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พุธ, มกราคม 22, 2020

Crude oil prices have accelerated the weekly downside to fresh lows in the $57.30 region, levels last seen in early December. WTI focused on oversuppl

The barrel of WTI breaks below the $58.00 mark.Oversupply concerns offset Libyan disruptions.API’s weekly report coming up next.Crude oil prices have accelerated the weekly downside to fresh lows in the $57.30 region, levels last seen in early December. WTI focused on oversupply, data Prices of the West Texas Intermediate are trading on the back foot for the third consecutive session on Wednesday, coming under heavy downside pressure soon after recording weekly tops just below the key $60.00 mark per barrel (Monday). So far, prices have reached the 78.6% Fibo retracement of the December rally in the $57.60 region. In fact, crude oil prices remain under pressure as oversupply concerns continue to weigh on traders’ sentiment. Indeed, these concerns continue to overshadow supply disruptions in Libya, which amount to nearly a million bpd following the closure of the country’s main oilfields, export terminals and several ports. Furthermore, these oversupply jitters have been somehow confirmed by IEA’s Birol at the WEF in Davos on Tuesday, where he remarked the ‘abundance of energy supply of oil and gas’. Other driver weighing on sentiment around crude oil comes from the recent virus outbreak in China and its potential impact on the economic growth. Later in the NA session, the API will publish its weekly report on US crude oil supplies ahead of Thursday’s DoE report. WTI significant levels At the moment the barrel of WTI is retreating 2.04% at $57.06 and a break below $55.31 (monthly low Dec.31) would aim for $54.77 (low Nov.20 2019) and then $53.66 (low Oct.31 2019). On the flip side, the next resistance aligns at $58.83 (55-day SMA) seconded by $59.73 (weekly high Jan.20) and finally $60.53 (50% Fibo of the December-January rally).

Wall Street's main indexes started the day higher to reverse Tuesday's losses supported by upbeat earnings figures. As of writing, the Dow Jones Indus

Upbeat earnings reports help US stocks rebound after Tuesday's drop.S&P 500 Technology Index leads rally on Wednesday.S&P 500 and Nasdaq Composite hit fresh record highs after opening bell.Wall Street's main indexes started the day higher to reverse Tuesday's losses supported by upbeat earnings figures. As of writing, the Dow Jones Industrial Average was up 0.35% on the day and the Nasdaq Composite and the S&P 500, which touched fresh all-time highs at the opening, were adding 0.65% and 0.45%, respectively. Tech shares gain traction Stronger-than-expected quarterly earnings and an upbeat full-year profit forecast from IBM allowed the tech giant's shares to rise sharply on Wednesday. With the company stocks gaining more than 4% in the early trade, the S&P 500 Technology Index is adding 0.8% to lead the rally. On the other hand, falling crude oil prices weigh on the Energy Index, which is down 0.4% as the only major S&P 500 sector to stay in the negative territory. 

USD/CHF is attempting to rebound from multi-month lows while trading well below its main daily simple moving averages.

USD/CHF is under mild selling pressure in the New York session. Support is seen at the 0.9652 level.  USD/CHF daily chart   USD/CHF is attempting to rebound from multi-month lows while trading well below its main daily simple moving averages.   USD/CHF four-hour chart   The market is trading in a rising wedge channel while bears are rejecting the 0.9700 figure. Sellers might try to bring the market down to the 0.9652 support. If this level breaks under the selling pressure 0.9615 can become next on the bears’radar. However, if the greenback is able to hold its ground near current levels, bulls can try to break the 0.9742 resistance and target the 0.9790/0.9820 resistance zone, according to the Technical Confluences Indicator.    Additional key levels  

The GBP/USD pair continued scaling higher through the early North-American session and climbed to fresh two-week tops, around mid-1.3100s in the last

GBP/USD rallied amid signs of recovery in the UK manufacturing sector.A modest USD pullback remained supportive of the strong momentum.Technical buying above the 1.3100 mark provided an additional boost.The GBP/USD pair continued scaling higher through the early North-American session and climbed to fresh two-week tops, around mid-1.3100s in the last hour. Following a brief consolidation through the early part of Wednesday's trading session, the pair caught some aggressive bids after the latest CBI report showed that the UK manufacturing sector started the year on a strong footing. Adding to this, the Quarterly Business Situation Index – the gauge of optimism in the manufacturing sector – rebounded sharply to +23 in January from -44 in October and marked its highest level since April 2014. The data added to the latest optimism led by Tuesday's stronger-than-expected UK wage growth figures and forced investors to temper expectations for an imminent interest rate cut by the Bank of England at its upcoming meeting on January 30. This resulted into some aggressive intraday short-covering move, which took along some near-term trading stops being placed near the 1.3100 round-figure mark and further accelerated the intraday positive movement amid a modest US dollar pullback. With Wednesday's strong move up, the pair finally seems to have confirmed a near-term bullish breakthrough a three-week-old descending trend-channel. Hence, some follow-through strength, possibly beyond the 1.3200 handle, now looks a distinct possibility. Technical levels to watch  

"CPI inflation was unchanged at 2.2% y/y in December, in-line with TD's forecast and slightly below the market consensus," noted TD Securities analyst

"CPI inflation was unchanged at 2.2% y/y in December, in-line with TD's forecast and slightly below the market consensus," noted TD Securities analysts. Key quotes "The index was unchanged on a m/m basis, as sharply higher airfares offset broader seasonal weakness. The average of the Bank's three core CPI measures edged lower due to unfavourable base effects." "The downside surprise on inflation fits neatly with the recent string of disappointing data releases in Canada, but with headline and core inflation metrics both slightly above 2% it will be met with a shrug in Ottawa. We (and the Bank) remain focussed on the real activity figures." "Rates: We saw a muted market reaction, which makes sense with BoC meeting today at 10:00 ET. We feel the BoC's growth forecasts are more important than the current headline CPI level."

