Market Update - 23 December 2022

GBP/USD attracts some buying on the last day of the week amid a modest USD weakness. A positive risk tone weighs on the buck, though hawkish Fed expectations help limit losses. Investors now look to the US PCE data to determine the near-term trajectory for the major.

EUR/USD regains some positive traction on Friday amid the emergence of fresh USD selling. A modest recovery in the risk sentiment is seen undermining demand for the safe-haven buck. Hawkish Fed expectations to limit the USD losses and cap the pair ahead of the US PCE data.

USD/JPY struggles for a firm intraday direction and seesaws between tepid gains/minor losses. A positive risk tone, widening US-Japan rate differential undermine the JPY and offer support. Bulls, however, seem reluctant and prefer to wait for the US PCE data before placing fresh bets.

US Dollar Index pauses two-day recovery amid sluggish markets. China flashes mixed signals but lackluster United States Treasury bond yields underpin cautious optimism, weigh on DXY. Firmer US data, President Joe Biden’s urge to tame inflation keeps US Dollar Index buyers hopeful. Firmer prints of Federal Reserve’s preferred inflation gauge, namely US Core PCE Price Index, needed to recall DXY bulls.

USD/CAD comes under some renewed selling pressure on Friday amid a modest USD downtick. A recovery in global risk sentiment is seen weighing the safe-haven buck and exerting pressure. Hawkish Fed expectations should limit the USD fall and lend support ahead of the US PCE data.

AUD/USD regains some positive traction on Friday amid a modest USD weakness. A positive risk tone undermines the buck and benefits the risk-sensitive Aussie. Hawkish Fed expectations, rising US bond yields should limit deeper USD losses. Traders might also prefer to wait for the US PCE data before placing fresh bets.

USD/CHF grinds higher after rising the most in a week, lacks upside momentum of late. US Dollar cheers firmer data, hawkish Fed bets and US President Biden’s comments. Headlines surrounding China, Russia flash mixed clues amid sluggish session. US Core PCE Price Index, Durable Goods Orders will be crucial for the bulls to keep reins.

NZD/USD takes offers to renew intraday low, prints five-day losing streak. Firmer US data, President Biden’s comments keep bears hopeful amid hawkish Fed bets. Absence of major New Zealand statistics adds strength to the bearish bias. US Core PCE Price Index, Durable Goods Orders for November will be important for near-term directions.

Gold price remains sidelined after snapping two-day downtrend earlier in Asia. China-linked optimism joins holiday mood to restrict immediate XAU/USD moves. Recently firmer US data renewed hawkish Fed bets and tease Gold sellers. Fed’s favorite inflation gauge, Durable Goods Orders should be watched carefully for further recovery.

Silver picks up bids to print the first daily gains in three. Three-week-old bullish channel, ascending trend line from late October keep buyers hopeful. MACD signals challenge upside bias but bears should remain cautious beyond $21.25.

WTI bears sinking in their teeth to test key support. Bears eye the 50% mean reversion area and prior support structure. West Texas Intermediate (WTI) was pressured lower on Thursday following three straight days of gains and the following technical analysis illustrates an indecisive market on the backside of the bearish trend.

Source: FXStreet, DailyFX

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.