Market Update - 19 May 2023

USD/CHF clings to mild losses as bulls take a breather at five-week high. Market’s anxiety ahead of key risk events underpins Swiss Franc demand. Fed’s Powell need to defend hawkish bias to favor US Dollar bulls. US President Biden has tough challenge of extending debt limit. (FXStreet) 

USD/CAD sticks to mild losses amid sluggish markets ahead of key events. US Dollar struggles to cheer hawkish Fed bets ahead of Powell’s speech. WTI crude oil braces for the first weekly gain in five around $72.50 amid market’s cautious optimism. US-China fears, concerns about US debt ceiling prod Loonie pair buyers even as Fed versus BoC divergence regains attention. (FXStreet) 

AUD/USD gains some positive traction amid a modest USD pullback from a two-month high. A positive risk tone prompts some USD profit-taking and benefits the risk-sensitive Aussie. Hawkish Fed expectations and the US debt ceiling optimism could help limit the USD losses. Investors look forward to Fed Chair Jerome Powell’s speech for some meaningful impetus. (FXStreet) 

GBP/USD looks vulnerable above the immediate support of 1.2390 as the USD index is eyeing more upside. Fed’s Powell is expected to deliver interest rate guidance for June’s monetary policy meeting. GBP/USD has delivered a breakdown of the Head and Shoulder chart pattern. (FXStreet) 

USD/JPY snaps six-day uptrend at the highest levels since November 2022, struggles to defend Yen buyers of late. Short-term support lines, previous resistance from March challenge pair sellers. Pair buyers may witness bumpy road unless crossing 140.00. (FXStreet) 

The index advances further and flirts with tops near 103.60. Optimism around a potential debt ceiling deal remains in place. Fedspeak, Chief Powell take centre stage across the pond on Friday. The greenback, when tracked by the USD Index (DXY), maintains the bid bias well and sound in the 103.60 region at the end of the week. (FXStreet) 

GBP/JPY has slipped sharply below 172.00 amid a surprise jump in Japan’s inflation. Higher-than-projected Japan’s inflation numbers won’t impact BoJ’s prolonged ultra-dovish policy stance. Investors are anticipating that the BoE would not bring down inflation to half by the end of the year. (FXStreet) 

EUR/USD bears attack two-month-old horizontal support amid the oversold RSI conditions. 13-day-old previous support line, bearish MACD signals challenge corrective bounce of Euro pair. Yearly lows will be in danger on 1.0730 break while recovery remains elusive below 1.0900. (FXStreet) 

USD/MXN has shown recovery from 17.70 amid strength in the USD Index. Fed Powell is expected to deliver interest rate guidance for June’s monetary policy meeting. Banxico decided to keep the interest rate policy steady after 15 consecutive interest rate hikes in the past two years. (FXStreet) 

USD/CNH marks yearly peak reversal while poking three-day uptrend. China President Xi endures friendship with Central Asian leaders, advocates for stable, wealthy region. US Dollar struggles to defend latest gains amid fresh challenges for debt ceiling deal, likely US-China tension. Cautious mood ahead of Fed Chair Powell’s speech also tease USD/CNH bears. (FXStreet) 

USD/INR clings to mild gains around the highest levels in two months, retreats of late. Broad US Dollar strength weighs on Indian Rupee despite latest pullback in greenback. Upbeat Oil price, cautious mood also prods USD/INR bulls at multi-day peak. Fed Chair Powell’s speech, US President Biden’s announcements on debt ceiling extension eyed for clear directions. (FXStreet) 

NZD/USD has sensed selling interest above 0.6240 as the focus has shifted to Fed Powell’s speech. The overall market mood is still upbeat as chances for US Treasury default have trimmed dramatically. The RBNZ is expected to hike interest rates by a final quarter point to 5.50% next week. (FXStreet) 

Thursday’s negative price action in WTI was accompanied by rising open interest and declining volume. Against that, the commodity appears poised to keep the weekly consolidative mood in the very near term at least. So far, the $70.00 mark per barrel seems quite a decent contention area. (FXStreet) 

Natural Gas price retreats from the highest levels in five weeks, pares the biggest daily jump in seven months. Overbought RSI, 4.5-month-old horizontal area challenge XNG/USD bulls. 100-DMA, April’s top can restrict pullback moves, Natural Gas buyers remain hopeful beyond $2.50. (FXStreet) 

Gold prices retreated for the third session in a row on Thursday. The daily downtick came on the back of shrinking open interest, which is suggestive that a deeper decline appears out of favour for the time being. So far, the yellow metal appears to have met some initial contention around the $1950 region per ounce troy. (FXStreet) 

Silver stages a goodish rebound from over a one-and-half-month low touched on Thursday. The technical setup favours bears and warrants caution before positioning for further gains. A sustained strength beyond the $25.30-40 region is needed to negate the negative outlook. (FXStreet) 

Source: FXStreet

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.