Market Update - 26 January 2023

EUR/USD deflates a tad after hitting a new yearly high near 1.0930. Consumer Confidence in Italy disappointed expectations in January. US advanced Q4 GDP, Durable Goods Orders next of note in the NA session. (FXStreet)

USD/JPY reverses an intraday dip to a fresh weekly low, albeit lacks follow-through. A mildly positive tone undermines the safe-haven JPY and lends support to the pair. Bets for smaller Fed rate hikes keep the USD bulls on the defensive and cap gains. Traders also seem reluctant to place aggressive bets ahead of the US Q4 GDP print. (FXStreet)

USD/CAD gains some positive traction for the second straight day, though lacks follow-through. The BoC’s pivot on Wednesday continues to undermine the Loonie and lends support to the pair. Bets for smaller Fed rate hikes keep the USD bulls on the defensive and might cap the upside. Investors might also prefer to move to the sidelines and wait for the release of the US Q4 GDP. (FXStreet)

The index drops to the 101.50 level, or new 8-month low. US yields attempt a tepid rebound on Thursday. Flash Q4 GDP, weekly Claims, Durable Goods Orders next on tap. The greenback regains the 101.60/70 band after bottoming out in fresh 8-month lows around 101.50 when gauged by the USD Index (DXY) on Thursday. (FXStreet)

GBP/USD oscillates in a narrow trading band through the early European session on Thursday. Bets for smaller Fed rate hikes keep the USD bulls on the defensive and lend some support. Traders prefer to wait for the release of the Advance Q4 GDP before placing aggressive bets. (FXStreet)

GBP/JPY bounces off intraday low but stays negative on a day. BoJ Summary of Opinions suggest policymakers are divided considering higher inflation. UK Business Confidence gauge slumps to the lowest levels since 2009. Sluggish markets restrict immediate moves, Tokyo inflation eyed. (FXStreet)

AUD/USD seesaws around five-month high, up for the fifth consecutive day. Hong Kong’s upbeat return after five-day holidays, Tesla earnings underpin favor firmer sentiment. Strong Aussie inflation renewed talks of RBA’s 0.25% rate hike versus previous chatters of policy pivot. US Q4 GDP, PCE Price data will be crucial for clear directions ahead of next week’s FOMC. (FXStreet)

USD/INR pares recent losses amid holiday in India, cautious mood ahead of key US data. Mixed sentiment restricts market moves as traders await US Q4 GDP, PCE Price data. Odds favoring higher foreign fund inflow and softer Oil price favor INR buyers. Concerns surrounding Fed’s pivot keep US Dollar on a dicey floor. (FXStreet)

NZD/USD regains some positive traction amid the prevalent USD selling bias. Bets for smaller rate hikes by the Fed continue to weigh on the greenback. Traders now look forward to the Advance US Q4 GDP print for some impetus. (FXStreet)

Gold price takes the bids to renew nine-month high, up for the fourth consecutive day. US Dollar weakness underpins XAU/USD upside amid cautious mood ahead of the key United States Gross Domestic Product. Dovish bias surrounding the Fed contrasts with the hawkish outlook over ECB to weigh on USD and favor Gold buyers. Convergence of six-week-old ascending trend line, March 2022 peak could test XAU/USD bulls. (FXStreet)

Silver takes offers to renew intraday low as US Dollar licks its wound ahead of the key data. Sluggish markets, China-inspired optimism put a floor under XAG/USD prices. Firmer prints of US Q4 GDP could renew hawkish Fed bets and extend latest pullback. (FXStreet)

Prices of natural gas dropped further on Wednesday and are expected to put the $3.00 mark per MMBtu to the test sooner rather than later. The uptick in open interest and volume is supportive of that view and exposes a drop to the March 2021 lows near $2.40. (FXStreet)

Source: FXStreet, DailyFX

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