Daily Market Report

09/02/2023
11:33

After a clear increase in volatility following the latest FED rate decision, traders are taking a step back this week to digest the recent economic data.

Few releases are due for Thursday which can help the US Dollar to stabilize in the near term.
On the other hand, stocks remain mixed following recent Powell’s comments.

Later today, market participants are looking for the EU Leaders Summit while in the US, initial jobless claims are expected to rise from 183K to 190K.

Looking now at the latest price action developments in the major currency pairs alongside gold.

EURUSD

Euro sellers remain in control after the recent bounce failed from a key technical resistance located at the 1.0765 level.

In the near term, the trend is bearish, and prices are likely to stay under pressure if EURUSD keeps trading below the 1.0765-1.0800 resistance zone.

As of now, the pair might stabilize after reaching the hourly support of 1.0710, however, the upside potential remains limited.

In extension, a clear breakdown below the support level mentioned above can lead to a re-test of Tuesday’s low at 1.0670.

GBPUSD

This pair is still under pressure in the short term as prices found strong sellers at the hourly resistance of 1.2100.

Moreover, prices continue to respect a bearish price structure, which keeps the negative outlook unchanged. For the time being, the pair is likely to face choppiness in the coming hours especially if we do see a clear breakout above yesterday’s high.

If the decline resumes, we might see new sellers that are likely to send prices lower toward 1.2040 support in the next hours. On the flip side, if the 1.2100 barrier is cleared, buyers can target the 1.2150 level followed by 1.2170 resistance.

USDJPY

USDJPY managed to bounce after facing heavy selling pressure on Tuesday.

Earlier this week, the pair had extended its recovery to reach the 132.90 level which played the role of strong resistance. This level continues to act as a barrier for prices and the trend is likely to stay neutral in the near term unless a clear breakout happens in the coming days.

From a wider angle, the pair remains in a downtrend in the higher time frames, and if prices continue to trade below the 132.90 peak, the downside is likely to be dominant.

As of now, sellers are likely to put this pair under pressure again and a move back down towards 130.60 support will be highly anticipated.

USDCAD

The currency pair succeeded to bounce strongly from the 1.3360 support level to end the day in positive territory.

Technically, we can see that USDCAD has reintegrated its short-term range located between the 1.3520 and 1.3250 levels. This wide range can see increased volatility in the coming days; therefore, traders should wait until we see a clear break outside of this zone.

In the near term, if prices remain above the 1.3360 support, there are higher chances to see the pair heading north in the direction of the 1.3520 peak, especially if buyers succeed to overtake the 1.3470 resistance.

GOLD

Gold traded in line with our expectations as buyers managed to protect the hourly support zone located between the 1865 and 1860 levels.

Meanwhile, we might see a price stabilization as new sellers are likely to defend the 1885 resistance in the short term. For more clarity, the yellow metal needs to break and stabilize above the 1886 high to confirm a potential return in the direction of the key resistance zone of $1895-1900 per ounce.

For the time being, traders should keep an eye on the recent support zone as a break below it can trigger a strong decline toward the 1842 support followed by the 1835 level.

On the other side, a break above the 1886 resistance, should lead to a continuation higher toward the 1900 handle as mentioned previously.

Economic analyst
Amine Hiani