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21.07.2023 Market Report


EUR/USD is keeping its range near 1.1150, licking wounds during the first negative week in four. Market players struggle for clear directions ahead of next week’s monetary policy meetings of the European Central Bank and the Federal Reserve.


GBP/USD is trading near 1.2900, extending its rebound from weekly lows after the UK Retail Sales beat estimates with 0.7% MoM in June. A broad-based US Dollar weakness amid a cautious market mood is supporting the upside in the pair. 


The USD/JPY pair attracts some follow-through buying and advances above the 140.20 area heading into the European session on Friday. The monetary policy divergences between the ultra-loose monetary policy of the BoJ and the resumed tightening policy of the Fed dragged the Japanese Yen lower against its major rivals.


The AUD/USD pair extends the previous day’s sharp retracement slide from the vicinity of the 0.6850 area and continues losing ground through the Asian session on Friday. Spot prices, however, manage to recover a few pips from the daily low and currently trade with a slight negative bias, around the 0.6770-0.6775 region, down less than 0.10% for the day.


The NZD/USD pair currently trades around 0.6220 heading into the European session on Friday. The pair is under selling pressure for the sixth consecutive day amid the strength of the US Dollar. The possibility of a resumed hawkish stance from the Federal Reserve (Fed) following the Unemployment Claims report on Thursday boosts the US Dollar across the board and acts as a headwind for NZD/USD.


The USD/CAD pair struggles to capitalize on the previous day’s late rebound from the 1.3120-1.3115 region, or the weekly low and oscillates in a narrow band through the Asian session on Friday. Spot prices currently trade around the 1.3165-1.3170 area, nearly unchanged for the day. Crude Oil prices gain some positive traction for the second straight day, which underpins the commodity-linked Loonie and turns out to be a key factor acting as a headwind for the USD/CAD pair. Hopes that new stimulus measures from China will boost fuel demand in the world’s largest oil importer, along with the prospect of tighter global supplies, continue to act as a tailwind for the black liquid.


The USD/CHF pair consolidates its recent gains above the 0.8660 mark in the Asian session. The pair reversed from the 0.8560 mark on Thursday following the US Unemployment Claims data and the possibility of another Fed rate increase after the July meeting.


Oil prices rose on Friday after wild swings through the week as markets weighed tightening supplies and uncertainty over demand, with focus now shifting squarely towards a Federal Reserve meeting next week. 


Gold price seesaws around weekly top, braces for the third consecutive weekly gains. Overall mixed sentiment joins China’s efforts to nurture economic optimism to propel XAU/USD price. Risk catalysts will be the key to track amid a light calendar, cautious mood ahead of Fed monetary policy meeting.

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