Market Update - 19 April 2023

USD/CAD picks up bids to pare recent losses, defends the previous week’s rebound from two-month low. Canada inflation softens in March, BoC Governor Tiff Macklem fails to convince markets of hawkish bias. Oil price fails to cheer softer US Dollar, upbeat China data and API inventory draw. Second-tier Canada, US data and Fed’s Beige Book will be in focus for intraday directions, risk catalysts are the key.

The index picks up some pace and trades close to 102.00. US yields remain firm in multi-week levels so far on Wednesday. Weekly Mortgage Applications next on tap in the docket. The USD Index (DXY), which tracks the greenback vs. a bundle of its main competitors, manages to reverse Tuesday’s weakness and advances to the proximity of the 102.00 region on Wednesday.

NZD/USD is gently marching towards 0.6220 amid a subdued performance in the USD Index. S&P500 futures have extended their losses as investors are worried about further performance from equities. NZ inflation is expected to get stubborn further despite higher rates by the RBNZ.

USD/JPY seeks fresh direction after reversing from the highest levels in five weeks. Downbeat US data surpsede hawkish Fed talks and weigh on US Dollar, Treasury bond yields. Japan’s Reuters Tankan survey flashes unimpressive figures while BoJ officials defend easy-money policy. Risk catalysts eyed for clear directions, yields, central bank talks are the key for fresh impulse.

AUD/USD has shown a recovery move amid a soft performance by the USD Index. The RBA minutes showed that policymakers were actively discussing a rate hike but concluded the meeting with steady interest rates. AUD/USD is auctioning in an Inverted Flag that displays a long consolidation and is followed by a breakdown.

EUR/GBP has printed a fresh day's high at 0.8836 amid hawkish ECB bets. Eurozone’s inflation is extremely persistent amid labor shortage so favors a big rate hike ahead. March’s UK inflation data holds significant importance as it will be the last before BoE’s May policy meeting.

NZD/USD takes offers to refresh intraday high while reversing below 50-DMA. Steady RSI, 200-DMA can challenge short-term Kiwi bears. Buyers need validation from previous support line from early March.

USD/CHF is making efforts for recovery after defending the critical support of 0.8960. S&P500 futures have shown nominal losses in Asia amid anxiety over earnings data. Fed Bostic favored one more rate hike and then holding them above 5% for some time.

EUR/USD reverses from intraday high, fades the previous day’s bounce off one-week low. Fed, ECB policymakers remain hawkish but divergence between US and European data, yields weigh on greenback. Geopolitical fears, cautious mood ahead of US debt ceiling plan prod Euro pair buyers. Final readings of Eurozone inflation, Fed Beige Book eyed for fresh impulse.

GBP/USD takes the bids to refresh intraday high as UK inflation rises in March. UK CPI came in 10.1% YoY in March versus 9.8% expected and 10.4% prior. EU’s Brexit incentive, hawkish Fed/BoE rhetoric join geopolitical fears to prod CAble bears. US PMI, UK Retail Sales and Fed Beige Book are the key catalysts to watch for clear directions.

GBP/JPY has climbed above 167.35 as UK headline inflation remained above a double-digit figure vs. consensus of 9.8%. The collaborative impact of surprise upside in the UK labor cost index and accelerated inflation would force BoE to raise rates further. BoJ Ueda has supported buying government debt as part of monetary policy

USD/MXN braces for the first daily loss in four. U-turn from key SMAs, steady RSI (14) keeps Mexican Peso buyers hopeful. Clear downside break of fortnight-old support becomes necessary for pair bears to aim for 2017 low.

USD/CNH treads water around 6.8800 for the second consecutive day amid mixed catalysts. PBOC is likely to defend current monetary policy even if easy measures are preferable in China. Hawkish Fed bets, upbeat China data and geopolitical tension surrounding Taiwan, Russia also prod offshore Chinese Yuan traders.

USD/INR has printed a fresh weekly high at 82.11 amid a recovery in the USD Index. The Fed is not expected to pause rate hikes sooner despite a deceleration in inflation and easing labor market conditions. The Indian Rupee is failing to show resilience despite the buying spree from FIIs.

WTI crude oil remains sidelined after posting a price-reversal suggesting candlestick the previous day. U-turn from 10-day EMA, firmer RSI (14) also keeps WTI buyers hopeful. 200-day EMA, easing bullish bias of MACD prods upside expectations. Double tops around $83.30-40 appear a tough nut to crack for Oil bulls to retake control.

Natural Gas price retreat from the highest levels in one month to print the first daily loss in three. US Dollar recovery, talks of enough gas supplies in UK and warmer weather in the West also prod XNG/USD bulls. Geopolitical fears, hawkish Fed bets underpin USD rebound amid sluggish session.

Gold price grinds higher after snapping two-day losing streak the previous day. Softer United States data contrasts with upbeat China statistics to underpin XAU/USD rebound. US Treasury bond yields, US Dollar bear the burden of downbeat data, anxiety ahead of United States debt ceiling plan. Gold buyers need support of risk-on mood to refresh YTD high.

Source: FXStreet, DailyFX

Disclaimer: This information does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties on the Internet.