Daily Market Report

18/04/2023
10:19

All major US stock indexes closed higher on Monday as investors await a busy earning week ahead.

The Dow added 100 points, the Nasdaq Composite climbed 0.28% while the S&P500 rose 0.33%. On the other side, the US Dollar extended its recovery, in the meantime, gold prices retreated ending the day below the $2000 mark.

Looking at the major economic releases for today, in the UK, traders will be waiting for the latest employment data to drive the British pound price action. February’s unemployment rate is likely to remain unchanged at 3.7% while employment change is expected to have declined from 65K down to 50K only.

In Canada, market participants expect an increase in inflation as the CPI figures are due to rise from 0.4% to 0.5%. If those estimates are confirmed, the Bank of Canada might review its last decision to stop raising interest rates for an extended period.

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

EURUSD

The Euro traded lower on Monday after breaking below the hourly support of 1.0980.

Technically, the trend remains bullish in the higher time frames. Meanwhile, buyers should keep prices above 1.0830-1.0790 levels as a breakdown below it will confirm a bearish reversal in this pair. As of today, we might see price stabilization in the coming hours, however, any recovery attempt is expected to find strong sellers from the short-term resistance zone located between 1.0965 and 1.1000 levels.

Finally, the downside pressure is likely to stay in the near term while prices continue to trade below the psychological barrier of 1.1000, on the opposite, a daily close above this level should warn about a continuation of the upside.

GBPUSD

The British pound extended its decline as sellers managed to push prices below the 1.2400 handle.

From a technical standpoint, the pair started a corrective move to the downside confirmed by the break below the lower band of the rising channel as shown in the chart below.
In the near term, the momentum has turned bearish and 1.2350 is the key level to defend for buyers as it represents short-term support, while a breakdown below it can lead to another wave lower in the direction of 1.2275.

On the flip side, a daily close above 1.2440 is needed to confirm the end of the current retracement.

USDJPY

This pair began the week on a positive note as we have seen a successful breakout above the 133.80 hourly resistance.

For the time being, the recent price action suggests that buyers can target the next resistance zone located between the 134.70-135.20 levels in the coming hours.

In the meantime, any retracement is likely to be temporary as the momentum has switched from bearish to bullish with the 133.80 level turning into new support. Therefore, traders should focus on the upside in the near term.

From a wider angle, the negative outlook is weakening after yesterday’s close above the 134.00 psychological barrier.

USDCAD

The pair managed to bounce from the oversold territory after reaching a low of 1.3300.
As of now, the current advance can extend toward the hourly resistance zone located between 1.3430 and 1.3460 levels.

Meanwhile, the trend is still bearish in this pair and sellers are expected to counter any upside retracement as the upside potential remains limited. The downside pressure is likely to stay unchanged while prices continue to trade below the 1.3555 high.

On the other side, the nearest support stands at 1.3360 followed by the 1.3340 level in extension.

GOLD

Gold retreated on Monday after sellers took the control of the yellow metal in the near term.

Prices slid below the 2000 psychological level reaching a low of $1980 per ounce which confirms that gold has entered a corrective phase.

As of now, the trend remains bullish on the higher time frames, however, the short-term momentum has turned negative which can keep the upside potential limited.
From an intraday perspective, the 1980 level is expected to provide support in case it is tested again, while a break below it should expose the next support at $1970 followed by $1960 in extension.

On the opposite, a daily close above the 2015 level is needed to confirm the end of the current downside retracement, otherwise, the bearish pressure will likely persist.

Economic Analyst
Amine Hiani