Market Update - 22 May 2023 

GBP/USD is making efforts for delivering extending upside as the USD Index loses strength. Federal Reserve Powell cited that tight credit conditions by the US banks are providing room to hold interest rates steady. Bank of England has already conveyed that they underestimated the strength and persistence in inflation. GBP/USD delivered a perpendicular fall after a breakdown of the upward-sloping trendline plotted from 1.2275. (FXStreet) 

AUD/USD fades bounce off intraday low, struggle to defend the previous day’s bounce off one-month low. US President Joe Biden appears optimistic about Sino-American ties, US debt ceiling talks. China bans Micron Technology, US Republicans seem to stick to their demand and prod risk-on mood. PBOC inaction, doubts about hawkish RBA challenge Aussie pair buyers amid mixed Fed talks. (FXStreet) 

EUR/USD retreats from intraday high as US Dollar pares recent losses. ECB’s Lagarde tries to defend hawkish bias but says to have covered large chunk of journey toward taming inflation. Fed Chair Jerome Powell cites banking crisis to ease pressure on the bank to raise rates, Fed’s Kashkari sounds defensive. US President Joe Biden’s comments on Sino-American ties, US debt ceiling favor recent sentiment and US Dollar. (FXStreet) 

GBP/JPY is demonstrating topsy-turvy moves above 171.40. Inflationary pressures in the UK economy are not in the mood to ditch the double-digit territory. BoJ Ueda believes that Japan's inflation is likely to slow back below 2% in the middle of the current fiscal year. (FXStreet) 

USD/JPY has scaled sharply to near 138.00 as the USD Index has defended its downside near 103.00. The Fed is expected to pause its aggressive policy-tightening spell as US banks’ tight credit conditions have squeezed liquidity disbursement. The Japanese economy is showing resilience as Q1 GDP and inflation have expanded significantly (FXStreet) 

The index extends the corrective decline and puts 103.00 to the test. Negotiations over the debt ceiling will take centre stage later in the week. The FOMC Minutes, PCE will be in the limelight this week. The greenback, in terms of the USD Index (DXY), starts the new trading week slightly on the defensive and near the 103.00 neighbourhood. (FXStreet) 

USD Index focuses on dent ceiling, FOMC USD/INR has dropped from a two-month high of 82.90 amid a decline in the USD index. The headlines of the face-to-face US Biden-McCarthy meeting has improved risk sentiment. Fed Kashkari cited that he is interested in supporting Federal Reserve for holding interest rates steady in June. (FXStreet) 

USD/TRY has refreshed its all-time high above 19.80 as the focus has shifted to US Biden-McCarthy talks. House of Representative McCarthy wants a hefty 8% cut in overall spending proposed by Democrats for the budget. Escalating political uncertainty in Turkey is consistently weighing on the Turkish Lira. (FXStreet) 

USD/CHF prods 12-day-old ascending support line, extends the previous day’s pullback from 1.5-month high. Swiss Q1 Industrial Production growth eased to 3.4% YoY versus 6.1% prior. US Dollar traces sluggish markets amid mixed concerns about debt ceiling, Fed. US PMIs, Fed Minutes to decorate calendar but US default updates will be crucial for immediate directions. (FXStreet) 

Natural Gas Price remains pressured after reversing from 11-week high. Bearish MACD signals, RSI’s retreat from overbought territory adds strength to downside bias about XNG/USD. Weekly support line, 200-SMA holds the key to further downside of the Natural Gas Price. (FXStreet) 

Gold price struggles to defend Friday’s corrective bounce off seven-week low. Haywire US debt ceiling talks flag default fears and weigh on US Dollar, putting a floor under XAU/USD. Federal Reserve communications have also been unimpressive and poke Gold bulls. US PMIs, Fed’s favorite inflation gauge and debt ceiling negotiations are crucial for XAU/USD directions. (FXStreet) 

Silver edges lower on Monday and reverses a part of Friday’s recovery from the 100-day SMA.The technical setup still favours bears and supports prospects for a further depreciating move. A sustained strength beyond the $25.00 mark is needed to negate the near-term negative bias. (FXStreet) 

Source: FXStreet

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