Daily Price Outlook

The EUR/USD currency pair is currently trading at $1.0590, showing an increase of 0.13% over the last 24 hours. The pair rose due to better-than-anticipated inflation data from France and Spain, which raised expectations that the European Central Bank (ECB) would continue to increase interest rates.

France and Spain CPI Reports

On February 28, France and Spain released their inflation numbers, which exceeded the forecasted figures for February. The Consumer Price Index (CPI) readings were 7.2% and 6.1% in France and Spain, respectively. As a result, investors are now betting on the European Central Bank (ECB) to raise its interest rates to a maximum of 4%, due to these high inflation rates.

These higher inflation rates are likely to reinforce the views of ECB policymakers, who argue that more increases beyond the March rate hike are necessary to keep inflation under control. In addition, hawkish statements from ECB officials have further supported this rise. The ECB's Chief Economist, Philip Lane, has stated that the "case for a 50 basis point rate rise in March remains strong," reiterating the central bank's stance.

CB Consumer Confidence

On February 28, a report showed that the CB Consumer Confidence fell from 106 in January to 102.9 in February, which was lower than the expert forecast of 108.5. In addition, the Chicago PMI dropped from 44.3 in January to 43.6 in February, which was below the predicted mark of 45. It is now declining for the second month in a row.

These numbers were lower than what experts had predicted and indicate increased pressure from rising interest rates. As a result, traders are expecting the Federal Reserve to raise the federal funds rate from 525 bps to 550 bps.

The report on consumer confidence, which showed a drop to a three-month low in February, limited the USD's gain. The US Dollar Index is currently trading at 104.87.

EUR/USD Intraday Technical Levels

Support      Resistance

1.0553         1.0624

1.0528         1.0670

1.0482         1.0695

Pivot Point: 1.0599

EUR/USD – Technical Outlook

The EUR/USD pair encountered resistance near the 1.0650 level and subsequently experienced a clear downward bounce from there. The EMA50 served as a strong resistance barrier against the price, thereby maintaining the validity of the bearish trend scenario on an intraday basis. The next likely support is 1.0515, with subsequent support of 1.0440 in case of a break below the former level.

Therefore, further decline is expected in the upcoming sessions. The price needs to acquire additional negative momentum to surpass the first target and sustain the decline on a longer-term basis. It should be noted that breaching the 1.0650 level will lead to additional gains, with a potential target of 1.0745 before any new attempts at a decline.

Daily Price Outlook

The GBP/USD pair is currently trading at 1.2039, showing a 0.16% increase in the last 24 hours. According to a report released on February 28th, the Chicago Purchasing Managers' Index (PMI) fell from 44.3 in January to 43.6 in February, which is below the expected level of 45.

This marks the second consecutive month of decline. In addition, the Conference Board's Consumer Confidence Index dropped from 106 in January to 102.9 in February, falling short of the expert estimate of 108.5.

Exploring the Impact of Softer US Data on GBP/USD Exchange Rates

On February 28th, a report revealed that the Chicago Purchasing Managers' Index (PMI) fell from 44.3 in January to 43.6 in February, falling short of the expected level of 45 for the second consecutive month. Additionally, the Conference Board's Consumer Confidence Index dropped from 106 in January to 102.9 in February, failing to meet the expert estimate of 108.5.

These figures indicate increased pressure from rising interest rates. As a result, traders are anticipating a potential increase in the federal funds rate from 525 bps to 550 bps by the Federal Reserve. The upcoming release of February business activity numbers on March 1st and 3rd will be closely watched by investors. It is expected that the US manufacturing sector may continue to decrease, which would reverse the growth seen in the services industry.

Currently, the US Dollar Index is trading around a two-month high versus a basket of currencies at approximately 105.00.

An Overview of the UK Economy

The UK's positive financial performance has continued to support a progressive increase in sentiment, as seen in recent trends. Today, the final UK Manufacturing Purchasing Managers' Index (PMI) numbers for February will be released, followed by a speech from Bank of England (BoE) Governor Andrew Bailey, highlighting today's economic calendar for the GBP. The Composite PMI Index is expected to rise from 48.5 to 53.0 points this month, with a projection of 49.0.