The USD/JPY pair is having a difficult time finding direction on Wednesday as investors are waiting for the next significant catalyst. As of writing,

10-year US Treasury bond yield stays flat on Wednesday.Chicago Fed's National Activity Index points out to slowdown in economic growth.US Dollar Index drops below 97.50 mark in early American session.The USD/JPY pair is having a difficult time finding direction on Wednesday as investors are waiting for the next significant catalyst. As of writing, the pair was up 0.08% on the day at 109.95. USD weakens slightly on Wednesday Earlier in the day, US President Donald Trump said that they will have to impose a 25% tariff on European car imports if they were to fail to reach a trade deal with the European Union. Although these comments weighed on European stock markets, the JPY struggled to find demand as a safe-haven.  Regarding the Federal Reserve's monetary policy, Trump argued that the US GDP would expand by 4% if it weren't for the FOMC's interest rate decisions. Meanwhile, the data published by the Federal Reserve Bank of Chicago showed that the economic growth in December lost momentum with the National Activity Index slumping to -0.35 from 0.41 in November. Although the US Dollar Index, which spent a large portion of the day moving sideways above the 97.50, edged lower and was last down 0.15% on the day at 97.45, it failed to help the pair break out of its tight daily channel. In the meantime, the 10-year US Treasury bond yield is staying flat on the day to allow the pair to stay confined in its range.  In the early trading hours of the Asian session on Thursday, Trade Balance, All Industry Activity Index and Coincident Index from Japan will be looked upon for fresh impetus. On Friday, the Bank of Japan will be publishing the minutes of its January monetary policy meeting. Technical levels to watch for  

The Canadian dollar is trading on a volatile note vs. its American counterpart on Wednesday, with USD/CAD now hovering around the 1.3050 region in the

USD/CAD keeps the familiar range in the mid-1.30s.Canada headline CPI rose 2.2% YoY in December.The Canadian dollar is trading on a volatile note vs. its American counterpart on Wednesday, with USD/CAD now hovering around the 1.3050 region in the wake of key data. USD/CAD now looks to BoC The pair is extending the erratic performance so far this week, coming under selling pressure in levels just below 1.3100 the figure, or weekly highs, recorded earlier in the session. CAD regained some shine after Canadian inflation figures tracked by the headline CPI rose at an annualized 2.2% during December, while Core consumer prices rose 2.0% from a year earlier. Additional results in the Canadian docket saw the New Housing Price Index rising 0.2% MoM during last month and the Wholesale Trade Sales contracting 1.2% inter-month in November. Later in the session, the BoC is expected to leave the key interest rate unchanged at 1.75%, while Governor S.Poloz will give a press conference afterwards. USD/CAD significant levels As of writing the pair is retreating 0.13% at 1.3053 and a breach of 1.3035 (weekly low Jan.22) would aim for 1.2951 (low Dec.31 2019) and then 1.2884 (monthly low Sep.20 2018). On the upside, the next hurdle comes at 1.3091 (weekly high Jan.22) followed by 1.3104 (2020 high Jan.9) and finally 1.3157 (55-day SMA).

United States Housing Price Index (MoM) meets forecasts (0.2%) in November

United States Redbook Index (YoY) up to 5.3% in January 17 from previous 5%

United States Redbook Index (MoM) climbed from previous -0.2% to 0% in January 17

EUR/USD is trading in a weak bear trend below its 50 and 200-day simple moving averages (SMAs).

EUR/USD remains under pressure below the 1.1118 resistance.The level to beat for bears is the 1.1067 support.   EUR/USD daily chart    EUR/USD is trading in a weak bear trend below its 50 and 200-day simple moving averages (SMAs). However, the spot is also trading in an ascending channel which originated in October 2019. Additionally, the spot is trading in a bull flag since late December 2019. EUR/USD created a head-and-shoulders pattern and a hypothetical break above the right shoulder near 1.1175 and the 200 SMA could be seen as a bullish continuation; this bullish scenario is less likely.    EUR/USD four-hour chart   As the spot is trading below the main SMAs the euro remains under selling pressure. Sellers are looking for a breakdown below the 1.1067 support and a potential drop to the 1.1032 and the 1.1000 figure. Resistances are seen near the 1.1095, 1.1118 and 1.1150 levels, according to the Technical Confluences Indicator.    Additional key levels   

The AUD/USD pair built on its steady intraday recovery from over one-month lows and climbed to fresh session tops, around the 0.6855 region in the las

AUD/USD stages a modest rebound and snaps four consecutive days of losing streak.A modest USD pullback seemed to have prompted some intraday short-covering move.Further gains are likely to remain limited ahead of the Australian jobs data on Thursday.The AUD/USD pair built on its steady intraday recovery from over one-month lows and climbed to fresh session tops, around the 0.6855 region in the last hour. A combination of supporting factors helped the pair to attract some buying interest near the 0.6830-25 region and move into the positive territory to snap four consecutive days of losing streak. A modest USD pullback helped bounce off lows A rebound in the global risk sentiment extended some support to perceived riskier currencies, including the aussie, and turned out to be one of the key factors that helped limit the early slide. On the other hand, the US dollar failed to preserve its early gains amid a pullback in the US Treasury bond yields and further collaborated to the pair's intraday rebound of around 30 pips. The pair has now recovered a part of the overnight downfall, albeit absent relevant market moving economic releases from the US might keep a lid on any strong recovery move for the major. Moving ahead, market participants now look forward to the Australian monthly employment details, which might influence the pair's momentum and produce some meaningful trading opportunities. Technical levels to watch  

The economic growth in the US slowed down in December with the Federal Reserve Bank of Chicago's National Activity Index (CFNAI) dropping to -0.35 fro

Chicago Fed's National Activity Index drops into negative territory in December.US Dollar Index continues to fluctuate in tight range above 97.50.The economic growth in the US slowed down in December with the Federal Reserve Bank of Chicago's National Activity Index (CFNAI) dropping to -0.35 from 0.41 in November. This reading came in slightly worse than the market expectation of -0.3 as well. "The CFNAI Diffusion Index, which is also a three-month moving average, edged down to –0.27 in December from –0.25 in November," Chicago Fed noted in its publication. "Twenty-five of the 85 individual indicators made positive contributions to the CFNAI in December, while 60 made negative contributions."  Market implications The US Dollar Index, which tracks the greenback's value against a basket of six major currencies, largely ignored this data and was last down 0.08% on the day at 97.54.

