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Gold Reaches Highest Level Since April Amid Risk AversionGold prices advanced sharply on Thursday as the yellow metal regained its appeal against a backdrop of risk aversion. Despite its safe-haven status and a slight increase in U.S. yields, the dollar fell upon gold’s strength. At the time of writing, the spot price XAU/USD is trading at the $1,930 area, recording a 1.35% daily gain following three consecutive daily declines. The metal has also printed a new nine-month high of $1,935 by the end of the New York session. Disappointing macroeconomic data and hawkish comments from major central banks have revived fears of a U.S. recession, which at the same time, triggered risk aversion amongst traders. Nevertheless, U.S. yields edged a tad higher on Thursday after the previous day’s decline, but Wall Street indexes traded in the red, with the Dow Jones Industrial Average posting its third fall in a row. From a technical perspective, the XAU/USD pair holds a positive short-term bias according to indicators on the daily chart. However, the Relative Strength Index (RSI) has already entered into overbought territory, which might signal a phase of consolidation, or a limited correction, before another run higher. On the upside, the next bullish target for the metal is seen at the 78.6% retracement of the $2,070 – $1,615 decline, standing at $1,973, followed by the $2,000 threshold, the last milestone ahead of the mentioned 2022 high at $2,070. On the flip side, pullbacks should find buyers at around the $1,900 level. Loss of this mark would expose the 20-day SMA at $1,860.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Fails To Sustain Gains After Data Fuels Recession FearsThe EUR/USD traded little changed by the end of the U.S. session on Wednesday after being rejected by a fresh nine-month high amid renewed recession fears. At the time of writing, the EUR/USD pair is trading at the 1.0790 area, just a few pips above its opening price, after hitting its highest price since April 2022 at 1.0887 earlier on the day. On Wednesday, data from the U.S. fueled concerns about an economic slowdown in the world’s biggest economy. Retail sales contracted by 1.1% during December, while industrial production declined by 0.7% in the same period, missing market expectations. Meanwhile, the Producer Price Index (PPI) rose at an annual pace of 6.2%, easing from 7.3% in November. In the Eurozone, the Harmonized Index of Consumer Prices (HICP) annual inflation rate was confirmed at 9.2% in December, slowing from 10.1% in November. Signs of a cooling economy triggered risk aversion and boosted the dollar versus most competitors during the New York session. Main Wall Street indexes were in the red while U.S. bond yields dropped. At the same time, the euro remains under pressure after reports the European Central Bank (ECB) might slow the pace of rate hikes after the February meeting. From a technical perspective, the EUR/USD pair holds the bullish tone on the daily charts, although the upward momentum is fading. Indicators have turned flat but hold above their midlines, while the price seems to have found decent support at the 1.0765 area. A loss of the mentioned support could risk a steeper pullback over the following sessions, targeting 1.0720 and the 20-day SMA at around 1.0685. On the flip side, a break above the 1.0890-1.0900 resistance zone could reignite the bullish momentum, paving the way towards 1.0935 en route to 1.1000.
by Alex_Boltyan_FXAnalyst
EUR/USD Slides Below 1.0800 As ECB Considers Slower HikesThe EUR/USD pair fell for a third day in a row on Tuesday, briefly dipping below the 1.0800 level, as the euro weakened amid rumors the European Central Bank (ECB) will slow down the pace of rate tightening. At the time of writing, the EUR/USD pair is trading at the 1.0800 zone, 0.18% below its opening price, as it continues to back away from a nine-month high of 1.0874. The euro took a hit after reports that the European Central Bank policymakers are considering a slower pace of interest rate hikes after a 50 basis points increase in February. Still, the dollar remains unable to gather enough momentum, limiting EUR/USD slide, amid expectations the Fed is also slowing the pace of rate hikes. The WIRP tool suggests a 25 bp move is already priced in by investors, with only 10% odds of a 50 bp increase seen at the February 1 meeting. On the data front, the German annual inflation rate for December was confirmed at 9.6%, measured by the Harmonized Index of Consumer Prices, while ZEW survey data offered an optimistic picture of economic sentiment amongst German and Eurozone citizens. On Wednesday, the U.S. will unveil Producer Price Index, retail sales and industrial production figures for December. From a technical standpoint, the EUR/USD maintains a bullish perspective according to indicators on the daily chart despite the price making lower lows. The RSI has turned south but remains well into positive ground, while the MACD is printing lower green bars reflecting the dwindling bullish momentum. If the EUR/USD loses the 1.0770 area, it could find next support levels at 1.0700 and then at the 20-day SMA around 1.0680. On the flip side, if the euro manages to break above the 1.0875 zone, it could pave the way toward the 1.0900 Fibonacci level en route to the 1.0935 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Eases From Multi-Month High, Approaches 1.0800 The EUR/USD pair retreated slightly on Monday and traded within a narrow range while the dollar gained some momentum in a quiet holiday session as U.S. traders celebrate Martin Luther King Jr. Day. At the time of writing, the EUR/USD pair is trading at the 1.0820 area, 0.13% below its opening price, having pulled back from a fresh nine-month high of 1.0874. Investors face a busy week ahead. On Wednesday, the U.S. will report the Price Producer Index, which is