Hawkish statements from BoE policymakers may potentially drive the currency higher, and the Pound may gain if Bailey signals that additional measures are required to bring inflation back within the BoE's target range. Conversely, if he expresses concerns about growth, it would dampen hopes for a BoE interest rate rise, weakening the pound.

Windsor Framework

The UK and EU have recently agreed on the 'Windsor Framework,' as announced by Prime Minister Rishi Sunak and President of the European Commission Ursula von der Leyen on February 27th. Sunak stated that the new Brexit agreement focuses on 'what is best for people in Northern Ireland,' rather than politicians.

This new agreement to resolve the conflict around the Northern Ireland protocol has contributed to the Pound's recent gains.

GBP/USD Intraday Technical Levels

Support      Resistance

1.1983         1.2114

1.1932         1.2194

1.1851         1.2245

Pivot Point: 1.2063

GBP/USD – Technical Outlook

On a technical front, the GBP/USD currency pair has gained immediate support at the 1.2015 level. The closing of candles above this level is driving a bullish bounce, which could potentially lead the GBP price toward an immediate resistance level of 1.2045.

This particular resistance level is driven by a double-top pattern that has extended even in the past. Breaking above the 1.2145 level could potentially send the GBP/USD price further upward.

Daily Price Outlook

The Nasdaq 100 (NDX) is currently trading at $12,057.79, representing a 0.74% increase in the past 24 hours. The rebound in the Nasdaq comes after durable goods orders dropped, which may have alleviated concerns of an overheating economy and a potential interest rate hike.

Durable Goods Orders Fall More Than Expected, US Dollar Falls from Multi-Week Highs

On February 27, a report revealed that new orders for manufactured durable goods in the US decreased by 4.5%, the biggest decline since April 2020, exceeding economists' expectations of a 4.0% drop. However, the National Association of Realtors index of pending home sales increased by 8.1% to 82.5 in January, surpassing the predicted 1.0% rise.

This indicated that the US housing market had stabilized due to falling mortgage interest rates. The US dollar fell from its multi-week highs following the unfavorable durable goods report. The US Dollar Index (DXY) found support at 104.65 after a significant loss, and the yield on the benchmark 10-year US Treasury note slightly decreased to 3.92%.

The NASDAQ rebounded as positive market sentiment and a sharp decline in headline durable goods orders alleviated some of the hawkish pressure on the Fed.

Tesla (TSLA) Rallies Ahead of Investor Day and Musk's Master Plan 3 Disclosures

Tesla (TSLA) is set to hold its Investor Day on March 1, during which CEO Elon Musk is expected to reveal insights about "Master Plan 3." In anticipation of the event, several traders have reportedly been buying up shares, leading to a 5.5% increase in Tesla's stock price. This rally has contributed to a more than 70% rise in Tesla's shares so far this year.

Additionally, the increase in Tesla's stock price has boosted Elon Musk's net worth, causing him to reclaim the title of the world's richest man after a brief period behind Bernard Arnault of France.

The positive momentum of TSLA's stock is also benefiting the broader stock market, as NASDAQ rises amid Tesla's surge.

NASDAQ Intraday Technical Levels

Support      Resistance

11908         12025

11846         12080

11790         12142

Pivot: 11963

NASDAQ – Technical Outlook

From a technical perspective, the NASDAQ has completed a 38.2% Fibonacci retracement and is now finding support at the $11,940 level. A close below this level could expose the NASDAQ price to the next support level at around $11,440.

Furthermore, on the 4-hour timeframe, the tech index Nasdaq has broken through an upward channel, which is also contributing to bearish sentiment in the market. On the upside, the NASDAQ may encounter an immediate resistance level at $12,250.

