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Swiss franc falls despite SNB Jordan's hawkish messageThe Swiss franc has fallen considerably on Thursday. In the North American session, USD/CHF is trading at 0.8950, up 0.59% on the day. Swiss National Bank President Jordan reiterated a hawkish message on Wednesday that he sent out a week ago. Jordan said that he could not rule out further rate hikes, noting that current monetary policy was not restrictive enough. In other words, the SNB is unhappy with inflation levels, which although relatively low at 2.6%, have been above the Bank's target of 0-2% since February 2022. Inflation fell from 2.9% to 2.6% in April, and there is one final inflation report before the SNB's next meeting on June 22nd. The SNB has not shied away from being aggressive and delivering oversize hikes as high as 0.75% in the current rate-hike cycle, and we could see another hike if inflation doesn't fall close to 2.0% in the next release. The Swiss franc continues to appreciate, much to the consternation of SNB policymakers, as a stronger Swissy makes exports more expensive. The Swiss franc has soared about 500 points since March 1st and Jordan made sure to remind his listeners that the central bank was prepared to intervene in the forex markets if necessary. In the US, unemployment claims surprised to the upside, rising to 264,000, up from 245,000 and higher than the consensus estimate of 242,000. This was the highest total since January 2022, and although it's just one report, it will likely raise speculation that the labour market is showing cracks. On the inflation front, the Producers Price Index, taking the lead from CPI, softened in April. The headline reading fell from 2.7% to 2.3% (2.4% est). The core rate dropped from 3.4% to 3.2% (3.3% est). USD/CHF has pushed past resistance at 0.8907.  The next resistance line is 0.8994 0.8819 and 0.8732 are providing support
by OANDA
USD/JPY - Yen eyes Tokyo CPI, US GDPUSD/JPY is trading quietly at 133.84, up 0.13% on the day. The yen's lack of movement could change today with a host of key releases. Japan will release Tokyo Core CPI, while the US publishes Preliminary GDP for the first quarter and unemployment claims. Japan releases Tokyo Core CPI for April early on Friday, which is expected to remain steady at 3.2%. Will BoJ meeting bring more of the same? Japan's inflation is running around 3%, a dream for most central banks but a headache for the Bank of Japan. There has been pressure on the BoJ to tighten policy as inflation remains above the target of 2%. Japan has experienced decades of deflation and the massive stimulus programme was meant to stimulate the economy. Inflation has moved higher, but former BoJ Governor Kuroda insisted that the central bank would not consider tightening until it was convinced that inflation was sustainable, which required stronger wage growth. New BoJ Governor Ueda has toed the party line so far, but left open the possibility of tightening if wage growth and inflation climb faster than expected. All signs point to the BoJ maintaining its policy settings when it wraps up its 2-day meeting on Friday, but the central bank has surprised the markets in a big way before, and the markets will be following the meeting closely. In the US, unemployment claims have moved higher for four straight weeks and come in above the estimate each time. The upward trend is expected to continue, with claims expected to rise to 248,000, up from 245,000. The labor market remains strong, but the upswing could signal cracks in what has been a robust US labour market. Preliminary GDP for the fourth quarter is expected to drop to 2.0% y/y, down from 2.6% in Q4. USD/JPY tested support at 133.41 earlier in the day. The next support line is 132.69 134.27 and 134.99 are the next resistance lines
by OANDA
XAUUSD Technical Analysis 23.03.2023 1h chart– Previous Daily candle closed Bullish at 1970.100 forming new Daily Support at 1940.600. – Buys on close above 1974.500 targeting 4h Resistance at 1981.500, Leaving Runners to the Daily Resistance formed at 1988.500. – Sells on close below 1961.000 targeting 1h previous Resistance formed at 1953.500, Leaving Runners to the 1h Support at 1946.200. – We have High Impact News data ahead on the New York session with Unemployment Claims and New Home Sales
OANDA:XAUUSD
by SalimFX20
