Daily summary: Will the US dollar continue to rally?

• European indices finished today's session lower, with the German DAX falling 0.84%, as Friday's stronger-than-expected NFP data and  escalating tensions between the US and China over a suspected spy balloon weighed on market sentiment.

• ECB Governing Council member Ignazio Visco said on Saturday that the ECB could take a cautious approach to increasing interest rates as short-term inflation expectations had dropped sharply. 

• German factory orders rebounded 3.2% in December, easily beating expectations of a 2% growth.

• BoE's Pill said that policymakers are prepared to do more to get inflation back to target. He also pointed out that chances of inflation getting embedded in the UK is higher than Europe.

• Major Wall Street indices also fell on Monday as traders are bracing themselves for Powell's Tuesday speech at the Economic Club of Washington which could offer clues about how much more FED may tighten financial conditions to cool the economy. The Dow Jones is trading 0.15% lower, while the S&P 500 and Nasdaq 100 dropped 0.6% and 0.80% respectively.

• Dell (DELL.US) announced plans to lay off 6,500 jobs workers as demand for PC computers fell in  Q4 '22 by 37% YoY which accounts for 55% of the company's revenues.

• Today after market close, Activision Blizzard (ATVI.US), Take-Two Interactive (TTWO.US), Pinterest (PINS.US) will report their quarterly results.

• Energy commodities are trading mixed. Natgas oscillates around $2.34, the lowest level since April 2021, after recent forecasts pointed to above-normal temperatures until at least February 18th. 

• WTI crude erased early losses as sellers failed to break below crucial support at $72.50, while Brent briefly jumped above $81.00 mark as EU  ban on seaborne imports and price caps for Russian oil products also came into effect on Sunday, while recent earthquake in Turkey and Syria threatened operations at the Ceyhan oil terminal in southern Turkey.

• Aluminum prices experienced increased volatility as the US is expected to impose a 200% tariff on Russian-made aluminum.

• Gold erased early gains and is trading around the flatline  amid dollar strength and higher treasury yields.

• Dollar remains the dominant force on the FX market. The dollar index broke well above 103 for the first time since early January. EURUSD pair extended declines and is testing major support at 1.0720. The dollar held recent gains against the  sterling, antipodean currencies and yen amid reports that the government had approached Bank of Japan Deputy Governor Masayoshi Amamiya, considered the most dovish among the potential candidates, about succeeding Haruhiko Kuroda. 

• Mixed moods prevail on the cryptocurrencies market. Bitcoin pulled back below psychological support at $23000, while is trading slightly higher after defending support at $1600.

AUDUSD pair pulled back sharply on Monday, however sellers struggle to break above major support at 0.6880, which is marked with previous price reactions and 50 SMA (green line). As long as the pair sits above this level, resumption of the recent upward trend cannot be ruled out. Source: xStation5