Daily Price Outlook

The USD/CAD pair is currently trading at 1.3573, exhibiting a 0.02% decline over the last 24 hours. The pair has been on a downward trajectory since January due to the weakening of the US dollar in the global market.

Signs of weakening US economy

On February 27, a report showed that Durable Goods Orders fell by 4.5% in January, instead of the expected increase of 3.7%. On the other hand, pending home sales improved by 8.1% to reach 82.5 in January, which was the second consecutive monthly increase.

Additionally, orders that excluded transportation goods increased by 0.7% in the reporting month, compared to the predicted increase of 0.1%.

Despite the positive news, the reported data failed to generate momentum, and the US dollar suffered a sharp loss from its multi-week highs. However, the US Dollar Index (DXY) managed to find support at 104.20.

All eyes on the upcoming Canadian GDP

On Tuesday, February 28th, Statistics Canada is set to release a report on the gross domestic product (GDP) for the fourth quarter. The report is expected to show a moderate increase of 1.5% (annualized) in output during Q4 of 2022.

The GDP figures are likely to have an impact on the Canadian Dollar. However, due to the Bank of Canada's decision to hold off on raising interest rates, the results may not have a significant impact on the USDCAD pair.

Oil prices are low

The increase in the US PCE Price Index has led to a decline in oil prices as investors fear that higher interest rates will limit demand. The oil market is expected to be volatile ahead of the release of the US American Petroleum Institute's (API) report on oil inventories for the week ending February 24.

US West Texas Intermediate (WTI) crude futures declined by 0.03% to reach $75.57 a barrel in the last 24 hours.

As the Canadian dollar is heavily influenced by the oil market, its value fluctuates in response to market sentiment and oil prices. Thus, the CAD is also declining due to the fall in crude oil prices.

USD/CAD Intraday Technical Levels

Support      Resistance

1.3531         1.3622

1.3488         1.3668

1.3441         1.3712

Pivot Point: 1.3578

USD/CAD – Technical Outlook

From a technical perspective, the USD/CAD pair is currently finding support at the $1.3530 level. If this level is breached, the pair could potentially test the $1.3450 support zone. The immediate support level for the USD/CAD pair is $1.3400.

On the other hand, resistance for the pair is located at the $1.3665 level, and a break above this level may expose the pair to the $1.3740 mark.

Daily Price Outlook

The price of gold (XAU/USD) is currently trading at $1,818.91, which is a slight increase of 0.09% over the last 24 hours. Despite experiencing a small recovery from its lowest point this year, the price of gold has remained within a narrow range.

Upcoming PMI Ahead

Gold investors are closely monitoring the latest data on durable goods, ISM Manufacturing PMI, and ISM Services PMI this week. As hawkish Fed concerns have eased, market sentiment has improved.

On February 27, durable goods orders fell by 4.5% in January, contrary to experts' predictions of a 3.7% increase, which weighed on the US Dollar. The US Dollar Index (DXY) is trading at 104.20 after suffering a significant loss, while the US 10-year Treasury rate fluctuates around 3.92%.

However, the precious metal may recover from its recent bearish performance as investors turn their attention to the United States ISM Manufacturing PMI (Feb) on Wednesday, March 1. Although the US Manufacturing PMI has declined for the past three consecutive months, the data may show a smaller contraction this time.

US-China Tensions Escalate Amid Disagreement at G20 Finance Ministers Meeting

The G20 finance ministers' meeting held in Bengaluru on February 25 failed to reach a consensus as China and Russia refused to sign a statement condemning Russia's invasion of Ukraine and denouncing the use of nuclear weapons.

As a result, the meeting concluded without a joint statement from the finance ministers and central bank governors of the member countries. Furthermore, the finance leaders of the world's major economies heavily criticized Russia for its war in Ukraine.

The tensions between the United States and China have increased as Beijing did not participate in the G20 meeting. In such circumstances, investors often turn to gold as a "safe haven" asset, leading to an increase in demand and price.

