Tuesday Briefing: From DXY, Gold to Latest FX Headlines; March 07, 2023

US Dollar Index Overview

  • DXY appreciates ahead of U.S. Fed Chair Powell’s Testimony and jumps back above 104.50 mark.
  • It made intraday high at 104.65 and low at 104.12 mark.
  • A day Chart and H1 chart with triple EMA suggest up trend for the time being.
  • Immediate hurdles are seen at 104.90 to 104.08 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 ahead of U.S. Fed chair Powell’s testimony and hovers around $1,830 mark.
  • The pair made intraday high at $1,851 and Low at $1,830 mark.
  • A day chart and H1 chart with triple EMA suggest down trend for the time being.
  • A sustained close above $1,838 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,827 on H1 chart will test further supports.

Key Headlines for the FX market:

  • The United States should change its “distorted” attitude towards China or “conflict and confrontation” will follow, China’s foreign minister said, while defending its stance on the war in Ukraine and its close ties with Russia. What to look for at China’s National People’s Congress annual session.
  • Ukraine’s top generals have vowed to keep defending the eastern city of Bakhmut, President Volodymyr Zelenskiy said, as Russian forces fought to tighten their siege and secure their first major battlefield gain in more than six months.
  • Israel Prime Minister Benjamin Netanyahu’s hard-right, religious government has divided Israel and sparked protests with sweeping judicial reforms.
  • North Korea said any move to shoot down one of its test missiles would be considered a declaration of war and blamed a joint military exercise between the United States and South Korea for growing tensions, state media KCNA said.
  • Britain’s government will set out plans for a new law barring those entering the country through unofficial routes from claiming asylum, in a bid to stop migrants arriving on its shores in small boats.
  • Unions in France organized a sixth day of nationwide strikes against President Emmanuel Macron’s pension reform plans, bringing trains to a halt, blocking oil refineries, and reducing power production.
  • Global shares were broadly steady and the dollar nudged higher, ahead of Federal Reserve Chair Jerome Powell’s testimony that could offer a steer on the outlook for U.S. rates, while soft Chinese trade data dented oil.
  • President Joe Biden will propose raising the Medicare tax on high earners to help keep the federal insurance program solvent as part of his budget, the White House said. The tax increase is part of a package of proposals aimed at extending the solvency of the Medicare’s Hospital Insurance (HI) Trust Fund by at least 25 years.
  • The White House is considering restarting the detention of migrant families caught crossing the U.S.-Mexico border, four current and former officials told Reuters.
  • A group of the world’s biggest copper producers said it aimed to slash direct and indirect greenhouse gas emissions to zero by 2050, in a move that could make the sector more attractive to environmentally-conscious investment funds.
  • Latin American central banks have dashed hopes that they will back off sky-high benchmark interest rates, amid stubbornly high inflation, expected further tightening by the U.S Federal Reserve, and political risks in some cases.

Source: Reuters

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

Take a look and do trade wisely!
Good Luck