Inflation in Canada, as measured by the Consumer Price Index (CPI), in December stayed unchanged at 2.2% on a yearly basis as expected, the data publi

Core inflation in Canada dropped to 1.7% in November from 1.9%. CAD seems to be weakening against its rivals after CPI data. Inflation in Canada, as measured by the Consumer Price Index (CPI), in December stayed unchanged at 2.2% on a yearly basis as expected, the data published by Statistics Canada showed on Wednesday. On a monthly basis, the CPI remained steady as well. Furthermore, the Bank of Canada's core CPI, which strips volatile food and energy prices, dropped to 1.7% in November from 1.9% on a yearly basis and came in below the market expectation of 1.9%. On a monthly basis, the BoC's core CPI printed -0.4%. Market reaction The loonie weakened modestly on lower-than-expected core CPI reading and the USD/CAD pair recovered to 1.3050 area, where it was still down 0.1% on a daily basis.

Canada New Housing Price Index (YoY) rose from previous -0.1% to 0.1% in December

United States Chicago Fed National Activity Index below expectations (-0.3) in December: Actual (-0.35)

United States Chicago Fed National Activity Index came in at 0.56, above expectations (-0.3) in December

Canada Wholesale Sales (MoM) below forecasts (0%) in November: Actual (-1.2%)

Canada BoC Consumer Price Index Core (YoY) below forecasts (1.9%) in December: Actual (1.7%)

Canada Consumer Price Index (YoY) in line with forecasts (2.2%) in December

Canada Consumer Price Index - Core (MoM) remains unchanged at 0.1% in December

Canada BoC Consumer Price Index Core (MoM) came in at -0.4%, below expectations (-0.2%) in December

Canada Consumer Price Index (MoM) came in at 0%, below expectations (0.1%) in December

Canada New Housing Price Index (MoM) came in at 0.2%, above forecasts (0%) in December

The Turkish Central Bank (CBRT) is considering single-digit inflation forecasts and the "outlook is for positive real interest rates," CBRT Governor C

The Turkish Central Bank (CBRT) is considering single-digit inflation forecasts and the "outlook is for positive real interest rates," CBRT Governor Cetinkaya told NTV on the sidelines of the World Economic Forum in Davos on Wednesday. "We will see a gradual move towards single-digit inflation in 2020," Cetinkaya added. "We have entered a period of fine-tuning in monetary policy in 2020. Next steps in monetary policy will be data-dependent." Market implications These comments seem to be helping the TRY gather strength. As of writing, the USD/TRY pair, which touched a daily high of 5.9445, was trading at 5.9230, losing 0.25% on a daily basis.

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Wednesday. Meanwhile, the earl

Gold struggled to capitalize on the attempted intraday bounce and failed near 50-hour SMA.Mixed oscillators haven’t been supportive of any firm direction and warrant some caution.Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Wednesday. Meanwhile, the earlier attempted recovery move remained capped near 50-hour SMA, which should now act as a key pivotal point for the commodity's intraday movement. Given the overnight break below a one-week-old ascending trend-channel, the intraday rejection favours bearish traders and support prospects for further weakness. Bearish technical indicators on hourly charts further reinforce the negative outlook amid a rebound in the global risk sentiment on Wednesday. However, oscillators on the daily chart, although have been correcting, have still managed to hold in the bullish territory and warrant some caution for aggressive traders. Hence, it will be prudent to wait for some strong follow-through selling below the $1550 level before positioning for any further depreciating move. Below the mentioned support, the commodity is likely to accelerate the slide back towards last week's swing lows, around the $1536-35 region. Some follow-through selling will set the stage for an extension of the recent pullback from multi-year tops and drag the commodity towards the $1520-18 horizontal support. Gold 1-hourly chart  

"The agreement between the US and China won’t deliver enough stimulus for world trade to show a decent recovery in 2020," argues ING's Raoul Leering.

"The agreement between the US and China won’t deliver enough stimulus for world trade to show a decent recovery in 2020," argues ING's Raoul Leering. Key quotes "The data for November and December 2019 is yet to be released, but the chances are that world trade in goods fell by half of one per cent last year. That's the first year of contraction since 2009. One reason for this is, of course, the trade war. Trade between the US and China was $90bn lower during the first eleven months of last year than over the same period in 2018, a drag on world trade of half a percentage point." "Besides this direct effect, the trade war has also created a lot of uncertainty, especially in the trade-intensive manufacturing sector." "Another reason for caution is that a significant part of the tariff increases only came about during the course of 2019. This means that trade flows in the first part of 2020 run up against higher trade barriers than last year, a drag for world trade."

After closing the previous two weeks with losses and erasing more than 7% since the start of the year, the barrel of West Texas Intermediate (WTI) sta

WTI's recovery loses momentum before testing $60 handle.IEA forecasts a surplus of 1 million barrels per day in first half of 2020.Coming up: API's weekly crude oil stock report.After closing the previous two weeks with losses and erasing more than 7% since the start of the year, the barrel of West Texas Intermediate (WTI) staged a rebound at the start of the week but lost its momentum before testing the critical $60 handle on Monday. The WTI lost 0.7% on Tuesday before continuing to push lower on Wednesday and was last seen trading near $58, down 0.35% on a daily basis. Supply-demand dynamics continue to drive oil prices On Tuesday, the head of the International Energy Agency, Fatih Birol, told the Reuters Global Markets Forum at the World Economic Forum meeting in Davos said the IEA was forecasting a surplus of 1 million barrels per day in the first half of 2020 to put pressure on crude oil prices. On the other hand, heightened geopolitical tensions in Libya, which triggered the recovery earlier this week, seems to be limiting the losses for the time being. Commenting on this development, "recent unrest in Libya has seen the country’s National Oil Corporation declaring force majeure, production of about 700kb/d could be held up," said ANZ analysts. "Iraq is another producer vulnerable to production risk."  Later in the day, the American Petroleum Institute's weekly crude oil inventory report, which last week showed a build of 1.1 million barrels, will be looked upon for fresh impetus. Technical levels to consider  