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1816            1832

1809            1841

1800            1848

Pivot Point: 1825

Gold (XAU/USD) – Technical Outlook

Gold prices are currently hovering around the $1,815 support zone, weighed down by the downward channel and descending triangle pattern visible on the 4-hour timeframe. In the event that the $1,820 double-bottom pattern is breached, the price of gold may be pressured to move down toward the $1,810 or $1,799 support zones.

Although the RSI and MACD indicators are still showing selling momentum, the MACD histograms have been decreasing in size, indicating a weakening selling bias. Moreover, the 50-day simple moving average is situated around the $1,830 level, potentially serving as a resistance barrier to any upward movement.

Daily Price Outlook

The AUD/USD pair is currently trading at 0.6728, representing a 0.04% increase in the last 24 hours. After reaching its lowest point in seven weeks, the pair has started to show signs of strength with an increase in bids.

Implications for the Australian Economy and AUD

On February 26, the Australian Bureau of Statistics published its report on Company Operating Earnings Q/Q. According to the report, the gross operating profits of companies increased by 10.6% seasonally adjusted, compared to the expected 1.8% increase.

This report is considered a reliable indicator of the economy's state, as companies are immediately impacted by market conditions, and changes in their earnings can serve as a forecast for future economic activities such as spending, hiring, and investment.

The unexpected increase in gross operating earnings of companies benefited the AUD, which saw gains in response.

US Dollar Index Impact on AUD/USD

The US Personal Consumption Expenditures received attention as the PCE Price Index rose to 5.4% YoY, while the Core PCE Price Index climbed to 4.7% YoY, higher than analysts' predictions and the previous year's figures. The Core PCE Price Index is the Fed's preferred inflation gauge and its increase supports the hawkish attitude of the minutes.

Despite recent gains, the US Dollar Index (DXY) is consolidating with marginal losses at 105.15. The DXY bulls acknowledged hawkish Fed bets and updated the multi-day high, but the lack of major data and events over the weekend triggered the latest price drop.

Upcoming Australian CPI report

Investors will closely monitor the release of the monthly retail sales figures, the primary indicator of consumer spending, on February 27. The data is crucial since consumer spending constitutes the majority of total economic activity. In addition, the market is also anticipating the release of the Current Account data, which has a direct impact on currency demand.

On February 28, the focus will be on the Australian Bureau of Statistics Consumer Price Index (CPI) figures, which reached an all-time high of 8.4% year-over-year last month, according to the data. The market expects this report to indicate a decline to 8.1%.

Moreover, the Reserve Bank of Australia (RBA) has not yet given any indication that it plans to pause its current run of rate hikes. However, the hawkish stance of the Australian central bank was not as robust as that of the Federal Reserve (Fed), which has dampened the growth of AUD.

Fundamentals in the Spotlight Today

The following economic data releases scheduled for today have the potential to significantly impact the pricing of US stock markets:

    * Core Durable Goods Orders m/m is expected to show a 0.1% increase.

    * Durable Goods Orders m/m may experience a 3.7% decrease.

    * Pending Home Sales m/m is anticipated to grow by 0.9%.

AUD/USD Price Chart - Source: Tradingview

AUD/USD Intraday Technical Levels

Support      Resistance

0.6726         0.6739

0.6719         0.6745

0.6712         0.6752

Pivot Point: 0.6732

AUD/USD – Technical Outlook

From a technical standpoint, the AUD/USD pair has broken below a symmetrical triangle pattern that previously provided support at the 0.6780 level. Currently, the pair is finding support at the $0.6700 mark, and a break below this level could expose the AUD to the $0.6650 level.

Both the RSI and MACD indicators support a downtrend as they are holding under 50 and 0, respectively. On the other hand, the AUD/USD's resistance levels are currently at $0.6745 or $0.6780.

Daily Price Outlook

The GBP/USD pair is currently trading at 1.1959, which reflects a 0.13% increase. The pair has recovered slightly after experiencing two weeks of consecutive drops and has now seen some modest gains during the intraday period, reaching a new high for the day.

