Market Update - 07 February 2023

USD/JPY has slipped below 132.50 as risk-on mood attempts recovery amid easing US-China tensions. Anticipation for further continuation of interest rate hikes by the Fed after mammoth labor additions has soared. BoJ’s aggressive market operations have drastically limited the scope for speculation in bond futures. (FXStreet)

GBP/USD picks up bids to refresh intraday high, snaps three-day downtrend to recover from one-month low. Nearly oversold RSI triggers corrective bounce but bears stay hopeful. Clear downside break of previous key support lines, bearish MACD signals favor sellers. Cable buyers remain confused unless crossing 1.2450 hurdle. (FXStreet)

EUR/USD consolidates recent losses around one-month low, probes three-day downtrend. ECB hawks forget last week’s failed attempt to please bulls; upbeat EU data also favors Euro buyers. Receding concerns about US recession, hawkish Fedspeak exerts downside pressure on the pair. Fed Chair Powell, ECB’s Schnabel could entertain traders; Sino-American news is important too. (FXStreet)

The index faces some selling pressure near recent tops. US yields also give away part of the recent marked rebound. Chief Powell will take centre stage later in the NA session. The greenback, when measured by the USD Index (DXY), comes under some downside pressure and recedes from tops near 103.80 (February 6) on turnaround Tuesday. (FXStreet)

USD/CAD has picked strength after dropping to near 1.3400 as the risk-off impulse has rebounded. Federal Reserve’s Powell might sound hawkish in his commentary amid a fresh rise in the US NFP data. Bank of Canada’s Macklem to dictate rationale behind pausing policy tightening spell. USD/CAD has faced barricades while attempting to deliver a Filling Channel breakout. (FXStreet)

A meanwhile correction in NZD/USD is playing out. However, a break of structure can be noted as a bearish bias for the days ahead. NZD/USD was significantly lower after Friday’s outsized US Nonfarm Payrolls print, but the bulls are moving in as the following technical analysis illustrates. (FXStreet)

GBP/JPY bulls struggle to keep the reins after two-day uptrend. 10-DMA, 21-DMA and two-month-old resistance line challenge immediate upside amid sluggish MACD. Bears should wait for 61.8% Fibonacci retracement breakdown. (FXStreet)

AUD/USD has soared to near 0.6950 as RBA has announced a 25 bps interest rate hike to 3.35%. RBA’s Lowe has announced a fourth consecutive OCR hike by 25 bps to tame the historic inflation. Easing US-China tensions have supported the risk appetite of investors. (FXStreet)

AUD/JPY adds to intraday gains even as RBA hiked rates by 0.25%. RBA matches market forecasts but fails to please hawks by expecting softer inflation. BoJ’s Kuroda struggles to push back hawkish bias, MoF Japan confirms market intervention. Sluggish sentiment also acts as an upside filter. (FXStreet)

CME Group’s flash data for crude oil futures markets noted traders added around 28.3K contracts to their open interest positions on Monday, extending further the ongoing uptrend. Volume, instead, kept the erratic activity and dropped by around 115.1K contracts following the previous daily build. (FXStreet)

Considering advanced prints from CME Group for natural gas futures markets, open interest rose by around 15.6K contracts at the beginning of the week. On the other hand, volume extended the decline for the third straight session, this time by around 24.8K contracts. (FXStreet)

Gold price clings to mild gains while extending the week-start rebound from one-month low. US Dollar bears the burden of market’s cautious optimism to propel XAU/USD rebound. Fed Chair Powell needs to praise recently strong US data to challenge Gold buyers. US President Biden’s SOTU, Sino-American headlines also eyed for immediate directions. (FXStreet)

Silver attracts some buying on Tuesday and holds above the 38.2% Fibo. level support. The setup favours bearish traders and supports prospects for an eventual breakdown. A sustained strength beyond the 50-day SMA is needed to negate the bearish outlook. (FXStreet)

Source: FXStreet, DailyFX

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