Market Update - 09 December 2022

EUR/USD moves back closer to a multi-month top, though lacks follow-through. A modest USD recovery is seen as a key factor acting as a headwind for the pair. Bets for less aggressive Fed rate hikes, a positive risk tone should cap the buck Traders also seem reluctant ahead of crucial central bank meetings next week.

USD/CAD bounces off 50 DMA support and recovers a part of the overnight losses. Bearish crude oil prices undermine the Loonie and offer some support to the major. A combination of factors weighs on the USD and might cap the upside for the pair.

USD/JPY drifts lower on Friday amid heavy follow-through selling around the USD. Bets for less aggressive Fed rate hikes, depressed US bond yields weigh on the buck. Traders, however, seem reluctant ahead of next week’s key US data/FOMC meeting.

GBP/USD has shifted its business profile comfortably above 1.2250 as the risk-on mood has strengthened. Federal Reserve is set to calm down the pace of the interest rate hike next week. A hawkish policy stance is expected from the Bank of England despite the recession in the United Kingdom. GBP/USD is likely to accelerate its upside journey as the RSI (14) is looking to conquer the bullish range.

GBP/JPY snaps two-day uptrend, struggles around 1.5-month-old resistance line, 200-SMA and weekly horizontal hurdle. Sluggish MACD signals, one-week-old support line restrict seller’s entry. Bulls need to cross 167.50 to aim for double tops around 169.00.

NZD/USD gains traction for the fourth straight day on Friday amid the prevalent USD selling bias. Bets for less aggressive Fed rate hikes keep the US bond yields depressed and weigh on the buck. A positive risk tone further undermines the safe-haven buck and benefits the risk-sensitive Kiwi.

USD/CHF holds lower ground in the weekly low, down for the fourth consecutive day. Mixed sentiment, downbeat US Treasury yields weigh on US Dollar. Early signals for next week’s US inflation, monetary policy meetings of Fed, SNB will be in focus.

AUD/USD is aiming to surpass 0.6800 as the market sentiment has become extremely bullish. China’s factory-gate price deflation has cemented a dovish commentary from the PBOC. A decline in the US PPI data is going to delight the Fed as expectations for a drop in inflation will get strengthened.

USD/INR takes offers to refresh intraday low as riskier assets cheer US dollar weakness. Recovery in Crude Oil fails to challenge Indian Rupee buyers amid cautious optimism at home and abroad. US consumer sentiment, inflation expectations should be watched for fresh impulse.

Silver price remains firmer inside the four-day-old bullish channel. 200-HMA, weekly horizontal support zone challenge bears from retaking control. RSI conditions suggest further pullback but channel formation tests sellers. Silver price (XAG/USD) pares intraday gains around the weekly top, also the highest level in seven months, as bulls take a breather during early Friday morning in Europe.

Source: FXStreet, DailyFX

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