Daily Market Report - Thursday, Jan 26, 2023


The king dollar reached a 2-decade high in September 2022 but since then, the US dollar has lost over almost 6% of its value on shifting expectations for US monetary policy. The falling value of the US dollar supported other currency pairs and precious metal to regain bullish momentum.

The next two days are expected to be an incredibly busy trading session for USD as the US will release the latest durable goods orders and GDP data on Thursday followed by US Personal Consumption Expenditures (PCE) Price Index data on Friday. The gross domestic product growth for the final quarter of 2022 is expected to come while the Durable goods orders are forecast to rise by 2.5% in December.


US stock futures traded higher during the early European session on Thursday after the EV maker Tesla reported better-than-expected profits in the latest quarter. "Pretty difficult recession this year," but demand for Tesla vehicles "will be good despite probably a contraction in the automotive market as a whole", - Tesla CEO Elon Musk said.


Crude oil futures recovered and ended slightly higher on Wednesday after data showed a lower-than-expected draw in U.S. crude stockpiles. U.S. Energy Information Administration (EIA) data showed a 533,000-barrel increase last week despite forecasts for a 1-million-barrel gain.


In the currency market, Euro remains one of the strongest currency pairs of this month as investors continue to price in another two consecutive 50 bps interest rate hikes by the European Central Bank (ECB). Meanwhile, the GBPUSD remains reasonably supported near 1.2300- helped largely by the dollar's soft performance across the board.


The precious metal extends gains on a weaker dollar. The strong upside momentum is driven by the hope that the Federal Reserve (Fed) will announce a smaller increase in interest rates at its meeting in February. For today, the main drivers for the precious metal remain the movement of the US dollar and US GDP data.

Economic Outlook

On the data front, the Bank of Canada (BoC) raised interest rates by another 25 basis points (bps) on Wednesday and signal that it would likely stop raising interest rates. The effects of higher interest rates are expected to bring CPI inflation down to around 3% in the middle of this year – the central bank said.

Moving ahead today, the important events to watch:

Canada – Durable goods orders: GMT – 13.30

US – GDP: 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 immediate support for the Euro stands near the level of 1.0850. On the flip side, the first resistance at 1.0930 any break above this level will open 1.0960/70 minimum.

The important levels to watch for today: Support- 1.0870 and 1.0850 Resistance- 1.0930 and 1.0960.

GOLD: Technically, the medium-term trend remains supportive while If the US dollar regains upside strength this week we could see a pullback in the precious metals. For this week, the first nearest support level is located at 1930. If it breaks below this level, it will head towards the next support level, located near 1925 then 1918. On the flip side, the first immediate resistance level for the metal is 1942, then the stronger resistance is 1950/55.

The important levels to watch for today: Support- 1930 and 1918 Resistance- 1940 and 1955.

Quote of the day - “Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.” – Fred Schwed.
Read more - https://gulfbrokers.com/en/daily-market-report-606