Ned Rumpeltin, European Head of FX Strategy at TD Securities (TDS), offered his take on a modest rebound in the global risk sentiment on Wednesday, al

Ned Rumpeltin, European Head of FX Strategy at TD Securities (TDS), offered his take on a modest rebound in the global risk sentiment on Wednesday, along with a brief preview on the upcoming release of Canadian consumer inflation figures and the BoC policy decision. Key Quotes: “Investor sentiment continues to stabilize after China announced measures to contain the spread of the coronavirus outbreak. We continue think it is premature to sound the "all clear" here, however, and think markets will not be able to assess the full scope of the situation for several weeks.” “Looking ahead to today, today's BoC policy decision is our main focus while the December CPI data also features. We are looking for some moderate downside risks to both headline and core price measures. Elsewhere, the US calendar is fairly quiet as Davos and the impeachment proceedings provide distractions.” “We look for the BoC to remain on hold at 1.75%, but for a cautiously optimistic stance to emerge. Amid an improved global growth outlook, this could give the communiqué a somewhat hawkish tinge. Despite this, we think downside risks in USDCAD will prove limited. Instead, we remain long the pair in our model portfolio.”

Analysts at ING expect Norway's central bank to keep its powder dry this week but still think it is too early to rule out some further tightening in 2

Analysts at ING expect Norway's central bank to keep its powder dry this week but still think it is too early to rule out some further tightening in 2020 and also expect the Norwegian krone to outperform in the coming months. Key quotes: “The Norwegian central bank is unlikely to rock the boat at its interim meeting this Thursday - after all there won't be a monetary policy report or press conference. Expect policymakers to reiterate that ‘the policy rate will most likely remain at this level in the coming period’ – any deviation from that communication would be interpreted as a rather strong hawkish shift.” “We still wouldn't completely rule out further tightening this year. Currently, the Norges Bank's rate projection implies there's a possibility of a hike around the second quarter (roughly a 40% chance). We're still loosely pencilling in a rate increase in the middle of this year, although this does rely upon a more pronounced global recovery, and one that isn't coupled with sizable NOK appreciation.”

The better mood in the sterling is now forcing EUR/GBP to shed further ground and extend further the recent breakdown of the 0.8500 mark. EUR/GBP offe

EUR/GBP loses further ground to the 0.8440 area.GBP-strength drags the cross to multi-day lows.UK’s CBI surveys surpassed expectations in January.The better mood in the sterling is now forcing EUR/GBP to shed further ground and extend further the recent breakdown of the 0.8500 mark. EUR/GBP offered post-UK data The European cross has come under renewed and heavy downside pressure in the past couple of sessions, breaking below the key support at 0.8500 the figure and accelerating the leg down to the proximity of YTD lows in the 0.8460/50 band. The improved sentiment in the quid is sponsoring the decline in the cross, particularly in response to better-than-expected CBI results earlier today. In fact, the CBI Industrial Trends Orders came in at -22 for the current month, surpassing estimates and up from December’s -28. In addition, the CBI Business Optimism bettered to multi-year highs at 23 for the same period. The results show some renewed optimism in the sector and seem to have cooled down speculations of a rate cut by the BoE in the near term somewhat. On another front, US Treasury Secretary S.Mnuchin said a US-UK trade deal is a priority this year, while Chancellor Javid expressed his optimism that an agreement with the EU could come before year-end. What to look for around GBP The British pound is extending its upbeat momentum in response to better-than-expected results from the CBI indicators and the recently published labour market report. In the meantime, investors’ attention remains on the upcoming Brexit deadline (January 31st) and the subsequent key trade negotiations with the European Union. However, rising speculations of a probable rate cut by the BoE in the near-term carry the potential to undermine further gains in the quid. EUR/GBP key levels The cross is losing 0.53% at 0.8446 and a breakdown of 0.8392 (low Dec.9 2019) would expose 0.8275 (2019 low Dec.13) and then 0.8248 (monthly low July 2016). On the other hand, the next up barrier lines up at 0.8518 (55-day SMA) seconded by 0.8595 (2020 high Jan.14) and finally 0.8646 (100-day SMA).

Wednesday's Canadian economic docket highlights the key release of domestic consumer inflation figures for December, scheduled to be published at 13:3

Canadian CPI Overview Wednesday's Canadian economic docket highlights the key release of domestic consumer inflation figures for December, scheduled to be published at 13:30 GMT. The headline CPI is anticipated to have edged higher by 0.1% during the reported month as compared to a 0.1% fall recorded in the previous month. Meanwhile, the yearly rate is anticipated to hold steady at 2.2%, while the BoC's core CPI is also expected to hold steady at 1.9%. How could it affect USD/CAD? Ahead of the important releases, the USD/CAD pair was seen retreating from the vicinity of the 1.3100 handle, or two-week tops, albeit remained well within a familiar trading range. A stronger reading might be enough to provide an additional boost to the Canadian dollar and prompt some selling, forcing the major to retest the 1.3035-30 strong horizontal support. Some follow-through selling has the potential to drag the pair further towards the key 1.30 psychological mark. Conversely, a softer reading might provide a modest lift to the major, though bulls are likely to wait for some strong follow-through buying beyond the monthly swing high resistance near the 1.3100 round-figure mark. Above the mentioned handle, the pair is likely to aim back towards challenging the 1.3165-70 supply zone. Meanwhile, barring the immediate knee-jerk reaction, the pair might remain well within the recent trading range as investors might refrain from placing aggressive bets ahead of the latest monetary policy update by the Bank of Canada (BoC). Key Notes    •  USD/CAD eases from 2-week tops, focus on Canadian CPI/BoC decision    •  USD/CAD Analysis: could edge lower    •  USD/CAD Price Analysis: Remains confined in a multi-day old trading range, below 1.3100 mark About BoC's Core CPI Consumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator for inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.