expected to rise by 6.8% over the year to December vs a 7.4% rate in November, while core PPI inflation annual rate is seen at 5.9% vs 6.2% in November. At the same time, retail sales are expected to bounce in December, printing a 0.1% advance following a 0.6% decline in November. Also Wednesday, the Fed’s Beige book will give the markets a perspective of the U.S. economy. On the European side, the highlight of the week will be the final estimations of the December Eurozone Harmonized Index of Consumer Prices (HICP) figures on Wednesday, with the headline inflation rate expected to be confirmed at 9.2% YoY and the core rate at 5.2%. The ZEW survey data from Germany, the EU, and German HIPC will be released on Tuesday. From a technical perspective, the EUR/USD holds a short-term bullish outlook according to the daily chart. Although the price has pulled back from recent highs, it holds above its main moving averages and important support zones. Indicators, in the meantime, have turned lower but remain in positive territory. The next support levels are seen at 1.0800, followed by the last sessions lows at the 1.0725 area, the 20-day SMA at 1.0665 and the 1.0600 psychological mark. On the other hand, immediate resistance is seen at the nine-month high of 1.0874, followed by the critical Fibonacci level at 1.0900.
by Alex_Boltyan_FXAnalyst
GBP/USD Ends the Week Near 1-Month High, Focus Turns to U.K. CPIThe GBP/USD advanced slightly on Friday but remained within a narrow range as the U.S. dollar managed to stabilize after Thursday’s heavy losses thanks to the negative shift in risk sentiment at the beginning of the day.  At the time of writing, the GBP/USD pair is trading at the 1.2230 area, 0.2% above its opening price, having struck a one-month high of 1.2249. The Cable is also headed to post a 1.17% weekly gain. Meanwhile, the dollar measured by the DXY index trades virtually unchanged on the day at the 102.20 zone but 1.65% lower in the week. The U.S. Consumer Sentiment Index by the University of Michigan showed an improvement in January, coming at 64.6 from its previous reading of 59.7 and above the 60.5 expected. The 5-year inflation expectations increased from 2.9% to 3% in January, but the year-ahead inflation expectations dropped to 4% from 4.4% in December. The numbers helped to improve sentiment but did not help the dollar. On the other hand, investors continue to digest Thursday’s Consumer Price Index (CPI) data from the U.S., which supports a less aggressive Fed. Both the headline and core annual inflation figures eased in December, coming in at 6.5% versus 7.1% in November and 5.7% versus 6.0% prior, respectively. After the release, the WIRP suggests a 25 bps hike on February 1 is fully priced in, with only 5% odds of a larger 50 bp move. Next week, the United Kingdom will release Consumer Price Index data, which will be closely scrutinized for fresh hints on the Bank of England policy outlook. The U.K. December annual inflation rate is expected to ease to 10.6% from 10.7% in November, while the core rate is seen increasing to 6.6% from 6.3% the previous month. From a technical perspective, the GBP/USD holds a short-term bullish bias according to indicators on the daily chart, while the price continues to post higher highs above its main moving averages. If the GBP/USD manages to break above the 1.2250 area, the following resistance levels could be found at the 1.2300 psychological level and the December monthly high at 1.2446. On the downside, support levels line up at the 1.2100 zone and the 20-day SMA at 1.2083.
by Alex_Boltyan_FXAnalyst
2
EUR/USD Jumps To Nine-Month Highs After U.S. CPI DataThe EUR/USD pair advanced sharply on Thursday and reached its highest level since April 2022 after data showed U.S. consumer inflation slowed down for a sixth consecutive month. At the same time, the euro got a boost from hawkish comments from European Central Bank (ECB) Governing Council members, which signaled more rate hikes in 2023. At the time of writing, the EUR/USD pair is trading at the 1.0850 area, 0.86% above its opening price. The pair reached a nine-month high of 1.0867 before easing. The greenback faced severe selling pressure during the American session after data showed the U.S. Consumer Price Index rose by 6.5% in December, just as the markets expected, posting a 0.1% monthly decrease and decelerating from its previous reading of 7.1%. Core inflation came in at 5.7% from November's 6% rate, matching the consensus, although core prices still posted a 0.3% monthly increase. As the annual inflation rate eased for a sixth consecutive month from its June peak of 9.1%, expectations of a less aggressive Fed are mounting. The WIRP tool suggests that investors practically discard a 50 bps hike in February as they are betting on 94.7% odds of a 25 bps increase. Against this backdrop, U.S. Treasury yields and the dollar took a hit, with the DXY index falling to its lowest level since June at 102.07. In contrast, ECB's Governing Council member Olli Rehn stated on Wednesday that rate increases will still be necessary over the course of the next several meetings in order to restore price stability. On the same line, ECB policymaker Pablo Hernandez de Cos suggested that in order to bring down inflation expectations, rates must be raised at a consistent rate going forward. From a technical perspective, the EUR/USD holds a short-term bullish bias according to the daily chart, as the pair is trading above its key moving averages while indicators are gaining momentum, with the RSI moving closer to overbought territory. On the upside, the next resistance is seen at the 1.0900 area, where the 50% Fibonacci retracement of the 1.2266 - 0.9535 decline stands. Beyond that level, April's monthly high of 1.0936 and the 1.0950 area are the next barriers. On the downside, short-term support levels are seen at 1.0800 and 1.0700, followed by the 20-day SMA around 1.0645.
