Market Update - 25 July 2023

USD/CHF edges lower on Tuesday and is pressured by a modest USD downtick. A positive risk tone could undermine the safe-haven CHF and help limit losses. Traders might also prefer to wait for the crucial FOMC decision on Wednesday. (FXStreet)

USD/CAD oscillates in a narrow trading band through the early European session on Tuesday. A modest pullback in Oil prices undermines the Loonie and lends some support to the major. A positive risk tone prompts selling around the safe-haven USD and caps the upside for the pair. Traders now look to US macro data for some impetus, though the focus remains on the FOMC. (FXStreet)

AUD/USD gains strong positive traction in the wake of hopes for more stimulus from China. A positive risk tone prompts selling around the USD and benefits the risk-sensitive Aussie. Traders look to US macro data for some impetus ahead of the Australian CPI on Wednesday. The focus remains on the outcome of the highly-anticipated FOMC monetary policy meeting. (FXStreet)

GBP/USD struggles to gain and remains on the defensive around the 1.2840 mark on Tuesday. S&P Global Composite PMI showed that US business activity slowed to a five-month low in July. The preliminary UK PMI data revealed that economic activity in July was weaker than expected. Market participants will keep an eye on the Federal Open Market Committee (FOMC) meeting. (FXStreet)

The index now faces some tepid selling pressure near 101.40. The Fed starts its 2-day meeting later on Tuesday. CB Consumer Confidence, housing data will be next on tap. The greenback, in terms of the USD Index (DXY), faces some selling pressure after hitting new multi-session peaks in the 101.40/45 band on turnaround Tuesday. (FXStreet)

USD/JPY consolidates in a tight range above 141.45 on Tuesday. Market anticipated that the Federal Reserve (Fed) would hike rates by 25 basis points (bps) to 5.25–5.50%. Japanese policymakers are expected to maintain a dovish policy stance. Market participants will keep an eye on the FOMC meeting and BoJ meeting later this week. (FXStreet)

EUR/USD struggles to defend the first daily gains in five at the lowest level in two weeks. China-inspired risk-on mood, mixed concerns about Fed prod US Dollar bulls at multi-day high. Euro bulls appear defensive as disappointing PMIs from Eurozone, Germany flag recession fears and push back ECB hawks. German IFO sentiment data, US CB Consumer Confidence can entertain EUR/USD traders but ECB vs. Fed drama is the key. (FXStreet)

EUR/GBP drifts lower for the second straight day and drops to a nearly one-week low. Euro Zone’s economic woes undermine the Euro and continue to weigh on the cross. Bets for less aggressive BoE rate hikes could limit losses ahead of the ECB on Thursday. (FXStreet)

GBP/JPY clings to mild gains, reverses week-start retreat from the highest level in two weeks. China stimulus expectations join concerns about major central banks’ proximity to policy pivot to fuel market optimism. Benchmark US 10-year Treasury bond yields renew two-week high but two-year counterpart retreats. Risk catalysts will direct intraday moves but BoJ announcements are key for clear view. (FXStreet)

USD/MXN struggles to find a decisive move as investors shift focus toward Fed’s policy. The trigger that could turn investors anxious is the interest rate guidance from Jerome Powell. Semi-annual inflationary pressures in Mexico increased at a higher momentum in July. (FXStreet)

NZD/USD defends the previous day’s corrective bounce off 12-day-low amid China-inspired risk-on mood. Sustained break of 200-EMA, upbeat RSI keeps Kiwi buyers hopeful. One-week-old descending trend line guards immediate upside ahead of 100-EMA, 50% Fibonacci retracement’s convergence. Multiple supports, pre-Fed positioning will challenge Kiwi pair sellers. (FXStreet)

Prices of WTI rose to fresh highs past the $79.00 yardstick at the beginning of the week. The positive price action was accompanied by rising open interest and volume and exposes the probable continuation of the upside momentum in the very near term. Against that, the immediate hurdle still emerges at the key $80.00 mark per barrel. (FXStreet)

Monday’s second daily pullback in prices of natural gas was on the back of diminishing open interest and volume, hinting at the probability that a near-term rebound could be in the offing. Against that, the next target for the commodity is expected at the June tops near the $2.90 mark per MMBtu (June 28). (FXStreet)

Gold price trades sideways as investors await Fed policy announcement for further guidance. Fears of a recession in the US economy trim amid a tight labor market and softening inflation. The US Dollar Index’s upside looks restricted as investors have digested July’s interest-rate hike. (FXStreet)

Silver price gains traction and holds above $24.55 on Tuesday. XAG/USD holds below the 50- and 100-hour EMAs with a downward slope. Immediate resistance is seen at the $24.60-$24.65 zone; $24.30 acts as an initial support level. (FXStreet)

Source: FXStreet, DailyFX

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