Thursday Briefing: From DXY, Gold to Latest FX Headlines; Feb 02, 2023

US Dollar Index Overview

  • DXY rises sharply after U.S. released mixed economic results and jumps back above 101.50 mark.
  • It made intraday high at 101.73 and low at 100.87 mark.
  • A day Chart and H1 chart with triple EMA suggest down trend for the time being.
  • Immediate hurdles are seen at 101.92 to 101.12 mark.
  • A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Technical Analysis: XAU/USD (Gold)

  • Gold spikes down sharply after U.S. mixed economic results and slips back below $1,930 mark.
  • The pair made intraday high at $1,959 and Low at $1,925 mark.
  • A day chart and H1 chart with triple EMA suggest up trend for the time being.
  • A sustained close above $1,938 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,922 on H1 chart will test further supports.

Key Headlines for the FX market:

  • Higher stock markets showed the bulls were still firmly in charge on Thursday as the European Central Bank and Bank of England followed the U.S. Federal Reserve in extending one of fastest rise in global interest rates on record.
  • The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment.
  • ECB raised key policy by 50 basis points to 3.00 pct.
  • Federal Reserve Chair Jerome Powell had a clear message on Wednesday: as “gratifying” as it is that inflation has begun to slow, the central bank is nowhere near to reversing course or declaring victory.
  • U.S. factory orders for December 1.8% versus 2.2% estimate.
  • The United States has answered President Volodymyr Zelenskiy’s plea for rockets that can strike deep behind the front lines of the nearly year-long conflict with Russia.
  • India’s Adani group shares sank after market turmoil forced the conglomerate to axe a crucial $2.5 billion stock offer, deepening its market losses to more than $100 billion.
  • The Federal Reserve said it had turned a key corner in the fight against high inflation, but that “victory” would still require its benchmark overnight interest rate to be increased further and remain elevated at least through 2023.
  • A Russian missile destroyed an apartment building in the eastern Ukrainian city of Kramatorsk as top European Union officials arrived in Kyiv for talks seen as key to Ukraine’s pivot towards the West.
  • The Philippines has granted the United States expanded access to its military bases, their defense chiefs said, amid mounting concern over China’s increasing assertiveness in the disputed South China Sea and tensions over self-ruled Taiwan.
  • North Korea’s Foreign Ministry said that drills by the United States and its allies have pushed the situation to an “extreme red-line” and threaten to turn the peninsula into a “huge war arsenal and a more critical war zone.
  • Biden and Republican House Speaker Kevin McCarthy held initial talks about raising government borrowing limits in a first test of how the two will work together, with both sides agreeing to talk more.

Source: Reuters

Keep an eye open for the latest news and fundamentals affecting the FX markets.

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