by Alex_Boltyan_FXAnalyst
EUR/USD Hits Fresh Six-Month Highs, Inflation Data AwaitedThe EUR/USD pair rose for a fourth straight day on Wednesday but continued to trade within a constrained range as investors take the back seat ahead of the U.S. December Consumer Price Index (CPI) report on Thursday. In the meantime, hawkish comments from ECB Governing Council member Olli Rehn and the renewed U.S. Dollar weakness fueled the pair's rally. At the time of writing, the EUR/USD trades at the 1.0765 area, 0.32% above its opening price, having posted a fresh six-month high of 1.0776 at the beginning of the New York session. Attention remains on U.S. CPI figures. The annual inflation rate is expected to ease to 6.5% in December, down from 7.1% in November. Core inflation is seen slowing to 5.7% from 6.1% prior. If data confirms a deceleration of the inflation rate – the first decline in over two years for the core gauge – it could fuel expectations of a less aggressive Fed going forward, weighing on yields and the dollar. According to the WIRP tool, a 25 bp rate increase is completely priced in for the February meeting with less than a 30% probability of a greater 50 bp move. From a technical perspective, the EUR/USD holds a short-term positive bias according to the daily chart, as the pair is trading above its key moving averages while indicators are gaining upward momentum. On the upside, the 1.0780 zone stands as the immediate resistance level, ahead of the 1.0800 psychological threshold and the 50% retracement of the 1.2266-0.9535 decline at 1.0900. On the flip side, the following support levels are seen at Tuesday's low at 1.0710, the 20-day SMA around 1.0635 and the 1.0500 zone – broken descending trendline.
by Alex_Boltyan_FXAnalyst
EUR/USD Maintains Gains After Powell's Comments, Eyes CPIThe EUR/USD pair advanced slightly on Tuesday, although it was rejected by the 1.0760 area. As investors await U.S. Consumer Price Index (CPI) figures on Thursday, Jerome Powell refrained from commenting on the Fed's next move at the Riksbank's International Symposium on Central Bank Independence in Sweden. At the time of writing, the EUR/USD is trading at the 1.0740 area, posting a 0.13% daily gain. The pair struck a six-month high of 1.0760 on Monday and has been trading in a narrow range nearby ever since. Movements across the FX board are limited due to the lack of significant catalysts. Market participants await news on U.S. inflation as the nation will release its December Consumer Price Index (CPI) on Thursday. The annual inflation reading is expected to ease to 6.5%, down from the prior month's 7.1% rate, while the core gauge is foreseen at 5.7% from 6% in November. Meanwhile, U.S. bond yields recovered on Tuesday as the 2, 5, and 10-year bonds yield 4.27%, 3.75%, and 3.63%, respectively, all posting more than 1% daily gains. However, the dollar, as measured by the DXY index, failed to capitalize on the rising yields and trades virtually unchanged at the 103.25 level. Meanwhile, the WIRP tool suggests that the Fed tightening expectations have eased as the markets have already priced in a 25 bps hike at the February 1 meeting, while odds of a 50 bp increase hover below 30%. From a technical perspective, the EUR/USD pair holds a short-term positive bias according to the indicators on the daily chart, while the price trades above its main moving averages. If the EUR/USD manages to overcome the 1.0760 barrier, the next resistances could be faced at the 1.0800 psychological mark and the 50% retracement of the 1.2266-0.9535 decline at 1.0900. On the downside, the following support levels are seen at the 20-day SMA around 1.0632 and the 1.0510 zone.
