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Market Overview
Macro & Geopolitics
On the last trading day of the week, markets' main focus is on the Fed's tighter monetary policy messaging, US Treasury yields, oil-driven inflation risk, and geopolitical developments.
In the Asian session, the Bank of Japan raised its policy rate as expected to 1.25%. However, the decision was made with two dissenting votes, and the messaging wasn't particularly aggressive, leading the yen to weaken. Globally, markets are also tracking the Fed, ECB, and BoE's messaging on inflation risks.
Today's Economic Calendar (GMT)
| Time | Ccy | Event | Fcst | Prev |
|---|---|---|---|---|
| 03:00 | JPY | BoJ Interest Rate Decision | 1.25% | 1.00% |
| 10:30 | EUR | ECB President Lagarde Speaks | — | — |
| 15:45 | USD | Fed's Schmid Speaks | — | — |
EUR/USD · FX Major
EUR/USD is showing an effort to recover following the dollar pressure that built after the Fed meeting. The Fed's tighter rate-policy messaging is supporting continued dollar strength, while the pullback in US Treasury yields is easing some of that pressure on the pair. Meanwhile, the impact of high energy prices on eurozone inflation remains important for ECB policy expectations.
The 1.1500 level stands out as a key resistance zone for the pair, while 1.1470 can be followed as the first strong support level on downside moves.
| Resistance | Support |
|---|---|
| 1.1500 | 1.1470 |
| 1.1520 | 1.1450 |
| 1.1550 | 1.1420 |
GBP/USD · FX Major
Dollar support following the Fed's rate hike is creating downward pressure on the pair, while the Bank of England's more cautious messaging on inflation risks is limiting losses for sterling. The BoE held its policy rate at 3.75% yesterday, with the decision passed 6-3 and three members calling for a 25bp hike, showing that the possibility of a rate increase ahead remains alive.
Should the pair extend its upward trajectory, 1.3390 stands out as a strong resistance level, while 1.3350 can be followed as the first key support zone on any downside moves.
| Resistance | Support |
|---|---|
| 1.3390 | 1.3350 |
| 1.3415 | 1.3335 |
| 1.3440 | 1.3300 |
XAU/USD · Metal
The recovery in gold prices is mainly built on the pullback in the US 10-year Treasury yield to around 4.94% and the decline in oil prices. Falling oil prices are easing inflation concerns somewhat, while the pullback in bond yields is also supporting gold's appeal. However, the continued possibility of another Fed rate hike this year following the latest increase stands out as the main risk to gold's rally.
Technically, 4380 and 4400 stand out as key resistance levels respectively, while 4350 and 4320 remain the support levels to watch on the downside.| Resistance | Support |
|---|---|
| 4380 | 4350 |
| 4400 | 4320 |
| 4420 | 4300 |
XAG/USD · Metal
A recovery trend stands out for XAG/USD on the last trading day of the week. Silver is in an uptrend as the pullback in the US 10-year Treasury yield and the decline in oil prices ease inflation concerns somewhat. That said, the Fed's hawkish policy stance remains the main factor limiting silver's rally.
Technically, $67 and $68 stand out as key resistance levels, while $65 and $64 remain the support levels to watch on the downside.
| Resistance | Support |
|---|---|
| $67 | $65 |
| $68 | $64 |
| $70 | $62 |
Brent Oil · Energy
Brent crude is trading around $104 on the last trading day of the week, with a pullback standing out for a third consecutive session. Saudi Arabia's efforts to bring part of the capacity of its damaged East-West pipeline back online, along with increased alternative shipments to Asia, have eased market concerns over supply disruptions somewhat — developments that are causing the risk premium on Brent to ease.
Technically, $107 and $109 stand out as key resistance levels, while $104 and $102 remain the support levels to watch on the downside.
| Resistance | Support |
|---|---|
| $107 | $104 |
| $109 | $102 |
| $112 | $100 |
Bitcoin · Crypto
The Fed's rate policy and global risk appetite remain the main focus for Bitcoin. The Fed raising rates by 25bp to 3.75-4.00% and most officials projecting at least one more hike this year is one of the key factors pressuring the crypto market. On the other hand, the US 10-year Treasury yield falling below 5% and Brent crude's pullback helped risk appetite recover, while the rally in US equity markets over the same period also supported a reduction in selling pressure on Bitcoin.
Technically, $78K stands out as a strong resistance level, while the $76K area can be followed as the first support zone on any potential pullback.
| Resistance | Support |
|---|---|
| 78K | 76K |
| 79K | 74K |
| 80K | 73K |
