Market Update - 31 January 2023

USD/JPY bulls eye a 50% mean reversion towards 130.30 that meets the prior support. The outlook is bearish for the day ahead with a test of 130.00 eyed ahead of the Federal Reserve on Wednesday. (FXStreet)

The Cable has found a cushion as the USD Index has extended its correction. Pound Sterling bulls have found support from the 200-EMA around 1.2350. A breakdown of the RSI (14) into the 20.00-40.00 range will trigger the bearish momentum. The GBP/USD pair has sensed a buying interest after dropping below 1.2340 in the Asian session. (FXStreet)

USD/CAD retreats from intraday high, consolidates the biggest daily gains in a fortnight. Covid-linked headlines put a floor under the Oil price after it dropped amid risk-aversion, fears of more supplies. Market sentiment remains divided ahead of the key data/events. Canada GDP for November, US CB Consumer Confidence can entertain traders ahead of FOMC. (FXStreet)

EUR/GBP reverses the previous day’s corrective bounce off one-week low. Euro struggles to defend hawks after downbeat German data challenge hawkish ECB bias. IMF’s warning over the UK’s economic conditions challenge EUR/GBP bears. Preliminary readings of Eurozone Q4 GDP will be crucial for immediate directions, ECB vs. BoE battle eyed. (FXStreet)

The index moves further north of the 102.00 barrier. The Fed starts its 2-day meeting later on Tuesday. CB Consumer Confidence, housing data next of note in the docket. The greenback extends the rebound and now looks to consolidate the recent breakout of the key 102.00 hurdle when gauged by the USD Index (DXY). (FXStreet)

EUR/USD takes offers to refresh intraday low as bears tighten the grip. A clear break of three-week-old ascending trend line, sustained trading below 200-HMA favor sellers. Bearish MACD signals add strength to the downside bias. Buyers need to cross the 1.0930 hurdle to retake control. (FXStreet)

USD/INR is aiming to shift its business above confidently 81.60 amid the souring market mood. The Fed is expected to further decelerate the pace of policy tightening further. Indian Rupee might display sheer volatility on Budget Day ahead. (FXStreet)

AUD/USD drops to a one-week low on Tuesday and is pressured by a combination of factors. Disappointing Australian Retail Sales figures weigh on the Aussie amid a modest USD strength. Bets for smaller Fed rate hikes keep a lid on the buck and might help limit losses for the major. (FXStreet)

USD/CNH is showing wild ticks on better-than-projected China’s official PMI data. Official Manufacturing PMI has soared to 50.1 while the Non-Manufacturing PMI has climbed to 54.4. The risk-perceived assets are failing to find a cushion amid Fed policy inspired-volatility. (FXStreet)

NZD/USD has refreshed its weekly low around 0.6440 amid negative market sentiment. The Kiwi asset has delivered a breakdown of the consolidation and a Rising Wedge pattern. A slippage of the RSI (14) into the 20.00-40.00 range has weakened the New Zealand Dollar. (FXStreet)

Prices of the WTI added to the previous decline on Monday against the backdrop of increasing open interest. That said, the continuation of the downtrend appears on the cards and targets the so far 2023 low at $72.50 per barrel (January 5). (FXStreet)

Gold price fades corrective bounce from intraday low during four-day downtrend. Risk profile appears unclear even as Covid news, China data join IMF’s hopes of economic revival. Cautious mood ahead of FOMC, sluggish yields and IMF’s fears of inflation seem to weigh on XAU/USD price. (FXStreet)

Silver meets with a fresh supply on Tuesday and seems vulnerable to sliding further. Last week’s breakdown below the $23.80-$23.75 confluence favours bearish traders. A sustained move back above the $24.00 mark is needed to negate the negative bias. (FXStreet)

Source: FXStreet, DailyFX

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