by Alex_Boltyan_FXAnalyst
Gold Holds Near Eight-Month Highs Ahead of Powell's SpeechGold price consolidates near a multi-month high on Tuesday as investors take a breather ahead of Fed Powell's speech. A better market mood and dovish Fed bets have favored the recent gold rally. At the time of writing, the spot price XAU/USD is trading at the $1,875 area, a modest 0.2% above its opening price, after touching its highest level in eight months at $1,881 on Monday. At the same time, the U.S. dollar, measured by the DXY index, hit a seven-month low of 102.94 and currently trades around 103.30, virtually unchanged on the day. The greenback has remained under pressure amid lower bond yields, which could be seen as the opportunity cost of holding gold. The U.S. 10-year Treasury note currently yields 3.57%, from near 3.9% seen last week. While FOMC members have remained hawkish and continue to underline the Fed's commitment to bring down inflation, markets have fully priced in a 25 bp hike in February, with nearly 30% odds of a 50 bp increase.  Investors' attention turns to Federal Reserve Chair Jerome Powell's speech at the Riksbank's International Symposium on Central Bank Independence. While markets will scrutinize Powell's words for clues on the next move, he will probably reiterate its hawkish rhetoric. On Thursday, the U.S. Consumer Price Index figures will be published. Consumer inflation is expected to slow down to 6.5% over the year to December from 7.1% the previous month. From a technical perspective, XAU/USD holds a positive short-term bias according to indicators on the daily chart, while the price hovers near an eight-month high. Still, the RSI remains near overbought territory, which could give way to a phase of consolidation, or a modest correction, before another leg higher. On the upside, the immediate resistance level is seen at $1,880, followed by the 61.8% retracement of the $2,070 - $1,615 decline at $1,896. On the other hand, the following support levels are seen at weekly lows around $1,865 and the $1,820-25 area, where the 20-day SMA converges with month-to-date lows.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Bounces Off Monthly Lows After U.S. NFP, Services DataThe EUR/USD pair rallied on Friday, recovering most of the previous day’s losses after U.S. employment and services data cooled down jitters around Fed’s rate increases path. At the time of writing, the EUR/USD pair is trading at the 1.0640 area, 1.15 % above its opening price. The shared currency managed to erase daily losses, which saw the pair bottoming at a one-month low of 1.0481, but remains poised to post the first weekly decline after six consecutive gains. On the data front, the Eurozone harmonized consumer price index rose by 9.2% in the year to December, below the 9.7% increase expected. Across the pond, the U.S. Bureau of Labor Statistics reported the U.S. economy added 223,000 jobs in December, beating the market consensus of 200,000 but decelerating from its previous reading of 256,000 (revised from 263,000). The unemployment rate dropped to 3.5% versus the 3.7% expected, despite a slight increase in the participation rate. Meanwhile, wage inflation, gauged by the Average Hourly Earnings, fell to 4.6% YoY from its previous reading of 4.8%. Economic Activity data from the Institute for Supply Management (ISM) showed that the service sector in the U.S. is slowing down. The Services PMI decreased to 49.6 in December from its previous reading of 56.5, well below expectations of 55.1. The Services Employment and New Orders Indexes also showed poor results in the same period, printing at 49.8 and 45.2, respectively, both below consensus. Expectations that the Fed could increase rates by 50 bps next meeting cooled down on Friday, weighing on U.S. Treasury bond yields and on the dollar. According to the WIRP tool, the odds of a 50 bps increase dropped to 24.3% from Thursday’s 37.4%. Next week, the U.S. consumer price index will be on investors’ radars, looking for confirmation price pressures have continued to ease. From a technical perspective, the EUR/USD holds a short-term positive bias according to indicators on the daily chart, while the quick bounce from recent lows showed the bulls are not ready to give up. Regarding technical levels, the following resistance points are seen at the 1.0700 mark, followed by the December highs at 1.0736. On the other hand, support levels line up at the 20-day simple moving average at 1.0610, followed by the broken descending trendline that reinforces the 1.0500 psychological level and then the one-month lows at around 1.0480.