US President Trump noted that they have not yet set a timeline on potential tariffs on European car manufacturers. "I have a date in my mind it is a f

US President Trump noted that they have not yet set a timeline on potential tariffs on European car manufacturers. "I have a date in my mind it is a fairly quick date," Trump added while speaking to reporters on the sidelines of the World Economic Forum in Davos on Wednesday. "I think we will have a deal with the EU before the US presidential election," Trump said.  The shared currency seems to be having a tough time finding demand on Wednesday on Trump's comments. As of writing, the EUR/USD pair was down 0.05% on the day at 1.1077.

The USD/INR cross failed to capitalize on its early uptick and witnessed a modest intraday pullback from near two-week tops. The pair continued with i

USD/INR witnessed a modest intraday pullback from two-week tops.The technical set-up still seems tilted in favour of bullish traders.The USD/INR cross failed to capitalize on its early uptick and witnessed a modest intraday pullback from near two-week tops. The pair continued with its struggle to sustain above 100-day SMA, around the 71.30 region and has now eroded a major part of the previous session's modest uptick. Despite the rejection at higher levels, the pair has managed to hold its neck above the 71.00 round figure mark. Against the backdrop of last week's rebound from the very important 200-day SMA, the set-up still seems tilted in favour of bullish traders and support prospects for additional gains. Meanwhile, technical indicators on the daily chart have fully recovered from the negative territory but are yet to gain any meaningful traction. This warrant some caution before placing any aggressive bullish bets for a possible move towards reclaiming the 72.00 round-figure mark. On the flip side, any meaningful pullback below the 71.00 handle might continue to attract some dip-buying near the 70.65-60 region, which if broken should pave the way for an extension of the recent slide. The pair then might accelerate the fall towards December swing lows support near the 70.35-30 region before eventually dropping to challenge the key 70.00 psychological mark. USD/INR daily chart  

United States MBA Mortgage Applications declined to -1.2% in January 17 from previous 30.2%

The British pound gathered strength against its major rivals on Wednesday after the data published by the Confederation of British Industry (CBI) reve

Optimism in UK manufacturing sector rose to its highest level since April 2014.US Dollar Index continues to fluctuate above 97.50.Coming up: Chicago Fed's National Activity Index and Existing Home sales data from US.The British pound gathered strength against its major rivals on Wednesday after the data published by the Confederation of British Industry (CBI) revealed that the manufacturing sector is starting the new year on a strong footing. The GBP/USD pair, which jumped to a fresh daily high of 1.3094 in the last hour, was last seen trading at 1.3090, adding 0.32% on a daily basis. Signs of life in UK manufacturing activity The CBI's headline Manufacturing Order Book Balance rose to its best level since August at -22 in January from -28 in December. More importantly, the Quarterly Business Situation Index, the gauge of optimism in the manufacturing sector, recorded its best reading since April of 2014 at +23. Reflecting the broad-based GDP strength, the EUR/GBP pair is down 0.3% on the day at 0.8465. Commenting on the data, "the boost to optimism in the manufacturing sector is very encouraging given the difficult environment that firms have faced in recent months," said Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council. "However, it is clear that the sector is not yet out of the woods in terms of performance." On the other hand, the US Dollar Index is fluctuating above the 97.50 mark for the third straight day on Wednesday amid a lack of significant macroeconomic drivers. In the second half of the day, the Federal Reserve Bank of Chicago's National Activity Index and Existing Home Sales data from the US will be looked upon for fresh impetus. However, these data are unlikely to trigger a noticeable market reaction and Friday's Manufacturing and Services PMI data could ramp up the volatility. Technical levels to watch for  

EUR/USD is struggling for direction on Wednesday, managing to regain some poise after bottoming out in new yearly lows at 1.1075. If sellers remain in

EUR/USD is bouncing of earlier 2020 lows at 1.1075.The 100-day SMA/support line near 1.1060 act as solid support.EUR/USD is struggling for direction on Wednesday, managing to regain some poise after bottoming out in new yearly lows at 1.1075. If sellers remain in control, the pair could attempt a visit to the 1.1070/65 band, where converge the 100-day SMA and the 3-month support line. The offered bias in the spot should alleviate somewhat above the 55-day SMA, today at 1.1090. EUR/USD daily chart  

The index has so met a tough barrier in the 97.70 region, where sits the key 200-day SMA and so far yearly highs. A breakout of this area on a convinc

DXY is prolonging the sideline theme always below the 97.70 region.Above this level the outlook on the USD should shift to constructive.The index has so met a tough barrier in the 97.70 region, where sits the key 200-day SMA and so far yearly highs. A breakout of this area on a convincing fashion should expose a Fibo retracement of the 2017-2018 drop and the 100-day SMA, 97.87 and 97.88, respectively. The inability of DXY to surpass recent tops – ideally in the near-term horizon – carries the potential to trigger some disappointment among bulls and therefore favour some consolidation ahead of a potential correction lower. DXY daily chart  

In its latest Industrial Trends Survey, the Confederation of British Industry reported that the headline Manufacturing Order Book Balance improved to

In its latest Industrial Trends Survey, the Confederation of British Industry reported that the headline Manufacturing Order Book Balance improved to -22 in January from -28 in December. This reading came in slightly better than the market expectation of -23. Further details of the report showed that the Manufacturing Output Expectations rose to its highest reading since July at +4 and the Quarterly Business Situation Index jumped to its best level in more than five years at +23 from -44 in October. The British pound gathered strength against its rivals on the upbeat data and the GBP/USD was last seen trading at 1.3078, adding 0.25% on a daily basis.

