Market Update - 14 March 2023

USD/JPY picks up bids to rebound from one-month low, snaps three-day downtrend. Markets consolidate SVB-led moves amid mixed concerns surrounding Fed. US two-year Treasury bond yields pare the biggest daily loss since October 1987. Receding fears of US financial crisis contagion, optimism for China recovery also favor Yen buyers.

The index bounces off recent lows and approaches 104.00. Bets for a pause in the Fed’s tightening cycle remain on the rise. All the attention will be on the release of US inflation figures. The greenback seems to have met some respite from the recent sharp selling pressure and approaches the 104.00 region when tracked by the USD Index (DXY) on turnaround Tuesday.

EUR/JPY is looking to scale above 143.00 for a fresh upside as hawkish ECB bets are intact. The absence of recession in the Eurozone economy might postpone the achievement of the 2% inflation target. The release of the BoJ minutes will provide a detailed explanation behind the stable monetary policy.

GBP/USD has corrected further to near 1.2150 as the safe-haven appeal improves. The street is expecting Fed chair Jerome Powell to look for a smaller rate hike or halt the rate-tightening spell. a higher jobless rate and lower employment bills figure would delight the BoE.

NZD/USD holds lower ground near intraday low, snaps two-day winning streak. RSI retreat backs the Kiwi pair’s U-turn from 200-EMA, one-month-long resistance line. Receding bullish bias of MACD signals, failure to cross key upside hurdles keep sellers hopeful. Fortnight-old horizontal support area lures bears past 100-EMA break.

AUD/USD consolidates the biggest daily gains in nine weeks amid sluggish markets. Traders take a breather following the SVB-infused volatility; US dollar licks its wounds ahead of US CPI. Downbeat Aussie NAB data, China fears also allowed Aussie bulls the much-needed break.

EUR/USD is hoping for an intermediate cushion around 1.0700 on less-hawkish Fed bets. The rationale behind short unwinding in the USD Index is the anxiety among the market participants for the US inflation. ECB would continue its bigger rate hike spell despite SVB's collapse.

USD/CAD clings to mild gains after bouncing off short-term key technical supports. Convergence of 50-SMA, one-month-old ascending trend line restricts immediate downside. Horizontal area comprising early January lows adds to the downside filters. Descending resistance line from Friday, bearish MACD signals challenge Loonie pair buyers.

USD/CHF bounces off five-week low to print the first daily gain in five. US Dollar traces corrective bounce off yields to pare recent losses. Interest rate futures raise doubts on further USD/CHF advances unless US inflation markets notable jump.

USD/MXN remains sidelined after refreshing five-week top the previous day. Upbeat oscillators, clear upside break of previous key resistance line keep Mexican Peso pair buyers hopeful. Sellers need validation from 18.65 to retake control.

USD/INR pares the biggest daily gains in seven weeks amid sluggish session. Indian equity rout, downbeat inflation data drowned Rupee the previous day despite broad US Dollar weakness. Fed pivot chatters highlight US CPI for February as SVB-led market fears ease.

USD/TRY struggles for clear directions after snapping two-day downtrend trend previous day. Corrective bounce in US Treasury bond yields defends US Dollar bulls but talks of Fed policy pivot weigh on prices. An increase in the Turkish Current deficit probe Lira buyers ahead of US CPI.

USD/CNH portrays corrective bounce near one-month low, mildly bid of late. 50-DMA probes sellers but clear downside break of five-week-old ascending trend line, bearish MACD signals push back buyers. 100-DMA, monthly high act as final defence of China Yuan pair bears.

USD/MXN gains traction for the fourth straight day and trades near a one-month high set on Monday. Bulls now await a move beyond the 100-day SMA and 38.2% Fibo. confluence before placing fresh bets. Weakness back below the 18.35 horizontal support is needed to offset the near-term positive outlook.

WTI price is heading lower despite the softer US Dollar. Global growth concerns start to pick up on the back of the SVB fallout. An inflationary outlook will be key to watching for WTI price directions.

Natural Gas has turned lackluster after a vertical movement as the USD Index has rebounded from 103.50. The demand for natural gas might witness a bumpy road as industrial demand would decline due to higher rates from the Fed. The period between Winter and Summer in the US remains weak for Natural Gas demand.

Gold price eases from five-week high to pare the biggest daily gains in four months. United States Treasury bond yields lick their wounds ahead of US inflation data and probe XAU/USD bulls. SVB fallout weigh on Federal Reserve bets as interest rate futures suggest nearness to policy pivot. US CPI may offer immediate directions but risk catalysts, yields are crucial for clear view.

Silver price eases around monthly top after rising the most since early November 2022. Convergence of 50-day, 100-day EMAs challenge XAG/USD bulls. Bullish MACD signals, sustained bounce off multi-day-old support line keep Silver buyers hopeful.

Source: FXStreet, DailyFX

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