Daily Market Report - Friday, Jan 27, 2023


Wall Street's main indexes ended in positive territory on Thursday supported by better-than-expected fourth-quarter US GDP numbers and jobless claims data. The GDP data showed US gross domestic product grew at a better-than-expected 2.9% annual rate in the final quarter of 2022, stronger than the consensus forecast for 2.5% growth.

Moving ahead, the focus shifted to key US personal consumption expenditures (PCE) data which is set to be released later today. PCE index, which measures inflation, the PCE inflation data would provide clues on how aggressive the Federal Reserve's monetary tightening could be in next week's FOMC meeting. Investors and traders hoping for PCE data signalling that the Fed might avoid more rate hikes that might go too far in slowing the economy and bringing on a recession.


European stocks traded mixed on Tuesday as investors looked towards the release of the U.S Core PCE Price Index - the Fed's preferred inflation gauge data and comments from ECB president Christine Lagarde. On the other hand, Asian shares edge higher after Wall Street benchmarks ended on Thursday on a high note.


Crude oil futures trade near the weekly highs, the upside momentum boosted by the weaker dollar and amid hopes of continued demand recovery in top crude importer China. The latest reports say that the number of Covid-related deaths and severe cases in China is now 70% lower than peak levels in early January.


In the currency market, the US dollar, which is also often seen as the ultimate safe-haven currency slightly rebounded from the 8-month lows. Meanwhile, the euro regained momentum against the greenback and British pound during the early European session ahead of European Central Bank (ECB) President Christine Lagarde's speech.


The precious metal struggling to regain upside momentum following the release of stronger-than-expected US economic data. However, the overall sentiment remains bullish as investors and market participants expect that the robust US GDP data supports the argument that the Fed could still deliver a soft landing.

Economic Outlook

On the data front, Initial jobless claims in the United States fell last week, according to a report from the Labor Department. The number of claims dropped from 6,000 to a seasonally adjusted 186,000. Durable goods orders for December also impressed with a 5.6% gain, more than double expectations.

Moving ahead today, the important events to watch:

Canada – PCE inflation data: GMT – 13.30

US – Michigan consumer sentiment: GMT – 13.30

Coronavirus update:

Worldwide, more than 672 million people have been confirmed infected and more than 6.74 million have died. The United States has confirmed over 103 million cases and has had more than 1.129 million deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

For today, the first nearest support level is located at 1.0850. In case it breaks below this level, it will head towards the next support level which is located near 1.0800. On the upper side, 1.0910 will act as an immediate and strong hurdle while 1.0940 will be a critical resistance zone.

The important levels to watch for today: Support- 1.0850 and 1.0800 Resistance- 1.0910 and 1.0940.

GOLD: Today as long as the metal trades above the 1920 level, the medium-term uptrend will remain in place. On the upper side, the first resistance is located around 1930/34, a break above this level will confirm a possible move to 1942 then 1948. On the downside, 1918 is the immediate support level, followed by 1910. Further selling pressure will intensify only if the metal break below 1910/08 levels.

The important levels to watch for today: Support- 1918 and 1910 Resistance- 1935 and 1948.

Quote of the day - “The majority of short-term trading results are just random. In the long term, the money ends up with those that can trade and manage risk.”
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