EUR/USD at 3-week low after strong US dataThe euro is down for a third straight day and fell earlier to 1.0629, its lowest level since Jan. 23. In the European session, EUR/USD is trading at 1.0639, down 0.30%. The US dollar is showing some strength this week against the majors, as US data continues to shine. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Is the disinflation process stalled? The markets didn't expect such good numbers, but the economy has proved to be surprisingly resilient to rising interest rates. The Fed has been preaching 'higher for longer' for some time, but the markets stuck to their dovish stance, expecting that the Fed would have to pivot and even cut rates later in the year. The host of strong US numbers has forced investors to recalibrate, and the markets have revised upwards their peak rate forecast to above 5%. The US dollar has been the big winner of the shift in market thinking, and US Treasury yields are at their highest level this year. Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn't falling quickly enough. Mester said that she didn't see inflation falling to 2% until 2025, which points to a long disinflation process. The ECB raised rates by 50 basis points in February and has signalled that it will do the same at the Mar. 16 meeting. The main financing rate is currently at 3%, well below the Fed (4.5%) and other major central banks. It's not clear what the Bank has planned after the first quarter, but with inflation running at 8.5%, the risk for further rate hikes is skewed to the upside. The ECB has made it clear that rates will remain high until there is evidence that inflation is falling toward the target, which means that the current rate-tightening cycle isn't anywhere near its end. EUR/USD is testing support at 1.0629. Below, there is support at 1.0581 1.0762 and 1.0847 are the next resistance lines
by OANDA
1
Euro higher as US jobless claims riseWe're seeing limited movement in the currency markets this week, which is not uncommon during the week between Christmas and New Year's. Trading volume remains thin and the data calendar is very light. In the North American session, EUR/USD is trading at 1.0649, up 0.35%. The US released unemployment claims today, one of the highlights in a quiet week. Initial jobless claims climbed as expected to 225,000, up from 216,000. A rise in week-to-week claims should not alarm investors, as there is bound to be some fluctuation in the releases. The 4-week moving average, which smooths out these fluctuations, remained virtually unchanged at 221,000. There are no tier-1 releases out of Germany or the eurozone this week. On Friday, Spain releases CPI for December, and inflation in the eurozone's fourth-largest economy could signal what to expect from next week's German and eurozone inflation releases. Inflation in Spain has been steadily dropping, from a peak of 10.8% in July to 6.8% in November. The downtrend is expected to continue in December, with a consensus of 6.1%. The ECB has sent out hawkish messages lately, with Vice-President Luis de Guindos saying last week that "Increases of 50 basis points may become the new norm in the near term." De Guindos added that the ECB was concerned that the markets might underestimate the persistence of inflation. Fed Chair Jerome Powell would wholeheartedly agree, as the Fed has found it tough going to convince the markets that it remains hawkish and plans to continue raising rates into 2023. The markets jumped on a couple of soft US inflation reports as an indication that the Fed would pivot and become dovish, sending the US dollar sharply lower. It was only after a hawkish Fed meeting earlier this month that the markets seemed to get Powell's message. Still, the Fed remains concerned that such speculation could loosen market conditions and complicate the Fed's painstaking battle to curb inflation. EUR is testing resistance at 1.0660. Above, there is resistance at 1.0746 1.0574 and 1.0488 are providing support
by OANDA
AUD/USD falls on strong US jobs dataThe Australian dollar is in negative territory today. In the North American session, AUD/USD is trading at 0.6739. down 0.43%. US unemployment claims fell to a 3-month low, another indication that the US job market remains robust. Initial unemployment claims fell to 222 thousand, down from 228 thousand and well below the estimate of 240 thousand. This is the fourth straight week that claims have fallen, and the release comes after a nonfarm payroll gain of 315 thousand, which was slightly stronger than expected. For the Federal Reserve, strong employment data is crucial, as a resilient labour market means that the Fed can continue to raise rates aggressively. Economic growth contracted in the first and second quarters, but strong job numbers are an indication that the economy is not in recession. RBA Governor Lowe said on Thursday that the RBA