by Alex_Boltyan_FXAnalyst
Gold Rejected By Six-Month High, Eyes NFP DataThe U.S. dollar gained momentum on Thursday amid rising U.S. bond yields following the release of upbeat labor market data, which fueled expectations that the Fed will maintain its hawkish rhetoric.   At the time of writing, the spot price XAU/USD is trading at $1,833, 1.12% below its opening price, after scoring a daily high of $1,858 earlier in the session. On the other hand, the greenback, measured by the DXY index, gained more than 0.85% on the day and is trading at the 105.15 level.   Data from Automatic Data Processing, Inc. revealed that 235,000 new private jobs were created in December in the U.S., exceeding by far the 150,000 expected. Other data showed that initial jobless claims fell to a three-and-a-half-month low of 204,000 in the last week of 2022, adding to evidence that the labor market is not cooling off even with the Fed’s restrictive policy.   U.S. bond yields, which could be seen as the opportunity cost of holding gold, rose by 1% to 2% across the curve, with the 2-, 5-, and 10-year bond rates at 4.46%, 3.91%, and 3.72%, respectively, as investors are expecting a more aggressive Fed. In that sense, the WIRP tool suggests that the odds of a 50 bps hike are even up with the probabilities of a 25 bps increase as they rose to 47%, while a week ago, they stood at 27%. The nonfarm payrolls data tomorrow could be crucial for those expectations.   From a technical perspective, the XAU/USD holds a slightly positive short-term outlook despite the current correction, as the price hovers above its main moving averages on the daily chart. On the other hand, indicators point to a deceleration of the bulls’ momentum.   The following support levels are seen at the $1,820 area, followed by the 20-day SMA, currently at $1,806. On the other hand, resistance levels line up at the $1,850 area, and the six-month high struck on Wednesday at $1,865 ahead of the $1,896 level, which is the 61.8% retracement of the $2,070-$1,615 decline.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Holds On To Gains Above 1.0600 After Fed MinutesThe EUR/USD pair managed to maintain altitude after economic data from the EU and the U.S. and the release of the hawkish FOMC minutes from the last December meeting. At the time of writing, the EUR/USD pair is trading at the 1.0605 area, 0.56% above its opening price, while the dollar, measured by the DXY index, trades at 104.26, posting a 0.41% daily loss. The session's highlight was the release of the Federal Open Market Committee (FOMC) December meeting minutes, which showed members remained concerned about inflation levels. Even though they welcomed the last inflation reading, they want to see more evidence that inflation is on a downward path. No members anticipated rate cuts would be appropriate in 2023. Even though the minutes triggered short-term dollar gains, they quickly faded. EUR/USD slipped to the 1.0580 area only to bounce back above the 1.0600 levels minutes after. Earlier in the day, S&P Global released the final December PMIs figures. The Euro Zone's Services PMI was confirmed at 49.8, while the German index climbed to 49.2. Across the pond, the Institute for Supply Management (ISM) released mixed U.S. data. The Manufacturing PMI fell to 48.4 in December from its previous reading of 49, missing the market's consensus of 48.5. From a technical perspective, the EUR/USD short-term bias remains tilted to the upside, with indicators turning higher above their midlines on the daily chart, while the price struggles below the 20-day SMA but holds above longer-term ones. On the downside, a critical support level could be found at the 1.0520 area, where a broken descending trendline stands. As long as the EUR/USD holds above that level, downward movements can be considered as merely corrective. On the flip side, the 20-day SMA, currently at 1.0610, stands as immediate resistance, followed by the 1.0700 mark and the December monthly high of 1.0736.
by Alex_Boltyan_FXAnalyst
EUR/USD Dips Below 1.0600 As Dollar Stages Solid BounceThe EUR/USD pair tumbled to its lowest level since December 12 on Tuesday as the U.S. dollar soared across the board despite the mildly positive market mood. Lower-than-expected German inflation figures also weighed on the shared currency. At the time of writing, the EUR/USD pair is trading at the 1.0555 area, 1.0% below its opening price, after hitting a low of 1.0519 earlier in the session. Meanwhile, the DXY index trades at 104.60, posting a 1.1% daily gain. Data showed the preliminary estimate for the German Harmonized Index of Consumer Prices (HICP) for December increased at an annual rate of 9.6%, significantly below the 10.7% anticipated and slowing from 11.3% in November. Other data from the U.S. confirmed that the final estimate of the December S&P Global Manufacturing PMI came in at 46.2, just in line with expectations. Ahead of crucial data from the U.S. this week, the greenback managed to stage a strong rebound despite the retreat of American bond yields. The 10-year note currently yields 3.77%, while the 2-year note offers 4.4%, declining 1.5% and flat, respectively. From a technical view, the EUR/USD short-term outlook remains tilted to the upside, according to the daily chart. At the same time, the pullback can be considered as merely corrective as long as the EUR/USD holds above a broken descending trendline, which in fact, acted as support at the 1.0520 area. As for indicators, the RSI fell to its lowest level since November but holds above its midline, while the MACD prints higher red bars indicating that the bears are gaining traction. On the downside, the following support level is seen at the mentioned trendline at around 1.0520, followed by the psychological mark of 1.0500 and December lows at the 1.0430 area. On the other hand, the bulls need to reclaim the 20-day SMA, currently at 1.0608, to regain momentum and advance toward 1.0700 and then potentially to December’s highs at 1.0736.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Fails to Hold Above 1.0700 Amid Holiday-Thinned TradingThe shared currency posted minor losses against the dollar in the 2023 first trading session amid weak PMI data from Germany and the eurozone and thin trading conditions. The bond and stock markets in Europe and the US remained closed due to the New Year holiday. At the time of writing, the EUR/USD trades at the 1.0665 area, 0.32% below its opening price, while the dollar measured by the DXY index trades virtually unchanged at 103.50. S&P Global German Manufacturing PMI came in at 47.1 in December, slightly below the initial estimate of 47.4, while the Eurozone's came in at 47.8, matching the flash estimate. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented on the report saying, "risks to the demand outlook remain skewed to the downside with the global economic backdrop darkening and eurozone interest rates rising again in December." In the absence of first-tier macroeconomic data releases and while the US and European markets were closed, most pairs traded within narrow ranges across the FX market. From a technical view, the daily chart shows that the EUR/USD short-term outlook remains slightly bullish, as the price trades above its main moving averages. However, indicators are sending mixed signals as the RSI turned south but hovers above its midline while the MACD prints decreasing red bars. On the upside, the EUR/USD needs to break above the 1.0700 mark to regain bullish momentum, aiming at December's monthly high of 1.0736. On the other hand, the 20-day SMA around 1.0603 stands as immediate support, followed by the 1.0530 and 1.0500 areas.
