Daily Market Report - Tuesday, Feb 21, 2023


Eurozone and Germany reported mixed PMI numbers during the European session with Eurozone Manufacturing PMI contracting to 48.5 in February from 48.8 in January and German manufacturing PMI falling to 46.5 in February of 2023 from 47.3 in January. Meanwhile, services PMI from both regions accelerate to an 8-Month High. On the other hand, the UK reported stronger-than-expected manufacturing and services PMI data. Moving ahead to the North American session, the US will release the latest manufacturing PMI data, to be published at 14:45 GMT.


European and UK shares opened lower while US stock futures extend the decline as investors across the globe remain concerned about the impact of aggressive monetary policy tightening on economic growth. During the previous session, the US markets were closed in connection with the celebration of President's Day.


Oil bears gained firmer control as crude prices struggled to regain strong upside momentum. The sentiment in the oil market has been fairly volatile as prices have been stuck in a range for the last couple of weeks. One of the key factors the oil traders should monitor this week is the weekly EIA and API crude inventory reports and FED minutes.


In the currency market, the New Zealand dollar remains under pressure ahead of the Reserve Bank of New Zealand’s policy decision, which is set to be announced on Wednesday early Morning. The central bank expected to slow down the interest rate hike after delivering a record 75 basis point increase in November. Meanwhile, the dollar index tracks the U.S. currency against six major peers back to above the 104 level. Fundamentally the greenback is expected to be extra volatile this week due to a busy economic calendar and all eyes remain on Wednesday's FOMC minutes.


The precious metal slipped again on Tuesday as the bulls still struggling to find upside momentum after the hawkish comments from the FED policymakers last week. The overall momentum is expected to be under pressure in the coming days due to the pressure from the strong dollar and expectations for more interest rate hikes by major central banks.

Economic Outlook

On the data front, the Reserve Bank of Australia released the last meeting minutes Tuesday Morning. The minutes showed the Board had also considered raising interest rates by 50 basis points, as it struggled to bring down inflation from overheated levels. “Members agreed that further increases in interest rates are likely to be needed over the months ahead to ensure that inflation returns to target and that the current period of high inflation is only temporary.” – the minutes said.

Moving ahead today, the important events to watch:

Canada – CPI: GMT – 13.30

Canada – Retail Sales: GMT – 13:30

US – Manufacturing PMI: GMT – 14:45

Coronavirus update:

Worldwide, more than 675 million people have been confirmed infected and more than 6.8 million have died. The United States has confirmed over 104 million cases and has had more than 1.14 million deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

For today, the key support level is located at 1.0610. In case the pair breaks below this level, it will head towards the next support level which is located at near 1.0580/70. On the upside, the key resistance is located for the pair above 1.0700.

The important levels to watch for today: Support- 1.0610 and 1.0580 Resistance- 1.0670 and 1.0700.

GOLD: Technically the overall momentum remains bearish. On the downside, $1818 is the crucial support area to watch. If the metal breaks below this area, the slump will quickly extend toward the $1810/00 mark. On the flip side, $1843/48 will act as key resistance, and a break above this level could open up a buying trend until $1855/60.

The important levels to watch for today: Support- 1826 and 1818 Resistance- 1840 and 1848.

Quote of the day - “The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behaviour.” – Brett Steenbarger.
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