Daily Market Report

10/03/2023
13:48

The US Dollar retreated on Thursday while major US stock indices extended the decline. The Dow fell more than 500 points, the S&P500 closed 1.8% lower and the Nasdaq lost more than 2% as higher interest rate expectations weigh on investors’ sentiment. As of today, all eyes will be on the US jobs report which is expected to bring some clarity about the recent labor market conditions. Three key economic indicators will determine the short-term direction of the US Dollar. Beginning with the US Non-Farm payrolls, which are expected to have declined in February from 517K to 205K only. On the other side, both the unemployment rate and the average hourly earnings figures are likely to remain unchanged at 3.4% and 0.3% respectively. Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro ended the day on a positive note as prices stabilized above the 1.0575 hourly resistance. Looking at the short-term price action, we can see that buyers succeeded to protect the key support of 1.0530 and we will be looking for a continuation higher that can target the next resistance at the 1.0620 level in the coming hours. Despite that the downside pressure remains in place, there is a possibility to extend the current recovery if the pair continues to trade above 1.0530. From a wider angle, the pair is trading inside a bearish channel and a break above the upper band is needed to confirm a potential upside reversal.

GBPUSD

The British pound managed to bounce from the 1.1800 psychological support after reaching oversold territories. As of now, the trend remains bearish, and prices are testing an important resistance zone located between 1.1920 and 1.1940 levels which can lead to price stabilization in the near term. If the pair succeeds to overtake this resistance zone, buyers will aim for higher prices that can reach 1.1990, on the opposite a failure below this barrier can lead to a move back lower in the direction of 1.1860 support. From a technical standpoint, the nearest resistance stands at 1.1940 while the closest support is located at 1.1900.

USDJPY

After breaking below the rising trendline as shown in the chart below, the pair extended its downside correction move toward the 136.00 level. Looking at the technical picture, we can see that the uptrend took the form of a series of higher and higher lows, keeping the outlook positive. In the short term, traders will focus on 136.50 as a key resistance followed by the 136.90 level in extension. If the pair holds below this resistance zone, the bullish momentum will likely continue to weaken, which can lead to a deeper correction toward the 135.55 support. On the other side, a successful breakout of 136.50 should clear the path for another rally in the direction of 136.90 resistance. For the time being, the trend remains bullish, and the current decline is expected to be temporary.

USDCAD

The pair extended its advance as expected after a brief retracement which found strong demand at the hourly support of 1.3750. Prices managed to exceed Wednesday’s highs reinforcing the bullish momentum. As of now, the next level of interest is located at 1.3855 followed by 1.3900 resistance. Technically, the pair is likely to remain strong above 1.3750 hourly support and any potential decline is expected to find strong buyers for another continuation higher. In the short term, the nearest support stands at the 1.3795 level while the key resistance lies at 1.3855. To conclude, the momentum remains strongly positive in this pair, and the current outlook will remain unchanged unless we see a daily close below 1.3750 support.

GOLD

Gold found strong buyers at the hourly support of $1909 per ounce and managed to create a higher low in the near term. Yesterday, the focus was on the 1823 resistance as mentioned in our previous report, however, the yellow metal succeeded to clear this level which bring back a potential bullish reversal onto the table. Moreover, gold ended the day above the 1830 barrier, which reinforces the current bullish momentum. In the coming hours, traders should keep an eye on the 1825-1823 support zone as prices are likely to remain steady while above it and another move higher is expected in the direction of the 1839 resistance initially. This positive scenario will remain valid unless we see a daily close below 1823 support.

Economic Analyst
Amine Hiani