Daily Market Report

14/04/2023
10:27

US stocks jumped while the US Dollar extended its decline on Thursday after the March producer price index data came out below expectations. This decline confirmed the recent slowdown in inflation following the latest consumer price index release.

All three major US stock indexes closed in green, the S&P500 rose by 1.33%, the Nasdaq climbed 1.99%, meanwhile, the Dow added 1.14%.

In addition, Gold rallied to reach the highest levels for this year at $2048 per ounce.
Later today, US retail sales are likely to remain unchanged at -0.4% while industrial production is expected to have declined in March from 0.3% down to 0.2%.

Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro extended its advance after successfully breaking above the 1.1000 psychological barrier.

Technically, The Euro remains in an uptrend and prices can target the next resistance at 1.1120 in the coming days. Meanwhile, 1.0975 has become the new support in this pair as the downside risk is likely to remain limited in the near term, this positive scenario will stay valid while prices continue to trade above the daily support of 1.0830 for the rest of this month.

Finally, it is important to note that the bullish momentum is strong in this pair and any potential decline is expected to be temporary.

GBPUSD

The British pound traded higher yesterday, and we have seen the pair overtaking the daily resistance of 1.2520 which confirms the positive outlook.

From a technical standpoint, the pair is trading inside a rising channel, and it is likely to remain well-supported while prices continue to hold above the 1.2400 support. In the coming hours, traders are expected to target the 1.2600 level ahead of the weekly close.

In the near term, the 1.2500-1.2480 zone represents the support zone and as long as the British pound remains above it, we expect this pair to stay strong.

USDJPY

This pair confirmed the short-term bearish reversal seen on Wednesday as sellers succeeded to push prices below the 132.80 support.

For the time being, the recent price action suggests that sellers can target the next support zone located between the 132.00-131.80 levels in the coming hours.

In the meantime, any bounce is likely to be temporary as the momentum has switched from bullish to bearish with the 132.80 level turning into new resistance. Therefore, traders should focus on the downside.

On the other side, a daily close above the 133.00 handle can weaken the negative outlook.

USDCAD

The pair faced heavy selling pressure after breaking below the psychological support of 1.3400.
The main trend is still bearish, and looking at the recent price action, we can see that prices can extend lower toward the next support which stands at the 1.3275 level followed by 1.3230 in extension.

In addition, the formerly broken support of 1.3400 is expected to turn into resistance if tested in the coming hours. Therefore, any recovery attempt is likely to fail while prices remain below the 1.3450 area.

From a wider angle, the pair is heading toward the lower band of the daily range as shown in the chart below.

GOLD

Gold rallied on Thursday as buyers succeeded to clear the 2032 resistance level.

As of now, the trend remains bullish, therefore, we might see a continuation higher toward the next resistance level located at 2052 followed by 2058 in extension. On the opposite, the 2032 level will provide support in case we see a downside retracement.

Looking at the technical picture, the yellow metal broke above the consolidation triangle as shown in the chart below at the end of last month, before testing it again earlier this month and starting a new acceleration to the upside.

Moreover, the series of higher highs and higher lows that started from 1934 support is confirming the existing bullish momentum.

Economic Analyst
Amine Hiani