US Stocks Surge as Banking Turmoil Fades, Gold and Cable Under Pressure

March 15, 2023

US stocks surged in the closing hours of trading on Tuesday, with traders confident that the worst of the banking turmoil was over. The KBW Bank Index gained 3.2% but remained fragile, with rating companies offering negative remarks on the financial sector.

The S&P500 regained much of the ground lost earlier in the day, with all eleven sectors staying in positive territory. The Communication Service and Information Technology sectors saw the best performance, surging by 2.75% and 2.29% respectively. Meanwhile, the Nasdaq 100 experienced its largest one-day gain in six weeks, rising by 2.3% on Tuesday.

Main Pairs Movement

The US Dollar was largely unchanged on Tuesday after strong consumer price data suggested the Federal Reserve may hike interest rates next week. Fears of turmoil in the banking sector faded, and the DXY hovered in a narrow range from 103.4 to 104.0 for the day. In contrast, the GBPUSD edged lower by 0.21% as traders awaited the UK Finance Minister’s annual budget speech. The EURUSD remained little changed for the day.

Gold slid by 0.51% on Tuesday after snapping a three-day uptrend the previous day. The metal faced a corrective pullback, with the US Dollar tracing upbeat Treasury bond yields to pare the week-start losses ahead of key United States data.

Technical Analysis

EURUSD (4-Hour Chart)

The EURUSD traded under pressure around $1.0700 at the press time after Tuesday’s US CPI data release. Market participants assessed the inflation data’s implications on the Fed’s monetary policy, with the EURUSD up by 0.86% on the day, trading at $1.0731, with the daily high and low at $1.0748 and $1.0650 respectively. It is essential to follow the US February Retail Sales report on Wednesday at 12:30 GMT and the ECB Monetary Policy Decision Statement on Thursday at 13:15 GMT, as they are critical data points in the short term. The collapse of Silicon Valley Bank has led the market to anticipate a less aggressive monetary policy stance from the Federal Reserve.

The daily RSI is at 55 with a neutral stance, while the 38.2% Fibonacci retracement level of the latest daily decline is at 1.0708, and the 61.8% Fibonacci level is at 1.0683.

Resistance: 1.0790, 1.0918, 1.1020

Support: 1.0666, 1.0601, 1.0560

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XAUUSD (4-Hour Chart)

XAUUSD remains mildly under pressure, as traders struggle to justify mixed catalysts before the US core CPI data during early Tuesday. The metal dropped 0.25% intraday to $1,909 during the first loss-making day in four heading into the European session. Fears from the Silicon Valley Bank and Signature Bank collapses have recently reversed hawkish expectations from the Fed and challenged the DXY bulls of late.

The daily RSI is at 43 with a bearish stance, while the 38.2% Fibonacci retracement level of the latest daily rise is at 1,903, and the 61.8% Fibonacci level is at 1,897.

Resistance: 1924, 1947, 1956

Support: 1900, 1859, 1850

Economic Data

CurrencyDataTime (GMT + 8)Forecast
CNYIndustrial Production (YoY) (Feb)10:001.3%
GBPSpring Statement20:30N/A
USDCore Retail Sales (MoM) (Feb)20:30-0.1%
USDPPI (MoM) (Feb)20:300.3%
USDRetail Sales (MoM) (Feb)20:30-0.3%
USDCrude Oil Inventories22:300.555M