MPC Member Broadbent to Speak

On Sunday, February 26, Dominic Raab, the UK's Deputy Prime Minister, expressed optimism about an agreement with the European Union to address post-Brexit trading rules applied to Northern Ireland. Raab stated that the nation "is on the cusp" of striking a new Brexit agreement with Northern Ireland, and negotiations with the EU have made excellent progress.

The optimistic sentiments surrounding the EU-UK Brexit deal on the NI protocol are incentivizing traders before the official announcement. GBP/USD is currently trading at 1.3869, up by 0.12%.

Traders are also awaiting today's speech by Ben Broadbent, the Deputy Governor of the Bank of England, for a clearer direction on GBP. Broadbent will provide the conference's opening comments at the BoE Agenda for Research in London.

UK Final Manufacturing PMI: What to Expect from the Upcoming Release

The market is anticipating that the Bank of England will raise the benchmark interest rate by 25 basis points twice in March and April, reaching a maximum of 4.5%. However, some members of the BoE leadership are concerned that a significant increase in rates could result in an economic slowdown.

Meanwhile, business activity data in the UK is showing bullish signs, with the Composite PMI Index potentially rising from 48.5 to 53.0 points this month, despite predictions of 49.0. It's worth noting that these are preliminary figures, and the final ones will be released on March 1 and 3.

How the Pound is Responding to a Weakening Dollar?

The headline PCE Price Index has increased to 5.4% YoY, causing significant attention to US Personal Consumption Expenditures (PCE). In addition, the more significant Core PCE Price Index, which is the Fed's preferred inflation indicator, has risen to 4.7% YoY from 4.6% the previous year and 4.3% to experts' expectations.

Despite this, the US Dollar Index (DXY) is holding onto slight losses at 105.15 as it consolidates its most recent gains. Furthermore, the United States 10-Year Bond Yield has also fallen around 0.39% in 24 hours, trading at 3.934.

The DXY bulls have acknowledged hawkish Fed bets while updating the multi-day high. However, the absence of significant data and events triggered the recent fall in the price.

Fundamentals in the Spotlight Today

These releases have the potential to significantly affect the pricing of US stock markets today.

    * Core Durable Goods Orders m/m is expected to show a 0.1% increase

    * Durable Goods Orders m/m may experience a 3.7% decrease

    * Pending Home Sales m/m is anticipated to grow by 0.9%.

GBP/USD Price Chart - Source: Tradingview

GBP/USD Intraday Technical Levels

Support      Resistance

1.1942        1.1962

1.1933        1.1973

1.1922        1.1982

Pivot Point: 1.1953

GBP/USD – Technical Outlook

On a technical level, the GBP/USD pair has broken below a symmetrical triangle pattern that was providing support around the $1.1995 level.

As a result of this breakout, the pair is now heading toward its next support level around $1.1920, which is acting as a double bottom support.

If the pair manages to find support at this level, it may rebound, and a break above $1.1920 could send the GBP/USD price toward the $1.1845 level.

Daily Price Outlook

The S&P500 stock market index is currently trading at $3,970.04, down 1.05% in the last 24 hours. Investors are becoming increasingly worried about the potential for aggressive interest rate hikes, which has contributed to the recent downward trend. Despite a series of positive economic data, the S&P 500 has experienced a 2.7% drop for the week.

Fed to Raise Interest Rates

Recent economic data has led to predictions that the Federal Reserve may need to keep interest rates higher for an extended period to achieve its 2 percent inflation target.

On February 24, the latest inflation measure, core monthly personal consumption expenditures, showed a higher-than-expected increase in prices, rising 0.6% month-on-month and 4.7% year-on-year. This news has caused American stocks to fall for three consecutive weeks, following a strong start to the year.

The S&P is also declining due to the Fed's indication that it may raise rates in the long term, with inflation being a primary concern.

Geopolitical Concerns and SPX: How Global Tensions Affect the S&P 500

The Chinese government proposed a 12-point plan aimed at ending the war between Ukraine and Russia. The plan includes a call for a ceasefire and a gradual de-escalation of the situation to pave the way for peace negotiations.