by Alex_Boltyan_FXAnalyst
U.S. Dollar Index Ends The Week Lower But Holds Onto 2022 GainsThe U.S. dollar, measured by the DXY index closes the last trading week of 2022 with losses, posting the third consecutive weekly decline in the absence of high-impact macroeconomic data releases and amid thinned-holiday volume. At the time of writing, the DXY trades at the 103.50 area, 0.25% below its daily opening price and 0.73% lower in the week. ISM and S&P Global PMI data EU and U.S. will be on the economic docket for the first week of 2023, but more crucially, the United States will release its December nonfarm payrolls report, which could influence the expectations regarding the Fed's decision on February 1. As for now, investors are betting on higher probabilities of 69.7% of a 25 bps hike and 30.3% odds of a 50 bps increase. From a technical perspective, although the DXY index holds a short-term negative bias, the broader picture remains bullish as the price holds above an ascending trendline drawn from May 2021 lows. Still, the index has staged a steep downward correction throughout the last quarter of the year, weighed by expectations (and realization) of a less aggressive Federal Reserve, which sent the DXY from a 20+-year high of 114.78 in September to current levels around 103.50 to close the year. The DXY however, holds on to an over 8% gain in 2022. A break below the mentioned trendline of around 102.00 could deteriorate the longer-term picture. Conversely, a recovery above the 20-week SMA at around 108.50 could re-ignite the bullish trend.
TVC:DXY
by Alex_Boltyan_FXAnalyst
EUR/USD Edges Higher But Remains Capped By 1.0670The EUR/USD edged higher on Thursday as the dollar faced mild selling pressure following the release of jobless claims data. However, the EUR/USD upside potential is limited due to a scarce economic calendar and Covid-related concerns in China. At the time of writing, the EUR/USD pair is trading at 1.0649, up 0.35% on the day, after being rejected once again by the 1.0670 area. Market sentiment deteriorated on Thursday amid reports of surging coronavirus infections in China, which is casting doubts about the economic recovery in the second-largest world economy. Furthermore, several Western countries have started to impose mandatory tests for people arriving from China after Beijing’s rollback of ‘zero-Covid’ policies. On the data front, U.S. initial jobless claims came in at 225,000 in the week ending December 23, in line with market expectations but above the previous reading of 216,000. Still, data had virtually no impact on prices while the volume remains thin ahead of the year-end. From a technical perspective, the EUR/USD short-term outlook remains slightly bullish, according to the daily chart. The price trades above its main moving averages while technical indicators start to recoup some traction. The RSI has gained slope and stands above its midline, while the MACD printed decreasing red bars. On the upside, the EUR/USD pair needs to overcome the 1.0675 resistance area, which has been capping advances over the last couple of weeks. A break above this level would expose the 1.0700 psychological level and the December monthly high of 1.0736. On the other hand, the immediate support level could be found at the 20-day SMA at around 1.0585, followed by 1.0540 and the 1.0500 mark.
