1. Forex Market Insight
After the release of the U.S. inflation data for January, the U.S. dollar was first depressed and then rose. The euro edged up 0.1% against the dollar on the day to $1.0738, having touched a roughly two-week high of $1.0802 after the data was released.
The data showed that the U.S. Labor Department’s consumer price index rose 0.5% in January after increasing 0.1% in December. But in the 12 months to January, the CPI rose 6.4%, the smallest gain in about a year and a half, after rising 6.5% in December.
Still, the year-over-year CPI increase in January was higher than the market forecast of 6.2%. The inflation data clearly shows that the market is overly optimistic that inflation will fall enough this year for the Fed to start cutting interest rates. For this reason, the data could not prompt the dollar to get strong again, but it was not enough to push it lower either.
Within the same day, Eurostat released data showing that the Eurozone’s fourth-quarter GDP came in at a preliminary 1.9% year-over-year, compared to a forecast of 1.9% and a previous value of 1.9%, which was the smallest increase since the first quarter of 2021.
This data proves once again that the eurozone economy did show some growth in the fourth quarter of last year.
(EUR/USD 1-hour Chart)
We focus on the 1.0729 line today. If the EUR runs below the 1.0729 line, then pay attention to the support strength of the two positions of 1.0642 and 1.0529. If the strength of EUR rises over the 1.0729 line, then pay attention to the suppression strength of the two positions of 1.0776 and 1.0802.
GBP Intraday Trend Analysis
The UK Statistics Authority reported on Tuesday, 14th February 2023, that wages, excluding bonuses, rose 6.7%, higher than the 6.5% rise expected by analysts in a Reuters poll, the fastest rate of growth since records began in 2001, except for the period when the epidemic distorted data.
There are signs that price and pay rises are becoming entrenched, which will add pressure on the Bank of England to continue raising interest rates, which usually boosts the pound.
(GBP/USD 1-hour Chart)
GBP is mainly focused on the 1.2117-line today. If GBP runs below the 1.2117-line, it will pay attention to the suppression strength of the two positions of 1.2010 and 1.902. If GBP runs above the 1.2117-line, then pay attention to the suppression strength of the two positions of 1.2261 and 1.2311.
2. Precious Metals Market Insight
Gold prices gave back gains accumulated on Tuesday, 14th February 2023, due to dollar weakness and were little changed at the close as Fed officials remained hawkish on rate hikes, with Richmond Fed President Balkin and Dallas Fed President Logan both saying after the CPI data release that the Fed will need to focus on bringing inflation down to its 2% target.
The Fed is expected to raise its policy rate at least two more times to a range of 5%-5.25%, and financial markets still expect a 50% chance of a further 25 basis point rate hike in the summer. The indicator 10-year U.S. bond yields rose, putting pressure on gold.
(Gold 1-hour Chart)
Gold pays attention to the 1868-line today. If the gold price runs below the 1868-line, then it will pay attention to the support strength of the 1847 and 1832 positions. If the gold price breaks above the 1866-line, then pay attention to the suppression strength of the two positions of 1880 and 1892.
3. Commodities Market Insight
WTI Crude Oil
Oil prices ended more than 1% lower on Tuesday, 14th February 2023, after the United States said it would boost supply to the market by releasing more crude from the Strategic Petroleum Reserve (SPR).
The U.S. Department of Energy said on Monday it would sell 26 million barrels of oil from the SPR, which is already at its lowest level since 1983.
The Organization of the Petroleum Exporting Countries (OPEC) raised its forecast for global oil demand growth in 2023 for the first time in months, citing easing of coronavirus restrictions in China and a slightly stronger global economic outlook.
That also pared losses in oil prices. Supply concerns were also eased, the U.S. Energy Information Administration (EIA) said on Monday it expected record output in March from seven of the largest U.S. shale basins.
(Crude Oil 1-hour Chart)
Oil prices focus on the 78.93 – line today. If the oil price runs above the 78.93 -line, then focus on the suppression strength of the two positions of 80.13 and 8131.28. If the oil price runs below the 78.83 -line, then pay attention to the support strength of the two positions of 78.14 and 77.31.
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