Market Update - 18 January 2023

EUR/USD resumes the uptrend and retakes 1.0800 and beyond. Final inflation figures in the euro area take centre stage on Wednesday. Retail Sales, Producer Prices take centre stage across the pond. The European currency regains part of its shine and encourages EUR/USD. (FXStreet)

GBP/USD ticks up to renew five-week high after UK inflation numbers. UK CPI, RPI came in softer for December. UK Chancellor Jeremy Hunt hints at no tax cuts in the next budget. Downbeat yields underpinned US Dollar rebound ahead of US Retail Sales, PPI. (FXStreet)

The index accelerates gains and flirts with the 103.00 area. US yields remain on the defensive on Wednesday. Retail Sales, Producer Prices, Fedspeak next of note in the docket. The USD Index (DXY), which tracks the greenback vs. a basket of its main rivals, climbs to multi-day highs near the 103.00 mark on Wednesday. (FXStreet)

EUR/GBP is at a make or a break level around 0.8772 ahead of the UK Inflation release. Considering the UK’s stubborn inflation, the Bank of England might hike interest rates further by 50 bps. European Central Bank might decelerate the pace of hiking interest rates led by declining energy prices. EUR/GBP is expected to continue its downside momentum to near 0.8750 after breaking the 0.8772 support. (FXStreet)

USD/CAD turns lower for the second straight day, albeit lacks follow-through selling. Bullish crude oil prices underpin the Loonie and act as a headwind for the major. Broad-based USD strength lends some support ahead of important US macro data. (FXStreet)

USD/JPY is struggling to extend its storm further above the prior auction area in a 131.38-132.93 range. The asset has conquered the 200-EMA swiftly post unchanged monetary policy by the BoJ. The US Dollar Index (DXY) has surpassed 102.40 after delivering a breakout above 102.20 resistance. (FXStreet)

NZD/USD regains strong positive traction and jumps to over a one-month high on Wednesday. The optimism over a Chinese economic recovery provides a strong lift to the risk-sensitive Kiwi. Bulls seem rather unaffected by a stronger USD and might now aim to reclaim the 0.6500 mark. (FXStreet)

USD/CHF prints the biggest daily gain in a week despite retreating from intraday high. Convergence of one-week-old descending trend line, 50-HMA restricts immediate upside. MACD, RSI also suggest a reduction in bullish momentum. (FXStreet)

USD/INR picks up bids to reverse the previous day’s pullback from one-week high. Bank of Japan’s inaction drowned Treasury bond yields, underpinned US Dollar demand. Increased hedging by Indian importers, foreign outflows weigh on the INR. US Retail Sales, PPI will be crucial to forecast further USD run-up. (FXStreet)

AUD/USD struggles to preserve its modest intraday gains amid broad-based USD strength. Bets for smaller Fed rate hikes and declining US bond yields might cap gains for the buck. Odds for an additional rate hike by the RBA should help limit the downside for the major. Traders now look forward to important US macro releases for some meaningful impetus. (FXStreet)

Tuesday’s decent uptick in prices of the barrel of the WTI was in tandem with rising open interest and volume, exposing the continuation of the ongoing rebound in the very near term. Against that, the next hurdle of note is now expected at the December 2022 high at $83.32 (December 1). (FXStreet)

The multi-week downtrend in prices of the natural gas remains unchanged so far. Tuesday’s small advance was on the back of shrinking open interest and curtails the likelihood of occasional bullish attempts. On this, a breach of the key $3.00 per MMBtu should expose a deeper retracement in prices of the commodity in the near term. (FXStreet)

Gold price takes offers to refresh intraday low during three-day downtrend. US Dollar contrasts yields as BoJ inaction pleases bond buyers. Mixed US data, Fedspeak previously probed DXY bulls. US Retail Sales, PPI will be important for fresh impulse. Gold price (XAU/USD) stands on slippery grounds while refreshing the weekly bottom around $1,897 during early Wednesday morning in Europe. (FXStreet)

Silver attempts a modest recovery from the weekly low touched earlier this Wednesday. Mixed oscillators setup warrants some caution before placing aggressive directional bets. A convincing break below channel support is needed to support prospects further losses. (FXStreet)

Source: FXStreet, DailyFX

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