China's foreign ministry announced the proposal on February 24, which coincides with the one-year anniversary of Russia's invasion of Ukraine. The plan also includes lifting Western sanctions against Russia, creating humanitarian corridors to evacuate civilians, and ensuring grain exports after disruptions caused a surge in global food prices last year.

Despite the proposal, leaders from Germany and the European Union criticized China's plan, citing geopolitical concerns that had a negative impact on market sentiment. The S&P 500 also declined due to the rising geopolitical tensions.

Upcoming Corporate Earnings: What to Expect from Key Companies

Investors will be monitoring a range of economic data reports and corporate earnings in the upcoming week. Some notable companies scheduled to release their earnings this week include Target (NYSE:TGT), Costco (NASDAQ:COST), Lowe's (NYSE:LOW), and Macy's (NYSE:M).

In addition, the durable goods orders report is expected on February 27.

While only 6% of the S&P 500 will be reporting earnings, investors will be paying close attention to data from large retailers, which will provide important insights into the state of consumer spending and the impact of inflation on businesses and consumers.

S&P500 Intraday Technical Levels

Support      Resistance

3978.24       4037.35

3944.16      4062.38

3919.13      4096.46

Pivot Point: 4003.27

S&P500 – Technical Outlook

Technically speaking, the S&P 500 (SPX) is in a bearish trading pattern and has fallen to $3,990. It recently broke an upward channel at $4,100, which has contributed to the current downtrend.

The SPX's current support level is at $3,950, backed by a double-bottom pattern. However, if the support level is breached, the S&P 500 may decline further, possibly to $3,885.

On the flip side, the S&P 500's resistance level stands at $4,000 or $4,075. Today's release of the US Preliminary GDP is highly anticipated and could significantly impact the pricing of the US stock markets.

At 1:30 pm, the release of USD Core Durable Goods Orders m/m is expected to show a 0.1% increase, while USD Durable Goods Orders m/m may experience a 3.7% decrease. At 3:00 pm, USD Pending Home Sales m/m is anticipated to grow by 0.9%. These releases have the potential to significantly affect the pricing of US stock markets today.

Daily Price Outlook

The XAU/USD is currently trading at $1,826.68, reflecting a 0.24% increase over the past 24 hours. Although gold prices saw a slight gain, they were on track to close the week with losses for the fourth consecutive week due to the persistent uncertainty surrounding US monetary policy.

US Preliminary GDP Figures and Their Impact on Gold Prices

On February 23, the US Bureau of Economic Analysis (BEA) released the second estimate, revealing that the actual Gross Domestic Product (GDP) of the US increased at an annualized rate of 2.7% in the fourth quarter, falling below both the market forecast of 2.9% and the initial estimate.

As a result, the US Dollar Index (DXY) experienced a slight decrease, trading at 104.53, down 0.07% in 24 hours. However, gold prices showed some recovery as US fourth-quarter GDP numbers were revised downward.

Softer US Treasury Bond Yields: What It Means for Gold

Over the past three days, US benchmark Treasury bond yields have been falling, despite ongoing concerns about a recession and rising Federal Reserve (Fed) rates. The rates on 10-year Treasury bonds (US10Y) have decreased by almost 3.87%.

The recent drop in the US Treasury bond yield is due to the lack of additional evidence supporting the hawkish Fed concerns. Meanwhile, gold prices have experienced a recovery due to the falling US Treasury bond rates.

Focus on the Upcoming Personal Consumption Expenditures Price Index

Later in the day, all eyes are on the Personal Consumption Expenditures Price Index, which is the Federal Reserve's preferred measure of inflation. The Core PCE Price Index is expected to confirm that inflation remained high in January, with analysts predicting a 4.3% increase from the same time last year.

