Market Update - 20 February 2024

EUR/USD retreats from the weekly high of 1.0789, which was recorded on Monday, snapping a four-day winning streak. The pair trades lower around 1.0770 during the Asian hours on Tuesday with positioning above the immediate support at the psychological level of 1.0750. (FXStreet)

USD/JPY strengthens for the third consecutive trading day, supported by a stronger US Dollar (USD). This uptrend can be attributed to market sentiment, which is biased towards the possibility of the Federal Reserve (Fed) refraining from implementing any rate cuts in the upcoming meetings in March and May. This sentiment has been reinforced by stronger data on consumer and producer prices released last week. The USD/JPY pair trades higher around 150.30 during the early European session on Tuesday. (FXStreet)

GBP/USD continues to remain in the negative territory, trading around 1.2580 during the Asian session on Tuesday. The strength of the US Dollar (USD) could be attributed to the improved US Treasury yields, which in turn, weighs on the GBP/USD pair. Traders are awaiting meeting minutes from the Federal Open Market Committee (FOMC) scheduled for Wednesday. (FXStreet)

The USD/CAD pair trades on a stronger note above the 1.3500 psychological mark during the Asian session on Tuesday. The uptick of the pair is bolstered by the stronger US Dollar (USD). The Canadian inflation data will be in the spotlight on Tuesday and could trigger volatility in the market ahead of the FOMC Minutes. At press time, USD/CAD is trading at 1.3506, gaining 0.12% on the day. (FXStreet)

NZD/USD: Retail trader data shows 48.93% of traders are net-long with the ratio of traders short to long at 1.04 to 1. In fact, traders have remained net-short since Feb 12 when NZD/USD traded near 0.61, price has moved 0.26% higher since then. The number of traders net-long is 2.33% lower than yesterday and 8.06% lower from last week, while the number of traders net-short is 28.43% higher than yesterday and 1.87% lower from last week. (DailyFX)

On Tuesday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.1068 as compared to Monday's fix of 7.1032 and 7.2080 Reuters estimates. (FXStreet)

Indian Rupee (INR) trades firmly on Tuesday despite the stronger US Dollar (USD). The INR is expected to trade with a modest positive bias, supported by carry trades and the speculation that the Reserve Bank of India (RBI) will ease monetary policy more slowly than the Fed. However, a continuation of debt-related dollar inflows, higher crude oil, and rising US bond yields might cap the upside of the pair in the near term. (FXStreet)

The USD/CNH pair trades in negative territory for the fifth consecutive day during the early European session on Tuesday. The People's Bank of China (PBoC) cut the five-year Loan Prime Rate (LPR) by 25 basis points (bps) from 4.20% to 3.95%, which is a key benchmark lending rate used to price mortgages. Meanwhile, the one-year LPR remained unchanged at 3.45%. USD/CNH is trading at 7.2090, down 0.03% on the day. (FXStreet)

EUR/GBP is closing in on multi-month support and traders should be aware of the multiple attempts to break lower. Traders should look for a reaction higher before considering any trade. A confirmed break of support will leave 0.8500 as the next level for traders to watch. (DailyFX)

West Texas Intermediate (WTI) oil price retraces its recent losses registered on Monday. WTI price trades higher around $78.30 per barrel during the Asian trading hours on Tuesday. The escalated threat of the oil supply disruption from the Middle East is supporting the prices of Crude oil. (FXStreet)

Gold price gains momentum for the fourth straight day during the early European session on Tuesday. The yellow metal trades in positive territory despite the rebound of the US Dollar (USD) and higher bond yields. Trading activity was low on Monday as markets closed in the US. However, investors will take more cues from the FOMC Minutes on Wednesday about the outlook for US interest rates. At press time, the gold price is trading at $2,020, adding 0.09% on the day. (FXStreet)

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.