Market Update - 18 May 2023

EUR/USD adds to the weekly decline near 1.0800. ECB’s De Guindos leaves the door open to extra rate hikes. President C. Lagarde speaks later in the session. Further selling pressure continues to hurt the European currency and forces EUR/USD to recede further and trade at shouting distance from the key barrier at 1.0800 the figure on Thursday. (FXStreet)

USD/JPY retreats from over a two-week high touched on Thursday amid some profit-taking. The downside remains cushioned amid the prevalent bullish sentiment surrounding the USD. The Fed-BoJ policy divergence favours bullish traders and supports prospects for further gains. (FXStreet)

GBP/USD is showing a lacklustre performance below 1.2500 amid the absence of a critical trigger. Market sentiment is positive as fears of catastrophic US default have trimmed sharply. UK Hunt’s promise of bringing down higher taxes to reduce pressure of higher inflation households could induce retail demand. (FXStreet)

AUD/USD has witnessed selling pressure after a recovery move to near 0.6650 as the USD Index has rebounded. The catastrophic impact of the US Treasury default could dampen the leadership position and the credibility of the United States economy. Cooling down Australian tight labor market conditions are expected to force the Reserve Bank of Australia (RBA) to return to an unchanged policy stance. AUD/USD’s upside is capped from April 03 high around 0.6793 while the downside is restricted from March 07 low around 0.6580. (FXStreet)

The index extends the weekly recovery around the 103.00 zone. The still unsolved debt ceiling remains in centre stage. Weekly Claims, Philly Fed index, Fedspeak next on tap. The USD Index (DXY), which tracks the greenback vs. a basket of its main competitors, keeps the buying interest well and sound near the 103.00 region on Thursday. (FXStreet)

USD/CAD regains positive traction on Thursday and draws support from sustained USD buying. A modest downtick in Oil prices undermines the Loonie and contributes to the intraday uptick. The fundamental backdrop favours bullish traders and supports prospects for additional gains. (FXStreet)

USD/CHF struggles to gain any meaningful traction and remains below the 0.9000 mark. The downside remains cushioned amid the underlying bullish sentiment around the USD. Worries about a global economic slowdown benefit the safe-haven CHF and cap the upside. (FXStreet)

AUD/NZD flirts with weekly low as bears prod five-month-old ascending trend line. Australia Employment Change slumps, Unemployment Rate rise in April while NZ budget appears optimistic. Downbeat oscillators, failure to cross key DMAs favor AUD/NZD sellers. Six-week-old ascending support line, New Zealand budget may prod the bears. (FXStreet)

NZD/USD remains on the front foot around intraday high inside weekly rising wedge. Gradually improving RSI conditions suggest further grinding of Kiwi pair towards the north. 200-HMA, fortnight-old horizontal hurdle challenge NZD/USD bulls. Clear break of 0.6240 can recall sellers targeting monthly low. (FXStreet)

AUD/JPY remains pressured around intraday low after easing from eight-day top. Australia employment report, Japan trade numbers for April prod the cross-currency pair buyers. Qualitative catalysts will be the key for direction due to pair’s risk-barometer status, light calendar. (FXStreet)

USD/INR has faced stiff barricades above 82.50 as market sentiment has improved. The Indian Rupee is expected to remain under pressure as oil prices have recovered sharply. USD/INR is marching towards the downward-sloping trendline of the Symmetrical Triangle pattern plotted from 83.43. (FXStreet)

USD/MXN has shifted its auction comfortable above 17.60 amid a recovery in the USD Index. A failure in the raise of US debt-ceiling could provide catastrophic effects on the US economy. Banxico is expected to keep the interest rate policy unchanged. (FXStreet)

WTI crude oil consolidates the biggest daily gains in two weeks around $72.50. Nearly overbought RSI, failure to remain firmer past $73.30 lures Oil bears. 100-SMA, resistance-turned-support and bullish MACD signals challenge WTI bears. 200-SMA appears the key upside hurdle, Oil bears need validation from $64.30. (FXStreet)

Prices of the natural gas charted an inconclusive session on Wednesday. The daily price action was on the back of a small uptick in open interest and declining volume, exposing further consolidation for the time being. In the meantime, bouts of weakness appear so far contained by the $2.00 region per MMBtu. (FXStreet)

Gold price prints corrective bounce from three-week low to snap two-day losing streak. Retreat in yields, market’s cautious mood allows XAU/USD to lick its wounds. US Dollar’s struggle with 100-DMA amid Target Corp-linked markets fears prod Gold sellers. Convergence of 50-HMA, previous support line limited immediate upside with eyes on US debt limit, Fed news. (FXStreet)

Silver price fades bounce off seven-week low, sidelined of late. Doji candlestick around 100-EMA support, nearly oversold RSI (14) line lure XAG/USD buyers. 50-EMA, bearish MACD signals cap Silver price recovery. (FXStreet)

Source: FXStreet

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