The downside momentum in EUR/JPY has apparently run out of steam in the 121.80 region, coincident with the 21-day SMA. In case buyers regains control,

The leg lower in EUR/JPY looks contained near 121.80.Further south emerges the 200-day SMA at 120.87.The downside momentum in EUR/JPY has apparently run out of steam in the 121.80 region, coincident with the 21-day SMA. In case buyers regains control, there are no hurdles of note until last week’s 2020 highs in the vicinity of 122.90. However, should the selling bias resume, then the 121.05/120.87 band should come into focus, where coincide the 55-day and 200-day SMAs. The continuation of the downtrend is also favoured by the divergence in the daily RSI. EUR/JPY daily chart  

United Kingdom CBI Industrial Trends Survey - Orders (MoM) came in at -22, above expectations (-23) in January

The NZD/USD pair struggles to stage a technical recovery and trades below the 0.6600 handle on Wednesday. As of writing, the pair was down 0.05% on th

US Dollar Index stays in consolidation phase above 97.50.US Pres. Trump criticizes Federal Reserve's monetary policy. Coming up on Thursday: Fourth-quarter inflation report from New Zealand.The NZD/USD pair struggles to stage a technical recovery and trades below the 0.6600 handle on Wednesday. As of writing, the pair was down 0.05% on the day at 0.6592. The lack of significant macroeconomic data releases during the first half of the week allows major currency pairs to stay relatively quiet. During an interview on the sidelines of the World Economic Forum in Davos on Wednesday, US President Trump, once again, criticized the Federal Reserve's monetary policy. The GDP would be near 4% in 2019 if it weren't for the Fed's wrong decisions on interest rates, Trump argued. Nevertheless, the greenback largely ignored Trump's comments and continues to move sideways above 97.50 for the third straight day. Eyes on New Zealand inflation In the early trading hours of the Asian session on Thursday, Statistics New Zealand will release the Consumer Price Index (CPI) data for the fourth quarter, which is expected to rise to 1.8% on a yearly basis from 1.5%.  Previewing the data, "we expect a 0.4% rise in the Consumers Price Index (CPI) for the December quarter, with annual inflation lifting to 1.8%," said Westpac analyst Michael Gordon. "Our forecast is higher than the Reserve Bank’s estimate, though the difference is on the more transitory tradables side of the CPI." Technical levels to watch for  

Following the previous session's brief pause, the USD/JPY pair regained some positive traction on Wednesday and remained well within the striking dist

USD/JPY manages to regain some positive traction on Wednesday.Bulls might aim towards multi-month ascending trend-line resistance.Following the previous session's brief pause, the USD/JPY pair regained some positive traction on Wednesday and remained well within the striking distance of multi-month tops set last week. Given that the overnight modest pullback attracted some dip-buying near the 109.70 strong horizontal resistance breakpoint now turned support, the set-up remains tilted in favour of bullish traders. This coupled with the fact that the pair remains above important moving averages – 50, 100 & 200-day SMA – adds credence to the bullish outlook and support prospects for additional gains. Meanwhile, technical indicators on the daily chart have been retreating from recent high but have still managed to hold in the positive territory, reinforcing the near-term constructive set-up. However, oscillators on hourly charts now seemed struggling to gain any meaningful traction and warrant some caution before placing aggressive bets for any further appreciating move. Hence, it will be prudent to wait for some follow-through buying beyond the 110.20-30 region, above which the pair might aim towards the 111.00 handle – a five-month-old ascending trend-line. On the flip side, the 109.70 region might continue to protect the immediate downside, which if broken might negate the near-term bullish bias and prompt some aggressive long-unwinding trade. The pair then might accelerate the corrective slide further towards the 109.35 intermediate horizontal support before eventually dropping to 50-day SMA en-route the 109.00 round-figure mark. USD/JPY daily chart  

If the United States can't make a deal with the European Union, a 25% tariff will have to be imposed on the European car imports, US President Donald

If the United States can't make a deal with the European Union, a 25% tariff will have to be imposed on the European car imports, US President Donald Trump told Fox Business News in an interview on the sidelines of the World Economic Forum in Davos on Wednesday. Following these comments, the Euro Stoxx 50 Index edged lower and was last down 0.12% on the day while Germany's DAX and the UK's FTSE 100 were still up 0.08% and 0.2%, respectively. 

During an interview on the sidelines of the World Economic Forum in Davos, US President Donald Trump said more tax cuts, a healthcare plan and more tr

During an interview on the sidelines of the World Economic Forum in Davos, US President Donald Trump said more tax cuts, a healthcare plan and more trade deals will be coming ahead. "We are going to be doing a middle-class tax cut, a very big one. We'll be announcing that over the next 90 days," Trump added. Commenting on the Federal Reserve's monetary policy, " The GDP would be near 4% if it weren’t for the Fed. Fed raising rates was a big mistake," Trump said. Markets don't seem to be reacting to these comments with the 10-year US Treasury bond yield staying flat on the day near 1.778%. 

The GBP/USD pair traded with a mild positive bias for the third consecutive session on Wednesday. Bulls still await a sustained move beyond the top en

GBP/USD trades with a mild positive bias for the third consecutive session on Wednesday.Sustained move beyond 1.3100 handle should pave the way for a further appreciating move. The GBP/USD pair traded with a mild positive bias for the third consecutive session on Wednesday. Bulls still await a sustained move beyond the top end of a three-week-old descending trend-channel. This is closely followed by 200-period SMA on the 4-hourly chart, around the 1.3100 round-figure mark, which if cleared should pave the way for a further near-term appreciating move for the major. Meanwhile, technical indicators on hourly charts have managed to hold in the bullish territory and should be seen as a positive trigger for bullish traders, supporting prospects for additional gains. However, oscillators on the daily chart are yet to catch up with the recent positive move or gain any meaningful traction and warrant some caution for bulls amid increasing odds of a BoE rate cut. Having said that, the pair is likely to aim towards testing its next resistance near the 1.3165-70 region ahead of the 1.3200 round-figure mark on a sustained move beyond the 1.3100 round-figure mark. On the flip side, the 1.3035 region now seems to protect the immediate downside, below which the pair might turn vulnerable and accelerate the slide further towards the key 1.30 psychological mark. GBP/USD 4-hourly chart  

The UK Finance Minister Sajid Javid is on the wires now, via Reuters, speaking alongside the US Treasury Secretary Mnuchin and International Monetary

The UK Finance Minister Sajid Javid is on the wires now, via Reuters, speaking alongside the US Treasury Secretary Mnuchin and International Monetary Fund (IMF) Chief Georgieva in a panel discussion on ‘the Future of Financial Markets’. Key Quotes: Trade deal with the EU can absolutely be done before the year-end. Deal can be done both on goods and services. Nothing earth-shaking from the UK Finance Minister and therefore the GBP/USD pair continues to waver in familiar ranges around the midpoint of the 1.30 handle.