by Alex_Boltyan_FXAnalyst
Gold Price Dips Below $1,800 But Keeps Bullish Short-Term BiasGold prices fell after two consecutive days of gains on Wednesday, with the spot XAU/USD retesting the $1,800 area amid low trading volume and swinging American bond yields. At the time of writing, the spot price XAU/USD is trading at the $1,808 zone, 0.33% below its opening price, after posting a daily low of $1,797 during the New York session. U.S. bond yields fell across the curve at the beginning of the day but bounced by the American afternoon, weighing on the yellow metal and sending the price briefly below the $1,800 level. The 2-, 5-, and 10-year bond rates stand at 4.35%, 3.96%, and 3.87%, respectively. In the meantime, the dollar, measured by the DXY index, dropped to a low of 103.84 before trimming losses. Heading into the year-end, no major data releases are scheduled, with market sentiment driving price action amid thinned-holiday volume. Investors' assessment of the U.S. inflation/growth outlook will determine the bond market movements and, therefore, the yellow metal's price dynamics. From a technical perspective, the XAU/USD short-term bias remains tilted to the upside, according to the daily chart. Although indicators offer mixed signals, the price trades above its main moving averages after the 20- and 200-day SMAs completed a bullish crossover last week. On the downside, the following support levels are seen at the 20- and 200-day SMAs at $1,795 and $1,782, respectively, and then at the December lows around $1,770. On the other hand, the $1,820 and Tuesday's high of $1,833 offer immediate resistance levels. A break above the latter could pave the way for the spot price to advance towards $1,842, which is the 50% retracement of the $2,070-$1,614 slide.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
GBP/USD Retreats From 1.2100 Amid Swinging Sentiment The GBP/USD pair retreated on Tuesday and slid back below the 1.2100 level as investors' sentiment wavered throughout the day amid thinned volume and in the absence of major macroeconomic data. At the time of writing, the GBP/USD pair is trading at the 1.2015 area, posting a 0.32% daily loss, while the greenback, measured by the DXY index, remains virtually unchanged on the day at the 104.20 area. The Cable has been oscillating in a 100-pip range, in tandem with market sentiment, which has been unstable and remains the main driver as investors square their positions into the year-end. Prospects of a less aggressive Federal Reserve have put the dollar under pressure throughout the fourth quarter, pushing the GBP/USD from an all-time low of 1.0356 in September to a six-month high of 1.2446 in mid-December. However, the rally lost steam during the holiday season. Currently, the WIRP tool indicates that investors are discounting a larger probability of a 25 basis point hike at the upcoming Fed meeting on February 1st, which would take the target range for the federal funds rate to 4.50%-4.75%. From a technical perspective, the GBP/USD short-term bias has turned slightly bearish according to indicators on the daily chart, with the RSI dropping below its midline and the MACD showing increasing red bars. In addition, the price has slid below the 20- and 200-day simple moving averages. On the downside, the next support level could be found at recent lows around 1.1990, followed by the 23.6% Fibonacci retracement of the mentioned rally at 1.1952 and then the 1.1900 area. On the other hand, resistances are seen at the 200- and 20-day moving averages, which sit at 1.2060 and 1.2175, respectively, ahead of the 1.2200 psychological level.
by Alex_Boltyan_FXAnalyst
EURUSD Consolidates Above 1.0600 Amid Holiday-Thinned Trading The EUR/USD pair advanced slightly on Monday but remained trading within a narrow range amid thin trading volume, with many European markets closed in observance of Boxing Day. At the time of writing, the EUR/USD pair is trading at the 1.0630 area, 0.14% above its opening price, having oscillated between a high of 1.0634 and a low of 1.0594. Ahead of the New Year, no first-tier data will be released, so the markets' pace will be dictated by risk impulses and by the investors' assessment of how the Federal Reserve will balance a recession and control inflation. On Friday, U.S. Personal Consumer Expenditure (PCE) data showed core PCE price index (a closely-followed inflation gauge) grew by 4.7% year-over-year in November, easing from the previous month's rate of 5%. This was the second straight decline in the PCE inflation rate to the lowest since October 2021. Still, data had little impact on markets. The WIRP tool suggests that investors are discounting higher odds of a 25 bps increase in the next Fed meeting on February 1st, which would take the target range for the federal funds rate to 4.50%-4.75%. From a technical standpoint, the EUR/USD short-term bias remains tilted to the upside with indicators pointing to decreasing bullish potential on the daily chart. In contrast, the price trades above its main moving averages but remains capped by the 1.0660 area. A break above 1.0660 could pave the way towards the 1.0700 psychological threshold en route to the December monthly high of 1.0736. On the other hand, the immediate support level could be faced at the 1.0550-55 area, where the 20-day SMA converges with a broken trendline, followed by the 1.0500 zone.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Ends The Week Higher But Lacks Momentum The EUR/USD pair continued to gravitate around the 1.0600 area on Friday barely reacting to U.S. Personal Consumption Expenditure (PCE) Price Index data and ending the week slightly above its opening price.   At the time of writing, the EUR/USD pair is trading at the 1.0620 area, 0.25% higher on the day, after hitting a daily high of 1.0632 earlier in the session.   The U.S. PCE Price Index (the preferred Federal Reserve’s inflation gauge) increased by 5.5% over the 12 months to November, slightly above expectations but slowing from the 6.1% October reading. The Core PCE Price Index rose by 4.7% in the same period, matching the investors' estimates and below the previous reading of 5%.   Meanwhile, Durable Goods Orders dropped 2.1% in November, well below the consensus of a 0.6% decline. The Nondefense Capital Goods Orders excluding Aircraft increased by 0.2%, beating the market consensus.   Still, macroeconomic data had little impact on the greenback, which weakened versus most competitors amid thinned trading conditions heading into the final trading week of 2022.  From a technical perspective, the EUR/USD short-term bias remains bullish as the price stands above its main moving averages on the daily chart, although indicators show dwindling momentum. The RSI holds a neutral slope above its midline, while the MACD prints higher red bars reflecting the lack of upward strength.   On the upside, the immediate resistance level is given by the weekly highs at the 1.0660 area, followed by the 1.0700 psychological mark. On the downside, support levels could be found at a ​​broken descending trend line drawn from May 2021 highs, around the 1.0560-70 zone, followed by the 20- and 200-day SMAs at 1.0539 and 1.0332, respectively.
