1. Forex Market Insight
The euro ended the day 0.74% lower against the dollar on Thursday 5th January 2023 at $1.0526, after falling as low as $1.0515, the lowest since Dec. 12.
Friday’s U.S. jobs and payrolls data for December is the main economic focus of the week, and investors are now judging how high the Federal Reserve may raise interest rates and how long they will stay there.
Before the data is released, the dollar is expected to continue to be able to maintain strength, which will cause further upward pressure on the euro.
(EUR/USD 1-hour Chart)
We focus on the 1.0529 line today. If the EUR runs below the 1.0529 line, then pay attention to the support strength of the two positions of 1.0440 and 1.0275. If the strength of EUR rises over the 1.0529 line, then pay attention to the suppression strength of the two positions of 1.0586 and 1.0642.
GBP Intraday Trend Analysis
The pound plunged 1.20% against the dollar again on Thursday, 5th January 2023 reaching an intraday low of 1.1873 before closing at 1.1910.
The final S&P Global/CIPS UK Services Purchasing Managers’ Index (PMI) for December was revised down to 49.9 from an initial reading of 50.0, indicating a very modest contraction in business activity.
Although an improvement over November’s 48.8, new business contracted for the second consecutive month and the employment sub-index in the survey fell to its lowest level since February 2021.
In addition, the U.K. is facing a wave of industrial action this winter, with strikes crippling several sectors, including the rail network. For this reason, the industry still maintains a heavy pessimism about the UK’s economic outlook.
(GBP/USD 1-hour Chart)
GBP is mainly focused on the 1.1902-line today. If GBP runs below the 1.1902-line, it will pay attention to the suppression strength of the two positions of 1.1762 and 1.1714. If GBP runs above the 1.2010-line, then pay attention to the suppression strength of the two positions of 1.2010 and 1.2111.
2. Precious Metals Market Insight
Gold prices fell on Thursday, 5th January 2023, following comments from Fed officials that inflation will fall in 2023, having fallen more than 1% earlier. Higher interest rates and a rising dollar tend to put pressure on non-yielding gold, which does not pay interest.
Initial jobless claims fell to a three-month low last week, while layoffs fell 43% in December, indicating a tight labor market. Economic forecasts released by the Fed staff at last month’s meeting suggest that the anti-inflationary action may last longer than expected.
(Gold 1-hour Chart)
Gold pays attention to the 1847-line today. If the gold price runs below the 1847-line, then it will pay attention to the support strength of the 1828 and 1820 positions. If the gold price breaks above the 1847-line, then pay attention to the suppression strength of the two positions of 1866 and 1876.
3. Commodities Market Insight
WTI Crude Oil
Oil prices rose about 1% Thursday, 5th January 2023 after posting their biggest two-day loss early in the year in three decades. U.S. data showing a decline in fuel inventories provided support, while economic concerns limited gains.
The sharp drop in the first two days was driven by concerns about a global recession, especially after short-term signs of economic weakness in the world’s two largest oil consumers.
(Crude Oil 1-hour Chart)
Oil prices focus on the 75.04- line today. If the oil price runs above the 75.04 -line, then focus on the suppression strength of the two positions of 76.07 and 76.94. If the oil price runs below the 75.04 -line, then pay attention to the support strength of the two positions of 73.52 and 72.77.
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