would need to raise interest rates at least twice more to contain the "scourge" of inflation. Lowe admitted that the pace of inflation had surprised the RBA and other central banks. Lowe pointed a finger at the Ukraine war, blaming higher energy prices as one of the drivers of higher inflation in Australia. The cash rate is currently at 2.35% and Lowe said that the pace and extent of rate hikes would be data-dependent. As the cash rate moves higher, there is a stronger likelihood of the RBA easing up, which means that October can be expected to bring a rate hike of 0.25% or 0.50%. The terminal rate should peak early in 2023, at around 3.35%. AUD/USD is testing support at 0.6737. Below, there is support at 0.6661 There is resistance at 0.6737 and 0.6846
by OANDA
1
Pound unchanged, US inflation aheadGBP/USD is drifting today, with a very light economic calendar. There are no UK releases and the only important release out of the US was unemployment claims, which rose from 202 thousand to 229 thousand (210 exp.). Investors didn't pay much attention to the release, ahead of the US inflation report on Friday. Headline CPI is expected to remain unchanged at 8.3%, while core CPI is forecast to fall to 5.9%, down from 6.2%. As has been the case with recent US inflation reports, the markets will be anxiously waiting for the Federal Reserve's reaction. The Fed is in the midst of an aggressive rate-tightening campaign, and if inflation shows a drop in tomorrow's report, I wouldn't be surprised to see headlines trumpeting the arrival of an inflation peak, although such a sweeping conclusion after just one release is certainly premature. The US dollar has been in choppy waters for much of the week, and the huge anticipation ahead of the inflation report could shake up the currency and make for a busy end to the week. The CPI release should result in a binary outcome - if inflation outperforms, it will put pressure on the Fed to tighten even further, which is bullish for the US dollar. Conversely, a weaker than expected reading will ease pressure on the Fed and the US dollar could lose ground. The OECD had some grim news about global growth earlier this week, with a particularly pessimistic forecast for the UK. Global growth is expected to fall to 3 per cent, down from 4.5% in the December projection. The OECD said that the war in Ukraine and Covid lockdowns across China had "generated a new set of adverse shocks". As for the UK, the OECD predicted zero growth in 2023, the worst forecast for any of the 38 OECD members. GBP/USD is testing resistance at 1.2537. Above, there is resistance at 1.2614 There is support at 1.2413 and 1.2336
by OANDA
Japanese yen rises on Ukraine fearsThe Japanese yen has moved higher on Thursday, as tensions are once again rising over the Ukraine crisis. Invasions fears have ratcheted upwards after NATO warned that Russia could use a border skirmish as a pretext for a full-scale invasion of Ukraine. The US has rejected Moscow's claim that it is reducing its military presence on the border and Russia expelled a senior US diplomat from Moscow earlier in the day. There were hopes that the crisis was easing, but the latest moves indicate that it is far from over. With the rising tensions, risk sentiment has fallen and the safe-haven Japanese yen has posted strong gains against the US dollar and the euro. After a stellar retail sales report on Wednesday, today's US data has been softer than expected, which has also weighed on USD/JPY. Unemployment claims rose to 248 thousand, a three-week high, while housing starts and the Philly Fed Manufacturing Index slowed in January and fell short of their estimates. There are no US economic releases on Friday, but we will hear from three FOMC members, which may provide some insight on the Fed's plans after the March rate lift-off. The FOMC minutes was a sleeper for the markets, as the release ended up more of a reminder that big things are coming from the Fed, which we all know. Officials discussed the need to raise rates, strongly hinting that lift-off will take place in March. As well, the Fed plans a significant reduction in the balance sheet, which has ballooned to nine trillion dollars as a result of aggressive bond-buying in an effort to stimulate growth during the Covid pandemic. The Fed will end its QE programme in March as scheduled, although some members at the Fed meeting wanted to wind up the program earlier. 114.79 is under strong pressure in support. Below, there is support at 114.15 There is resistance at 116.21 and 116.99 A major Fibo level is close by at 114.90 (50% of the 113.47-16.34 climb)
by OANDA