Market Update - 16 January 2023

EUR/USD advances to fresh highs near 1.0880 earlier on Monday. The dollar gathers some traction after dropping to new lows. The Eurogroup meeting will be the salient event later in the session. (FXStreet) 

The index prints fresh lows in the sub-102.00 region. Sentiment continues to favour the risk complex on Monday. Markets’ focus remains on a probable Fed’s pivot. The greenback, in terms of the USD Index (DXY), loses further ground and trades in the area below the 102.00 support for the first time since early June. (FXStreet) 

GBP/USD continues scaling higher on Monday and hits a one-month high amid a weaker USD. Bets for smaller Fed rate hikes and a positive risk tone weigh on the safe-haven greenback. Recession fears keep a lid on any further gains ahead of the BoE Governor Bailey’s speech. (FXStreet) 

USD/JPY has sensed buying interest after dropping to near 127.20. The USD Index has recovered to near 101.60 despite the upbeat market mood. Downward-sloping 20-and 50-EMAs indicate more weakness ahead. (FXStreet) 

USD/CAD comes under renewed selling pressure on Monday amid sustained USD weakness. Rising bets for smaller Fed rate hikes and a positive risk tone continue to weigh on the buck. A modest pullback in oil prices could undermine the Loonie and help limit any further losses. (FXStreet) 

AUD/USD gains some follow-through traction on Monday and climbs to a fresh five-month high. Bets for smaller Fed rate hikes, a positive risk tone undermines the USD and offers some support. Looming recession fears cap the optimism and act as a headwind for the risk-sensitive Aussie. (FXStreet) 

A recovery in the US Dollar Index has also provided support to USD/INR. Growing expectations for a smaller Fed’s interest rate hike have weakened the USD Index broadly. Upbeat oil prices and FII outflows might trigger volatility for the Indian Rupee. (FXStreet) 

A bullish reversal seems likely on an Inverted H&S formation on the daily chart. The 20-and 50-EMAs have resumed their upside journey which adds to the upside filters. A shift into the bullish range of 60.00-80.00 by the RSI (14) will strengthen the New Zealand Dollar. (FXStreet) 

The recovery in prices of the WTI finally reached the key $80.00 mark per barrel on Friday. The uptick was in tandem with rising open interest and declining volume, which leaves the door open to extra gains, although a probable corrective move or some consolidation in the short term should not be ruled out. (FXStreet) 

Prices of the natural gas continued its march south at the end of last week amidst rising open interest and volume. Against that, the continuation of the downtrend looks the most likely scenario for the time being, with the immediate target at the key $3.00 mark per MMBtu. (FXStreet) 

Silver edges higher for the third straight day and inches back closer to the multi-month top. The set-up favours bulls and supports prospects for an extension of the appreciating move. A convincing break below the $23.00 mark is needed to negate the near-term positive bias. (FXStreet) 

Source: FXStreet, DailyFX

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