Daily Market Report - Wednesday, Jan 04, 2023


The king dollar is continuing its struggle to rise. The dollar index, which tracks the currency against key rivals rose to a high of 104.85 on Tuesday but failed to extend the gains. As of this writing, the DXY trades below 103.90. Moving ahead to the North American session, dollar Investors and traders should closely monitor the release of the minutes of the US Federal Reserve’s December meeting, which will give traders a lot of hints about where monetary policy is headed this year.

Technically the overall momentum remains bearish after the currency pair experienced a sharp slide in the last couple of weeks. However, the greenback can rise if it rebounds back to above the 104.80 level again, any break and closes above this level the next upside levels to watch are 105.40 and 105.80. Nevertheless, if it continues the bearish momentum, the slump will quickly extend toward the 103.40 and 103 marks.


European shares traded higher on Wednesday boosted by the recent batch of upbeat economic data from the Eurozone and Germany. The latest economic data showed that Services activity dropped at a slower rate in Germany and Eurozone during December. Meanwhile, US stock futures trading in a narrow range as traders and investors are waiting for fresh triggers from FOMC meeting minutes.


Crude oil futures extended the losses on Wednesday morning as recession fears and a flare-up in COVID-19 cases in China raised concerns over global demand. Moving ahead, the Fed meeting minutes, and weekly crude inventory data will be key to deciding the further price movement for oil prices.


In the currency market, the EURUSD rebounded back to above 1.0600 as investors welcomed a better-than-anticipated reading on the service sector and the currency pair received additional buying pressure after the bullish comments from the ECB policymakers. However, the US dollar movement will continue to play a vital role in this currency pair's future direction.


The precious metal slightly reversed from the daily highs ahead of US ISM Manufacturing PMI data, which is set to be released later today. On the other hand, gold traders should also closely monitor the December FOMC meeting minutes because gold is highly sensitive to rising interest rates since higher rates dent gold's appeal as they increase the opportunity cost of holding non-yielding bullion.

Economic Outlook

On the data front, German inflation falls more sharply than expected. The first estimate of German headline inflation came in at 8.6% year-on-year in December, down from 10% in November.

Moving ahead today, the important events to watch:

US – ISM manufacturing PMI: GMT – 15.00

US – JOLTS jobs openings: GMT – 15.00

US – FOMC meeting minutes: GMT – 19:00

Coronavirus update:

Worldwide, more than 665 million people have been confirmed infected and more than 6.69 million have died. The United States has confirmed over 102 million cases and has had more than 1.11 million deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

The currency pair rebounded back to above 1.0630 during the European session. For today, the first resistance is located for the pair at around 1.0650, a break above this level will confirm a possible move to 1.0680/1.07. On the downside, any meaningful pullback now seems to find some support near the 1.0570/50 zones, below which the slide could further get extended towards the 1.0510/00 region.

The important levels to watch for today: Support- 1.0570 and 1.0550 Resistance- 1.0650 and 1.0680.

GOLD: Technically If the bullish momentum continues then the next upside level is to watch 1865 and 1872. On the flip side, a breakdown through 1840 would negate that bias and suggest a test of the 1830 and 1818 support regions.

The important levels to watch for today: Support- 1852 and 1840 Resistance- 1865 and 1872.

Quote of the day - “When it comes to investing, we want our money to grow with the highest rates of return, and the lowest risk possible. While there are no shortcuts to getting rich, there are smart ways to go about it.” – Phil Town.

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