In this article, we have covered the highlights of global market news about the USD/JPY, EUR/USD, AUD/NZD and GBP/USD.
USD/JPY Price Analysis: Price eases off 50% Fibo, while buyers remain optimistic above 132.00
For the first time in three days, USD/JPY grinds around the intraday bottom, modestly offered at 132.30 going into Tuesday’s European session.
The Yen pair does this by backing away from the 50% Fibonacci retracement level of the pair’s movements between the previous December and January 2023 using cues from the RSI (14). The upward breach of the previous week’s major barriers still supports. Thus the quotation is still on the bull’s radar.
Nevertheless, the consolidation of the most recent run-up and the RSI’s pullback from the overbought area seem sensible. However, buyers of the Yen pair are favored by the bullish MACD signals and the successful trading beyond the resistance levels that converted into support levels.
Before the 130.00 psychological magnets, the 200-SMA level at 130.80 is the immediate support for the USD/JPY bears to monitor.
The prior resistance level from mid-December 2022, at the latest at 129.40, may serve as the USD/JPY bulls’ last line of defense.
Instead, a clear upward breach of the 50% Fibonacci retracement level at 132.75 might push the USD/JPY upward to the 61.8% Fibonacci retracement, sometimes referred to as the golden level at 134.05.
EUR/USD bulls struggle around the mid-1.0700s, with attention focused on ECB discussions. Powell, Fed president
By reversing from the daily peak, the EUR/USD weakens the early Asian session rebound. However, the main currency pair is still holding onto its first daily gains in four days, at about 1.0740 on Tuesday morning in Europe.
The recent decline in the quotation may be related to the recent increase in the US Dollar Index (DXY) after a gloomy morning. It is noteworthy that the DXY and 50-DMA are jostling during an inactive session before the important central speeches, mainly from Europe and the US.
The DXY’s comeback from the intraday low closely follows the rates on US Treasury bonds, except for pre-event jitters and a light schedule. However, despite tries to reverse the early fall, the benchmark 10-year Treasury rates are still primarily quiet at 3.62% as of press time.
The remarks of US President Joe Biden, US Treasury Secretary Janet Yellen, and Federal Reserve Bank of Atlanta President Raphel Bostic supporting aggressive activities from the Federal Reserve (Fed) authorities and fading economic problems around the US additionally test the EUR/USD bulls.
Even though the German factory orders, retail sales, and Eurozone Sentix Investor Confidence index are good indicators, the ECB officials seem less hawkish than their Fed colleagues. Robert Holzmann, a European Central Bank (ECB) policymaker, said on Monday that the danger of doing too little is much greater than the risk of an overly restrictive policy.
The AUD/NZD crosses 1.0980 as the RBA raises the OCR by 25 basis points to 3.35%.
The Reserve Bank of Australia (RBA) has announced a 25 basis point increase in the Official Cash Rate (OCR), which has caused the AUD/NZD pair to soar spectacularly higher above 1.0980. (bps). The OCR has increased to 3.35% since the degree of the increase stayed within predictions. This is the RBA’s ninth straight interest rate increase after the epidemic period and the fourth consecutive 25 bps increase.
Given that Australian inflation has not yet shown signs of slowing, the general public was already anticipating a hawkish monetary policy from RBA Governor Philip Lowe. Despite a tight labor market, the Australian Consumer Price Index (CPI) has already risen to 7.8%, and higher interest rates do not have the desired effect.
According to the RBA Governor Philip Lowe’s February monetary policy statement, the central bank expects inflation to moderate this year due to global causes and a slower pace of domestic demand growth. By the end of this year, the unemployment rate will rise to 3.75%, and by the middle of 2025, it will reach 4.5%. However, GDP growth is anticipated to slack down to around 1.5% in 2023 and 2024. Despite having a very tight monetary policy, it is essential to note that the central bank does not see any indicators of a recession in the Australian economy.
In New Zealand, the Reserve Bank of New Zealand (RBNZ) has begun to affect employment figures by raising interest rates to rein in spiraling inflation. Employment numbers in New Zealand remained negative last month, and indications of a slowing inflation rate suggest that RBNZ Governor Adrian Orr may sound less hawkish in this month’s monetary policy.
GBP/USD Price Analysis: Cable pares losses on its path to 200-day moving average support
Early on Tuesday morning in Europe, GBP/USD consolidates recent losses while gaining bids to 1.2050, recording the first daily gains in four days. In doing so, the Cable pair supports the RSI (14), almost oversold as traders wait for new information.
The quotation still clings to the downward breach of the crucial support levels from October and September 2022, which are now resistant at 1.21 and 1.22, respectively, from the previous week.
The apparent U-turn from the two-month-old horizontal resistance region at 1.2450 also gives the Cable bears reason for optimism.
Consequently, the GBP/USD recovery is difficult to achieve until it breaks through the 1.2450 barriers, and the 1.2150 level is the next obstacle that intraday buyers must clear.
The May 2022 high at 1.2665 may entice the bulls if the Cable pair maintains its strength beyond 1.2450.
In contrast, the 1.2000 psychological support level is the bottom for the GBP/USD values before the 200-DMA support level of 1.1950.
The previous monthly low at 1.1840 and the peak in September near 1.1735 might then test the sellers of the pair before giving them the upper hand.
Please click here for the Market News Updates from 6 February, 2023.