Tuesday, January 31, 2023
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Market Comment
Market Wrap: Stocks, Bonds, Commodities

On Monday, U.S. stocks closed lower, as investors awaited the upcoming rate decision by the Federal Reserve and earnings reports by big tech firms. The Dow Jones Industrial Average fell 260 points (-0.77%) to 33,717, the S&P 500 dropped 52 points (-1.29%) to 4,017, and the Nasdaq 100 slid 254 points (-2.09%) to 11,912.

The U.S. 10-year Treasury yield increased 3.9 basis points to 3.542%.

Automobiles (-5.48%), semiconductors (-3.04%), and energy (-2.29%) sectors led the market lower.

Ford Motor (F) fell 2.86%. The giant car-maker announced plans to slash prices of its electric vehicle Mustang Mach-E.

Tesla (TSLA) slid 6.32%, and General Motors (GM) dropped 4.37%.

Nvidia (NVDA) sank 5.91% on reports that the company's chief financial officer sold about 11,000 shares of the company.

Regarding U.S. economic data, the Dallas Fed manufacturing index improved to -8.4 in January (vs -11.0 expected).

European stocks closed mixed. The DAX 40 rose 0.16%, the FTSE 100 gained 0.25%, while the CAC 40 dropped 0.16%.

U.S. WTI crude futures fell $2.00 to $77.71 a barrel.

Gold price retreated $5 to $1,922 an ounce.


Market Wrap: Forex

The U.S. dollar strengthened against other major currencies, as it was widely expected the Fed will raise interest rates by 25 basis points Thursday. The dollar index rebounded to 102.26.

EUR/USD lost 20 pips to 1.0848. Germany's data showed that gross domestic product fell 0.2% on quarter in the fourth quarter (vs +0.0% expected, +0.5% in the third quarter).

USD/JPY jumped 55 pips to 130.43.

GBP/USD dipped 34 pips to 1.2348.

AUD/USD fell 41 pips to 0.7059.

USD/CHF added 42 pips to 0.9252, and USD/CAD jumped 74 pips to 1.3385.

Bitcoin sank back to $22,770.


Morning Trading

In Asian trading hours, USD/JPY eased to 130.18. This morning, Japan's data showed that its jobless rate remained stable at 2.5% in December (as expected). Retail sales grew 1.1% on month (vs +0.6% expected), while industrial production dipped 0.1% on month (vs -1.3% expected) in December.

AUD/USD dropped to 0.7045. This morning, Australia's data showed that retail sales dropped 3.9% on month in December (vs -0.4% expected). Meanwhile, China's official manufacturing purchasing managers index rose to 50.1 in January from 47.0 in December, above 49.5 expected, and non-manufacturing purchasing managers index bounced to 54.4 from 41.6, above 47.3 estimated.

Meanwhile, EUR/USD was little changed at 1.0850 while GBP/USD edged up to 1.2360.

Gold rebounded to $1,925.

Bitcoin was broadly flat at $22,865.


Expected Today

The eurozone's fourth quarter gross domestic product is expected to be up 1.6% on year,

Germany's January jobless rate is anticipated to be stable at 5.5%, while December retail sales are expected to grow 0.4% on month.

France's fourth quarter gross domestic product is expected to be up 0.4% on year, while January consumer price index is estimated to increase by 6.1% on year.

U.K. December mortgage approvals is expected at 45,000.

In the U.S., January Conference Board consumer price index is estimated at 109.0 and Chicago purchasing managers index is expected at 43.0. Meanwhile November FHFA house price index is anticipated to drop 0.4% on month and S&P Case-Shiller home price index is estimated to be down 1.0%.
Calendar
06:30 FR 4Q P GDP (QoQ) exp: NA prev: 0.2%
06:30 FR DEC Households Consumption (MoM) exp: NA prev: 0.5%
07:45 FR DEC Producer Price Index (MoM) exp: NA prev: 1.2%
07:45 FR JAN P Consumer Price Index (MoM) exp: NA prev: -0.1%
07:45 FR JAN P CPI - EU Harmonised (MoM) exp: NA prev: -0.1%
08:55 GE JAN Unemployment Change (k) exp: NA prev: -13
08:55 GE JAN Unemployment Rate exp: NA prev: 5.5%
09:30 UK DEC M4 Money Supply (MoM) exp: NA prev: -1.6%
10:00 EC 4Q A Euro-Zone: GDP (QoQ) exp: NA prev: 0.3%
13:00 GE JAN P Consumer Price Index (MoM) exp: NA prev: -0.8%
13:00 GE JAN P CPI - EU Harmonised (MoM) exp: NA prev: -1.2%
14:45 US JAN Chicago Purchasing Manager Index exp: NA prev: 45.1
15:00 US JAN Consumer Confidence exp: 109.6 prev: 108.3
Forex Last %1D %YTD
EUR/USD 1.0828 -0.21 1.10
USD/JPY 130.35 -0.04 -0.60
GBP/USD 1.2318 -0.28 1.90
Commodities Last %1D %YTD
Gold 1,905.2700 -0.93 4.50
Silver 23.1380 -1.96 -3.40
Crude Oil 76.8000 -1.41 -4.50
EUR/USD intraday: the upside prevails as long as 1.0845 is support Next
Our pivot point is at 1.0845.

