Market Update - 16 May 2023

EUR/USD is struggling in extending its recovery above 1.0880 as the USD Index has made a recovery. The expectations for a neutral policy stance by the Federal Reserve have jumped further as US labor market conditions have started easing. The street is mixed over the interest rate guidance for the European Central Bank as the central bank seems far from the interest rate peak. EUR/USD is making efforts for shifting the auction above the 38.2% Fibonacci retracement at 1.0876. (FXStreet)

USD/JPY edges lower on Tuesday and snaps a three-day winning streak to over a one-week high. Looming recession risks benefit the safe-haven JPY and exert downward pressure on the major. The Fed-BoJ policy divergence to limit losses as traders look forward to the US Retail Sales data. (FXStreet)

GBP/USD takes offers to refresh intraday low, reverses week-start rebound from a fortnight low. UK Claimant Count Change rise for April, ILO Unemployment Rate also increase for three months to March. BoE’s Pill highlights inflation woes to defend hawkish monetary policy. US Retail Sales for April, policymakers’ efforts to avoid debt payment default will be the key to follow for fresh impulse. (FXStreet)

The index trades in an inconclusive fashion near 102.40. US yields show no clear direction so far on Tuesday. US Retail Sales, NAHB Index, Fedspeak next on tap. The greenback, in terms of the USD Index (DXY), navigates a tight range around the 102.40 zone on turnaround Tuesday. (FXStreet)

AUD/USD takes offers to renew intraday low, reverses the week-start rebound. Market sentiment worsens as US policymakers jostle about the debt ceiling issue. Softer China data, RBA’s policymakers’ hesitance to defend the latest hawkish surprise favor Aussie pair buyers. US Retail Sales, debt ceiling talks will be crucial for clear directions ahead of Australian Wage Price Index, employment numbers. (FXStreet)

USD/CAD licks its wounds after positing the biggest daily loss in a week. WTI crude oil struggles to cheer US SPR news, supply crunch fears amid downbeat EIA report. US Dollar remains pressured on softer data, mixed Fedspeak and fears of US default. BoC CPI, US Retail Sales will decorate calendar, US debt ceiling negotiations are the key for Loonie pair traders. (FXStreet)

USD/CHF retreats from intraday high, stays defensive after reversing from two-week top the previous day. Market sentiment turns sluggish as traders await US debt ceiling talks, Retail Sales data. Recently downbeat US data, mixed Fedspeak favor Swiss Franc buyers. (FXStreet)

EUR/GBP gains some positive traction on Tuesday, albeit struggles to capitalize on the strength. The immediate market reaction to softer UK jobs data fades rather quickly amid a weaker USD. The German ZEW survey, Eurozone GDP print fail to impress the Euro bulls or boost to the cross. (FXStreet)

NZD/USD gains traction for the second successive day, though the upside remains limited. Sliding US bond yields keeps the USD bulls on the defensive and lends support to the major. Looming recession risks, hawkish Fed expectations to limit the USD losses and cap the pair. (FXStreet)

USD/INR prints the first daily loss in four, retreats from 1.5-month high. Softer India inflation figures, Fed’s dovish hike allow RBI to defend current inaction. WTI crude oil retreat, downbeat US data and mixed Fedspeak allows Indian Rupee to regain upside momentum. US debt ceiling talks, Retail Sales in the spotlight for fresh impulse. (FXStreet)

Monday’s decent gains in prices of the WTI were amidst shrinking open interest and a small increase in volume and is indicative that the continuation of the rebound seems out of favour in the very near term. That said, the price action around the commodity could face some near-term consolidation around the $70.00 region for the time being. (FXStreet)

Prices of the natural gas rose for the second session in a row on Monday. The improvement in the price action came amidst diminishing open interest and volume and is indicative that extra gains lack conviction for the time being. So far, the commodity’s upside remains capped by the $2.50 region per MMBtu. (FXStreet)

Gold price takes offers to reverse the week-start corrective bounce, renews intraday low of late. XAU/USD drops as US Dollar picks up bids amid market’s anxiety ahead of US Retail Sales, debt ceiling talks. Downbeat China data, softer yields also weigh on the Gold price on a key day. (FXStreet)

Silver drops to a multi-week low, though finds some support near the 38.2% Fibo. level. The technical setup favours bearish traders and supports prospects for deeper losses. A sustained strength beyond the $24.20-30 area is needed to negate the negative bias. (FXStreet)

Source: FXStreet

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