The Federal Reserve aims to combat inflation and has given few indications that it will continue to raise interest rates to achieve this goal. Additionally, higher yields increase the opportunity cost of holding non-yielding assets such as gold, which is unfavorable for the precious metal.

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1816            1832

1809            1841

1800            1848

Pivot Point: 1825

Gold (XAU/USD) – Technical Outlook

Gold prices have slipped to the $1,820 support zone, as the downward channel and descending triangle pattern on the 4-hour timeframe continue to exert selling pressure.

If the $1,820 double-bottom pattern is broken, gold prices may fall to the $1,810 or $1,799 support zones. Although the RSI and MACD indicators are still in the selling zone, the MACD is forming smaller histograms, indicating a weaker selling bias. Additionally, the 50-day simple moving average is around $1,830, which may act as a resistance level to the upside.

Market participants are closely watching the Core PCE Price Index m/m and New Home Sales as strong US data figures usually weigh on gold prices.

Related:

    * USD/JPY Price Analysis – February 24, 2023

Daily Price Outlook

The USD/JPY exchange rate is currently trading at 134.29, reflecting a 0.16% decline over the past 24 hours

Weekly US Unemployment Claims and Preliminary Q1 2023 GDP Report

In the second estimate of the fourth-quarter GDP growth rate report, which was released on February 23, it was reported that GDP expanded by 2.7% quarter-over-quarter, which was slightly below the consensus forecast of 2.9%.

Meanwhile, according to the Labor Department, the number of individuals filing new claims for unemployment benefits decreased unexpectedly in the week ending February 18, falling from 195,000 to a seasonally-adjusted 192,000. Since early January, the number of initial claims for unemployment benefits has remained consistently below 200,000.

Following the release of US economic statistics, the US dollar is fluctuating between gains and losses. The dollar index, which compares the dollar to six important peers, slightly decreased by 0.02% to 104.55.

Expectations for Fed Rate Hikes in 2023

According to the minutes of the FOMC's first policy meeting of the year, all members agreed that additional rate hikes would be necessary to reach the inflation targets. The report did mention that a few participants were in favor of raising rates by 50 basis points, but no further details were provided.

Meanwhile, the standard 10-year US Treasury bond yield saw a minor rebound from daily lows but ultimately closed lower. Traders have acknowledged the possibility of the Federal Reserve continuing its aggressive rate-hike trajectory, which has contributed to a slight increase in the value of the dollar.

Japan's CPI Rises as Expected, Putting Pressure on Bank of Japan

According to statistics released on February 23, the national core consumer price index, which excludes volatile items like fresh food, increased by 4.2% in January, up from 4% in the previous month and in line with market forecasts. In addition, the national CPI inflation, including volatile items, rose to 4.3% in January, compared to 4% in December.

Consumer inflation in Japan rose as expected in January due to higher commodity prices and strong domestic demand. The release of inflation data caused the Yen to strengthen, which put additional pressure on the Bank of Japan to tighten its monetary policy.

The statements of new Bank of Japan (BOJ) Governor Kazuo Ueda are being closely watched. Ueda believes that the BOJ's current policy of monetary easing is appropriate, as inflation has not been able to reach the central bank's 2% target on a regular and steady basis. He believes that retaining an ultra-loose monetary policy is reasonable.

Despite the new governor's defense of the easy money policy, the Japanese Yen continued to strengthen.

USD/JPY Intraday Technical Levels

Support      Resistance

134.19         135.22

133.75         135.81

133.16         136.25

Pivot Point: 134.78

USD/JPY  – Technical Outlook

The USD/JPY pair is currently receiving immediate support at the 134.400 level and is gaining further support near the 134.380 level. If it breaks below this level, the next support area is around 134, which acted as support on February 20, 2023.

The upward channel signals a bullish bias in the market, with USD/JPY's resistance remaining at 135 or 135.45. Later today, the market will be focused on a speech by MPC Member Tenreyro and US New Home Sales.

Related:

    * S&P500 (SPX) Price Analysis – February 23, 2023

    * GBP/USD Price Analysis – February 24, 2023