US focused on Phase One deal implementation over the next 30 days. There are no deadlines for Phase Two deal. Says Trump tariffs have been a big ince

US Treasury Secretary Mnuchin is on the wires now, via Reuters, throwing fresh light on the US-China trade deal while speaking at the World Economic Forum (WEF) in Davos. Key Quotes: US focused on Phase One deal implementation over the next 30 days. There are no deadlines for Phase Two deal. Trump tariffs have been a big incentive in getting a deal done with China. USTR: US tariff reduction in China phase one to take effect Feb. 14 - Bloomberg US Pres. Trump: Fed raising rates was a big mistake USD/JPY remains positive and still sees a move to 110.67 – UOB

Gold reversed an early dip to the $1550 region and is currently placed near the top end of its daily trading range, albeit remained well below two-wee

Gold on Wednesday showed some resilience at lower levels.Stronger USD, US bond yields might keep a lid on the uptick.Gold reversed an early dip to the $1550 region and is currently placed near the top end of its daily trading range, albeit remained well below two-week highs set in the previous session. Following an early uptick on Tuesday, the precious metal witnessed an intraday turnaround and dropped to near one-week lows. A late pick up in the US dollar demand was seen as one of the key factors that prompted some selling around the dollar-denominated commodity. However, a weaker tone surrounding the US equity markets extended some support to traditional safe-haven assets and helped the precious metal to bounce off daily lows. The commodity finally settled with only modest losses, albeit lacked any strong follow-through momentum. As investor assessed the risk of the outbreak of a new coronavirus in China, improving global risk sentiment pushed the US Treasury bond yields higher and exerted some fresh pressure on the non-yielding yellow metal through the early part of Wednesday's trading action. The commodity, however, showed some resilience at lower levels and largely shrugged off the prevailing negative factors. Meanwhile, the uptick lacked any obvious catalyst and thus, runs the risk of fizzling out rather quickly in the absence of any market-moving US economic data. Technical levels to watch  

According to Bloomberg, the US Trade Representative (USTR) posted notice of tariff reduction in the Federal (Fed) register. Further Details: US tariff

According to Bloomberg, the US Trade Representative (USTR) posted notice of tariff reduction in the Federal (Fed) register. Further Details: US tariff reduction in China phase one to take effect Feb. 14. Tariff reduction notice matches expectations under phase 1 deal. The risk sentiment appears stable amid China's transparent response to the virus outbreak and incoming reports of the first case of the coronavirus reported in Hong Kong. USD/JPY hovers below 110.00 while the Aussie remains capped below 0.6850. 

While speaking in an interview on Wednesday, US President Trump said that the Federal Reserve (Fed) raising rates was a big mistake.

While speaking in an interview on Wednesday, US President Trump said that the Federal Reserve (Fed) raising rates was a big mistake. Additional Quotes: Dow Jones index would be up 10,000 points if it weren't for the Fed. Would be surprised if tariffs are needed on Europe.

United Kingdom Public Sector Net Borrowing below expectations (£4.6B) in December: Actual (£4.04B)

Japan’s Cabinet Office is out with its latest monthly economic assessment report for January, which showed a slightly softer assessment than in Decemb

Japan’s Cabinet Office is out with its latest monthly economic assessment report for January, which showed a slightly softer assessment than in December, when it said capex was increasing moderately but with weakness seen in machinery investment. Key Quotes: “The economy is recovering at a moderate pace, while it is showing weakness centered on manufacturers ... amid continued softness in exports. Capital spending was on the trend of moderate increase but it showed some weakness. Weak external demand weighed on factory output, which prompted companies to rein in capital spending. The government maintained its view on factory output, saying it was “weakening further”. It also said exports were weakening. The economy was expected to continue recovering moderately thanks to government stimulus measures, with the labor and wage environments improving, although weakness remains. The government will closely watch the prospects for China’s economy, Brexit and the situation in the Middle East, which could impact on financial markets, as well as the impact of Japan’s sales tax hike.” FX Implications: The Japanese government’s economic assessment had little to no impact on the local currency, as the yen extends its latest uptick across the board. The USD/JPY pair is seen tracking the retreat in the S&P 500 futures and Treasury yields, now trading with small gains at 109.95.

Australia and New Zealand Banking Group (ANZ) analysts express their take on the Malaysian Central Bank’s surprise rate cut announcement earlier on We

Australia and New Zealand Banking Group (ANZ) analysts express their take on the Malaysian Central Bank’s surprise rate cut announcement earlier on Wednesday, in an effort to safeguard growth. Key Quotes: “Bank Negara Malaysia (BNM) cut its Overnight Policy Rate (OPR) by 25bps to 2.75% today. The cut, which was against the consensus view, has brought the OPR to its lowest level since 2011. Despite sounding more upbeat on both global and domestic growth prospects, BNM cut the policy rate as a “pre-emptive measure to secure the improving growth trajectory”. Given the front-loaded cut today, we expect no further changes to the policy rate in 2020.”

Traders scaled back their open interest positions for the second session in a row on Wednesday, this time by around 1.9K contracts, according to the p

Traders scaled back their open interest positions for the second session in a row on Wednesday, this time by around 1.9K contracts, according to the preliminary report from CME Group. Volume, instead, rose by nearly 53.3K contracts, extending the choppy performance for yet another session. Copper could see YTD lows retestedCopper prices are extending the leg lower on Wednesday following Tuesday’s drop in open interest. While further decline is not ruled out, the area of yearly lows in sub-2.76 levels is expected to act as a strong support in the short-term horizon.