by Alex_Boltyan_FXAnalyst
Gold Takes A Breather As Dollar RecoversGold prices took a breather on Wednesday following a sharp rally the previous day, as the dollar recovered modestly across the board despite the pullback seen in U.S. yields. At the time of writing, the spot price XAU/USD is trading at the $1,815 zone, virtually unchanged on the day, after hitting a six-month high at $1,823 an ounce at the beginning of the New York session. U.S. bond yields are slightly down this Wednesday, with the 2-, 5-, and 10-year rates at 4.20%, 3.75%, and 3.67%, respectively. Meanwhile, the greenback, measured by the DXY index, managed to move a tad higher, trading at the 104.10 area by the end of the American session, 0.13% above its opening price after two consecutive days of losses. U.S. macroeconomic data came in mixed. Existing Home Sales dropped in November for the 10th straight month to an annual rate of 4.09 million, below the market consensus of 4.20 million, while the Conference Board Consumer Confidence Index rose to 108.3 in December, beating the 101.00 forecast. From a technical standpoint and according to the daily chart, the yellow metal holds a short-term bullish perspective. Despite indicators sending mixed signals, the XAU/USD price trades above its main moving averages, while the 20-day and 200-day SMA are about to complete a bullish crossover. On the upside, the immediate resistance level is given by the six-month high of $1,823, followed by $1,842, which is the 50% Fibonacci retracement of the $2,070-$1,615 decline. On the flip side, the next support levels are seen at the $1,800 psychological level and the $1,785 area, the confluence of 20- and 200-day SMAs.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
1
EUR/USD Consolidates Above Critical Support Level The EUR/USD pair trades virtually unchanged on Tuesday, holding above the 1.0600 level as investors remain in wait-and-see mode after an eventful week.   At the time of writing, the EUR/USD pair is trading flat at the 1.0610 area, having pulled back from a daily high of 1.0658. Meanwhile, the dollar measured by the DXY index posts a 0.58% daily loss at around 104.05 despite the advance of U.S. yields across the curve after the Bank of Japan policy tweak.   On the data front, the German Producer Price Index grew by 28.2% over the 12 months to November, decelerating from its previous rate of 34.5% and below the market's consensus of 30%.   Across the pond, housing data came in softer-than-expected, also weighing on the greenback. Building Permits fell by 11.2% in November, while Housing Starts declined by 0.5% in the same period.   From a technical perspective, the EUR/USD short-term bias remains bullish as the shared currency continues to trade above its main moving averages on the daily chart and above a broken trendline drawn from May 2021 highs.   Still, indicators are losing bullish momentum, which could see the pair entering a consolidation phase. The RSI is flat above its midline, but the MACD has printed a higher red bar.   As for technical levels, the broken trendline at around the 1.0570 zone continues to offer support for the EUR/USD. Loss of this level would pave the way to retesting the 20- and 200-day SMA of 1.0510 and 1.0340, respectively. On the other hand, resistances are seen at the 1.0660 area, this week's high, followed by the 1.0700 mark.
by Alex_Boltyan_FXAnalyst
EUR/USD Holds 1.0600 Level Amid Upbeat German DataThe EUR/USD pair started the week on a positive note fueled by better-than-expected German data, although it trimmed gains during the New York session. At the time of writing, the shared currency trades at 1.0610, 0.2% higher on the day after peaking at a daily high of 1.0658 earlier in the session. The German IFO data showed an optimistic economic outlook. The Business Climate Index came in at 88.6 in December, above the market consensus of 87.2, while the Current Assessment indicator also beat the expectations at 94.4 versus the 93.5 expected. Likewise, the Expectations index jumped to 83.2, above the 82 foreseen by analysts. On the other hand, the greenback traded soft as markets are still pondering the recent FOMC decision. The terminal rate discounted by the swaps market has fallen back to just below 5.0%, while the WIRP tool suggests that a 50 bps hike in February is only 33% priced in, followed by a 25 bps hike either in March or May. Meanwhile, European Central Bank vice-President Luis de Guindos said the bank will continue raising rates to combat inflation. "There will be more interest rate hikes, until when, I don't know. I am absolutely honest, I don't know," De Guindos said. From a technical standpoint and according to the daily chart, the EUR/USD pair holds a short-term bullish perspective. However, there are some signs of dwindling momentum coming from indicators, which suggests that the pair may enter a consolidation phase. Still, the EUR/USD pair remains above a broken descending trendline drawn from May 2021 highs, which supports the bullish case. On the upside, the EUR/USD next resistance could be found at daily highs around 1.0660, followed by last week's highs just below the 1.0700 mark. On the other hand, short-term supports are seen at the mentioned trendline at around 1.0570, the 20-day SMA at 1.0490 and the 1.0400 level.
by Alex_Boltyan_FXAnalyst