Market Update - 20 January 2023

GBP/USD renews intraday low while snapping three-day uptrend after the key UK data. British Retail Sales slumped to -1.0% MoM in December versus 0.5% expected and -0.4% prior. Hawkish Fedspeak allows US Dollar to pare recent losses despite downbeat US data. Upbeat comments from BOE’s Bailey, JP Morgan’s upbeat outlook for UK economy put a floor under the Cable price. (FXStreet)

The index extends the consolidative theme around the 102.00 region. Risk appetite trends looks mixed so far at the end of the week. Housing data, Fedspeak next on tap in the US docket. The USD Index (DXY), which tracks the greenback vs. a bundle of its main rivals, extends further the consolidation theme on Friday, always around the 102.00 neighbourhood. (FXStreet)

GBP/JPY is approaching 160.00 as investors are still confused about forward Bank of Japan’s policy stance. Bank of England might discover a meaningful downtrend in inflation from the late spring amid tight monetary policy. Bank of Japan could look for an exit from the expansionary policy as inflation is stably rising. GBP/JPY might display a power-pack action after the release of the United Kingdom Retail Sales data. (FXStreet)

USD/JPY gains positive traction on Friday and draws support from a combination of factors. A further recovery in the US bond yields helps revive the USD demand and acts as a tailwind. A positive risk tone undermines the safe-haven JPY and provides an additional lift to the pair. (FXStreet)

EUR/USD retreats from intraday high, pares weekly gains around nine-month high. Wednesday’s bullish Doji, sustained trading above 10-DMA keeps buyers hopeful. Downside break of 1.0650 could confirm rising wedge bearish chart pattern on D1. (FXStreet)

AUD/USD gains some positive traction on Friday, though lacks follow-through. The USD benefits from rebounding US bond yields and caps gains for the pair. A mildly positive risk tone might act as a tailwind for the risk-sensitive Aussie. (FXStreet)

USD/INR probes three-day downtrend but bears approach seven-week-old key support line. Hopes of more foreign fund inflow due to moves of Indian private players underpin INR strength. Mixed US data weigh US Dollar even as Fed policymakers stay hawkish heading into pre-FOMC blackout. Firmer Oil price, RBI’s defensive move could challenge the USD/INR bears. (FXStreet)

USD/MXN is oscillating in a narrow range below the critical resistance of 19.00. The market mood is quite confusing as the S&P500 futures and US Treasury yields are showing a recovery. The Fed might announce two more 25 bps interest rate hikes before pausing the policy tightening program. (FXStreet)

NZD/USD clings to mild gains during two-week uptrend. Cautious optimism in the market joins sluggish US Treasury yields, USD to favor buyers. Hawkish Fedspeak, recession fears probe upside momentum amid light calendar. (FXStreet)

WTI retreats from intraday high, consolidates gains during two-week uptrend. Hawkish Fedspeak, downbeat US data underpin economic slowdown fears even as China demand puts a floor under the prices. Higher inventory build, recent pause in US Dollar’s downside also challenge Oil buyers. Risk catalysts are the key to fresh impulse amid a light calendar. (FXStreet)

Gold price is struggling to sustain above the immediate resistance of $1.930.00. Hawkish commentary from Fed policymakers is strengthening the US Treasury yields. According to a Reuters survey, the Fed will pause the policy tightening program after two 25 bps rate hikes. (FXStreet)

Silver edges higher on Friday, albeit lacks follow-through beyond the $24.00 mark. The technical setup favours bullish traders and supports prospects for further gains. A convincing break below the trend-channel support will negate the positive outlook. (FXStreet)

Source: FXStreet, DailyFX

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