Market Update - 02 February 2023

GBP/USD surrenders its modest intraday gains, though the downside remains cushioned. Expectations that the Fed will cut rates later this year weigh on the USD and lend support. Traders also seem reluctant to place aggressive bets ahead of the key BoE policy decision. (FXStreet)

EUR/USD advances to fresh highs north of the 1.10000 mark. The pair keeps the bid tone after the FOMC rate hike on Wednesday. The ECB is largely anticipated to hike rates by 50 bps later in the session. (FXStreet)

USD/CAD drops to its lowest level since November amid the prevalent USD selling bias. Expectations that the Fed will cut interest rates later this year weigh on the Greenback. The overnight slump in oil prices undermines the Loonie and might help limit the slide. (FXStreet)

EUR/GBP scales higher for the fourth straight day and touches a fresh multi-month top. Expectations for additional jumbo rate hikes by the ECB continue to underpin the Euro. Speculations that the BoE is nearing the end of the rate-hiking cycle weigh on the GBP. Traders now seem reluctant as the focus shifts to the BoE and the ECB policy decisions. (FXStreet)

The index drops to 10-month lows near 100.80. The dollar remains on the defensive post-FOMC event. Initial Claims, Factory Orders next of note in the docket. The greenback, in terms of the USD Index (DXY), adds to the weekly leg lower and breaks below the 101.00 support to print new 10-month lows on Thursday. (FXStreet)

USD/JPY prints three-day losing streak despite recent bounce off weekly low. BoJ’s Wakatabe appears determined to tame inflation, praises YCC move. US 10-year Treasury bond yields dribble around two-week low. Second-tier US data, other central bank announcements can please Yen bears before Friday’s US NFP (FXStreet)

GBP/JPY seesaws around a fortnight low during three-day downtrend. US 10-year Treasury bond yields dropped the most in two weeks on dovish Fed. Hawkish concerns from BoJ, downbeat UK data and workers’ strikes weigh on prices. BoE is expected to announce 0.50% rate hike but hints for policy pivot will be crucial to watch. (FXStreet)

AUD/USD clings to mild gains at multi-day top, sidelined of late. Australia Building Permits came in firmer during December. Market sentiment dwindles as traders lick Fed-induced wounds ahead of ECB, BoE. US Factory Orders, hints for Friday’s NFP could entertain Aussie pair traders. (FXStreet)

USD/INR has shown a rebound move as the USD Index has gauged an intermediate cushion around 100.50. Fresh signals of a decline in inflation projections indicate that the Fed might pause the rate hike cycle. The Indian government has trimmed its fiscal deficit target to 5.9% of GDP below the prior target of 6.4%. (FXStreet)

USD/CNH pares intraday losses around 13-day low, picking up bids of late. Ascending trend line from June 2022 appears a tough nut to crack for bears amid oversold RSI. 10-DMA guards recovery moves, three-week-old resistance line challenge bulls. (FXStreet)

WTI fades bounce off intraday low as sellers poke ascending support line from early December 2022. Downbeat MACD signals favor sellers but RSI conditions suggest limited room towards the south. Multiple EMAs, weekly resistance line highlight $79.30 as the key upside hurdle. (FXStreet)

Gold price is facing barricades in extending range towards the north as USD Index is attempting a cushion around 100.50. Analysts at the National Bank of Canada anticipate a policy change by the FOMC in the first quarter of 2023. Going forward, the US NFP data will be of utmost importance. (FXStreet)

Silver scales higher for the third successive day and touches a fresh weekly high on Thursday. The formation of a rectangle on the daily chart warrants caution before placing directional bets. The technical setup, however, favours bulls and supports prospects for an eventual breakout.

Source: FXStreet, DailyFX

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