Market Update - 12 December 2022

EUR/USD is catching a fresh bid, as the US Dollar drops with Treasury yields. Risk sentiment remains tepid amid China’s covid woes, ahead of critical events. EUR/USD targets a rising channel upper boundary at 1.0635 on a sustained move above 1.0600.

GBP/USD bounces off intraday bottom on mostly upbeat British data.UK data came in mostly firmer-than-expected and challenges the previous fears surrounding the British economy. US Dollar cheers risk-off mood ahead of the key US inflation, Fed meeting. Light calendar elsewhere restricts the pair’s immediate moves even as bears struggle to retake control.

USD/JPY is aiming to shift its auction profile above 137.00 as the risk-off mood is strengthening further. Mixed views on the Federal Reserve policy outlook have escalated anxiety among the market participants. The Bank of Japan is aggressively working to achieve a 2% inflation rate. USD/JPY is expected to accelerate gains amid technical tailwinds.

USD/CAD retreats from intraday high, struggles to defend buyers. WTI bounces off yearly low, snaps six-day downtrend, amid fears of supply crunch. Sour sentiment, anxiety ahead of the key data/events underpin US Dollar. Speech from BOC Governor Maclem can entertain traders ahead of bumper catalysts.

US Dollar Index stays firmer after snapping two-week downtrend. Upbeat US data keeps Fed hawks on the table even as 50 bps rate hike is already given. Slew of economic data could trigger more volatility and favor DXY bulls ahead of the key data/events. Monday’s light calendar may portray a softer start to the key week.

AUD/USD remains depressed around intraday low during the first loss-making day in four. Bearish MACD signals, failure to cross weekly resistance line keep sellers hopeful. Buyers need validation from monthly high to retake control.

USD/CHF buyers struggle inside a bullish chart formation. Upbeat MACD signals suggest further advances, 200-HMA acts as an additional upside filter. Bears have a bumpy road to travel unless breaking 0.9300 support.

The Kiwi Dollar has rebounded despite pre-Fed policy anxiety.A bull cross, represented by the 20-and 200-period EMAs at 0.6214, indicates more upside ahead. The RSI (14) is oscillating in the bullish range, which indicates that the upside momentum is active. The NZD/USD pair is an inch far from the round-level resistance of 0.6400, at the time of writing, after resurfacing from around 0.6380 in the early Asian session.

USD/INR prints three-day losing streak as it takes the bids to refresh intraday high. Precursors for US inflation suggest hawkish rate hike announcements from the Federal Reserve. India inflation, Industrial/Manufacturing Production keeps traders on the edge, recovery in oil prices also fuels USD/INR prices.

WTI printed fresh bear cycle lows on Friday. Focus is on TC Energy and the price of Russian crude trading below the $60/bbl cap. West Texas Intermediate is higher by some 0.57% on the day having travelled between a low of $71.47 and a high of $72.30. However, a fresh 2022 low was put into place on Friday due to supply concerns following a major spill from TC Energy's Keystone Pipeline in Nebraska.

Gold price stays pressured around intraday low as it snaps four-day uptrend. Cautious mood ahead of the key data/events favor US Dollar buyers amid an easy start to the key week. XAU/USD bears need validation from the US CPI, Fed hawks.

Silver price renews intraday low during the first loss-making day in four. Rising wedge, nearly overbought RSI adds strength to bearish bias. Convergence of previous resistance line, 21-DMA appears a tough nut to crack for XAG/USD bears.

Source: FXStreet, DailyFX

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