardline US Republicans oppose bank deposit guarantees beyond the $250,000 limit. Some Republicans have suggested that the Federal Reserve (Fed) should unwind its extraordinary funding facilities, arguing that a universal guarantee on all bank deposits sets a dangerous precedent, encouraging future irresponsible behavior.


USD/CAD picks up bids to refresh daily top around 1.3690, extending the early Asian session bounce off a one-week low heading into Tuesday’s European session. In doing so, the Loonie pair cheers the downbeat price of Canada’s main export earner, namely WTI crude oil, while also justifying the latest recovery of the US Dollar, ahead of the nation’s key inflation data for February.


USD/CHF picks up bids to refresh intraday high as it extends the previous day’s gains, the first in three, to 0.9300 during early Tuesday morning in Europe. The Swiss Franc (CHF) pair’s latest rebound could be linked to the US Dollar’s corrective bounce off the five-month low amid hawkish Fed bets. However, cautious optimism surrounding the latest banking industry updates, following a debacle in the US and Europe.


Oil prices fell in early Asian trade on Tuesday, cutting short a brief rebound from 15-month lows as markets hunkered down before a Federal Reserve interest rate decision this week, while concerns over a banking crisis continued to spur cautious trading.


Gold price reached a fresh yearly high on Monday this week, with XAU/USD hitting the $2,000 mark for only the third time in recorded history; the last time was during the COVID era. The robust bull run began from the March low of around $1,800, and gold prices have not looked back since.

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