March 13, 2023
DXY: The US dollar index is holding around 103.50. Investors are pondering February US labor market data. As expected, employment growth exceeded forecasts. However, the unemployment rate rose from 3.4% to 3.6%. Despite this, market participants are certain that the regulator will raise its interest rate by 50 basis points at the next meeting to prevent further inflation growth. The problems of the US banking system may provide additional support for the dollar. After Silvergate and Silicon valley banks went bankrupt, there is a possibility of a rapid outflow of deposits from other banks, which could provoke an increased demand for the cash dollar. Against this background, we recommend holding long positions.
BUY STOP 104.00/TP 104.80/SL 103.70
USD/JPY: The USD/JPY pair is trading around 134.50. Investors are focusing on the results of the Bank of Japan policy meeting, the final one for its current governor Haruhiko Kuroda. The interest rate was expected to remain at -0.10%. The statement noted that the Japanese economy, despite the negative impact of high commodity inflation, is recovering and financial conditions remain favorable. The agency intends to maintain the current loose monetary policy until price growth is stable, in line with the target level of 2%. Additional pressure on the yen came from weak data on GDP. In particular, the Japanese economy grew by 0.1% over the year against the forecast of 0.8%. Given the above, the growth of the USD/JPY pair may continue.
BUY STOP 134.80/TP 135.50/SL 134.50
Brent: Brent oil is testing the resistance of $83 per barrel. The current recovery of the asset is associated with the release of the February data from the US labor market, which wasn’t as strong as expected. Analysts hope for China’s recovery and oil consumption growth in the country and wonder whether Russia will cut production by 500 barrels per day in March. If it does, the volume of oil supply on the global market may decrease, and prices will receive additional support.
BUY STOP 83.00/TP 84.50/SL 82.50