Our preference: the upside prevails as long as 1.0845 is support.

Alternative scenario: below 1.0845, expect 1.0817 and 1.0801.

Comment: the RSI is above its neutrality area at 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the price is above its 20 and 50 period moving average (respectively at 1.0844 and 1.0845).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
EUR/JPY intraday: the upside prevails as long as 140.93 is support Previous  | Next
Our pivot point stands at 140.93.

Our preference: the upside prevails as long as 140.93 is support.

Alternative scenario: below 140.93, expect 140.25 and 139.84.

Comment: the RSI is above its neutrality area at 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the price is above its 20 and 50 period moving average (respectively at 141.22 and 141.29).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
GBP/USD intraday: rebound Previous  | Next
Our pivot point stands at 1.2296.

Our preference: rebound.

Alternative scenario: the downside breakout of 1.2296 would call for 1.2257 and 1.2234.

Comment: the RSI is above 50. The MACD is above its signal line and negative. The MACD must break above its zero level to call for further upside. Moreover, the price is trading above its 20 period moving average (1.2316) but under its 50 period moving average (1.2335).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
GBP/JPY intraday: rebound Previous  | Next
Our pivot point is at 159.81.

Our preference: rebound.

Alternative scenario: the downside breakout of 159.81 would call for 159 and 158.52.

Comment: the RSI is above 50. The MACD is negative and above its signal line. The MACD must break above its zero level to call for further upside. Moreover, the price stands above its 20 period moving average (160.39) but below its 50 period moving average (160.71).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
USD/JPY intraday: rebound towards 131.35 Previous  | Next
Our pivot point stands at 129.60.

Our preference: rebound towards 131.35.

Alternative scenario: below 129.60, expect 128.95 and 128.55.

Comment: the RSI is below its neutrality area at 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the price stands below its 20 and 50 period moving average (respectively at 130.22 and 130.28).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
USD/CAD intraday: the RSI is oversold Previous  | Next
Our pivot point stands at 1.3337.

Our preference: the downside prevails as long as 1.3337 is resistance.

Alternative scenario: the upside breakout of 1.3337, would call for 1.3371 and 1.3392.

Comment: the RSI is trading below 30. This could mean that either the pair is in a lasting downtrend or just oversold and that therefore a rebound could shape (look for bullish divergence in this case). The MACD is below its signal line and negative. The configuration is negative. Moreover, the price is trading under both its 20 and 50 period moving average (respectively at 1.3399 and 1.3397).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Crude Oil (WTI) (H3) Intraday: further advance. Previous  | Next
Pivot: 77.70

Our preference: long positions above 77.70 with targets at 79.75 & 80.50 in extension.

Alternative scenario: below 77.70 look for further downside with 76.60 & 75.60 as targets.

Comment: the next resistances are at 79.75 and then at 80.50.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Brent (ICE) (J3) Intraday: intraday support around 83.25. Previous  | Next
Pivot: 83.25

Our preference: long positions above 83.25 with targets at 85.50 & 86.50 in extension.

Alternative scenario: below 83.25 look for further downside with 82.50 & 81.50 as targets.

Comment: the next resistances are at 85.50 and then at 86.50.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Dow Jones (CME) (H3) Intraday: further advance. Previous  | Next
Pivot: 33720.00

Our preference: long positions above 33720.00 with targets at 33950.00 & 34120.00 in extension.

Alternative scenario: below 33720.00 look for further downside with 33630.00 & 33450.00 as targets.

Comment: the RSI is above its neutrality area at 50%.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Gold Intraday: the bias remains bullish. Previous 
Pivot: 1920.00

Our preference: long positions above 1920.00 with targets at 1935.00 & 1942.00 in extension.

Alternative scenario: below 1920.00 look for further downside with 1911.00 & 1900.00 as targets.

Comment: the RSI is bullish and calls for further upside.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced

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