The USD/CAD pair edged higher on Wednesday and climbed to near two-week tops, albeit struggled to capitalize on the momentum and failed ahead of the 1

USD/CAD gains some traction amid stronger USD, sliding oil prices.The upside remains capped ahead of the BoC monetary policy update.The USD/CAD pair edged higher on Wednesday and climbed to near two-week tops, albeit struggled to capitalize on the momentum and failed ahead of the 1.3100 round-figure mark. The pair gained some follow-through traction for the second consecutive session on Wednesday and was being supported by a combination of factors – broad-based US dollar strength and a weaker tone surrounding crude oil prices. Bulls seemed reluctant ahead of BoC The greenback remained supported by expectations that the US economy will continue to expand and diminishing odds for any further rate cuts by the Fed. The bullish sentiment got an additional boost from a goodish intraday pickup in the US Treasury bond yields. The pair was further supported by a modest pullback in oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. In fact, oil prices fell around 0.5% on Wednesday in the wake of the International Energy Agency's (IEA) forecast of a market surplus in the first half of this year. Despite the positive factors, the uptick lacked any strong bullish conviction and remained capped below monthly swing highs, around the 1.3100 handle, as investors seemed reluctant to place aggressive bets ahead of the latest BoC monetary policy update later this Wednesday. Ahead of the key event risk, the release of the latest Canadian consumer inflation figures might further contribute towards providing some short-term trading impetus during the early North-American session amid absent relevant market-moving economic data from the US. Technical levels to watch  

Italy Industrial Orders n.s.a (YoY) below forecasts (-2.4%) in November: Actual (-4.3%)

Italy Industrial Orders s.a (MoM) below forecasts (0%) in November: Actual (-0.3%)

Italy Industrial Sales n.s.a. (YoY) came in at 0.1%, above forecasts (-0.4%) in November

Italy Industrial Sales s.a. (MoM) above forecasts (-0.8%) in November: Actual (0%)

In light of preliminary readings for Crude Oil futures markets from CME Group, open interest shrunk for the second straight session, now by 1.7K contr

In light of preliminary readings for Crude Oil futures markets from CME Group, open interest shrunk for the second straight session, now by 1.7K contracts. On the other hand, volume rose by nearly 374.3K contracts for the first time after seven consecutive drops. WTI remains supported by the 200-day SMA Prices of the WTI keep the consolidative mood on Wednesday amidst the recent build in volume and lower open interest. That said, the key 200-day SMA in the $57.60 region is expected to remain a solid contention for the time being.

The outlook on USD/JPY remains constructive in the near term and still eyes a move to the 110.70 region, suggested FX Strategists at UOB Group. Key Qu

The outlook on USD/JPY remains constructive in the near term and still eyes a move to the 110.70 region, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “The sudden and relatively sharp decline in USD yesterday came as a surprise. The rapid drop has shifted the immediate risk to the downside even though it is premature to expect the start of trending down-move. From here, barring a move back above 110.15, USD could grind lower even though the strong support at 109.45 is not expected to come into the picture (minor support is at 109.65).” Next 1-3 weeks: “After breaking above the major 109.75 resistance earlier last week, the gain made by USD has been relatively modest as it touched 110.28 last Friday. Despite the lack of ‘urgency’ after breaking a major resistance, the risk is still clearly on the upside. However, the lackluster price action suggests the prospect for a sustained rise above the next strong resistance at 110.67 is not high. On the downside, only a breach of 109.45 (no change in ‘strong support’ level) would indicate the current USD strength has run its course."

The offered bias remains well and sound around the single currency so far on Wednesday, with EUR/USD inching lower o the 1.1080/75 band following the

EUR/USD trades on the defensive in the 1.1080/75 band.The dollar picks up pace and approaches YTD highs.French Business Survey ticked higher to 100 in January.The offered bias remains well and sound around the single currency so far on Wednesday, with EUR/USD inching lower o the 1.1080/75 band following the opening bell in Euroland. EUR/USD focused on risk trends, data The pair is losing ground for the second session in a row on Wednesday and is flirting with the area of yearly lows in the 1.1080/75 band, always on the back of some mild recovery in the greenback. In the broader scenario, investors keep paying attention to the risk-appetite trends, developments from the Chinese outbreak of the Wuhan coronavirus and upcoming negotiations of the US-China’s ‘Phase 2’ trade deal. Data wise in Euroland, the French Business Survey improved to 100 in January, although it came in a tad below estimates (101 exp.). Later in the session, Italy will publish results from the industrial sector. Across the pond, weekly Mortgage Applications are due seconded by the Chicago Fed Activity index, Existing Home Sales and the API’s report on US crude oil supplies. What to look for around EUR The pair remains under pressure near yearly lows in the 1.1080 region, always looking to USD-dynamics as the almost exclusive driver for the price action. In the meantime, markets’ attention has now shifted to a more data-dependent stance while the US-China trade front remains muted for the time being. On the more macro view, the slowdown in the region remains far from abated despite some positive results as of late in Germany and the euro area and continues to justify the ‘looser for longer’ monetary stance from the ECB, which is expected to maintain the current ‘wait-and-see’ stance, at least in the near-term, as per the recently published minutes (Accounts) from the December meeting. EUR/USD levels to watch At the moment, the pair is losing 0.04% at 1.1077 and a breakdown of 1.1075 (weekly/2020 low Jan.22) would target 1.1067 (100-day SMA) en route to 1.1039 (low Dec.6 2019). On the flip side, the next hurdle emerges at 1.1133 (200-day SMA) followed by 1.1172 (weekly high Jan.16) and finally 1.1186 (61.8% of the 2017-2018 rally).

Christian Lawrence, Senior Market Strategist at Rabobank, offered a preview of Wednesday's key event risk – the latest monetary policy update by the B

Christian Lawrence, Senior Market Strategist at Rabobank, offered a preview of Wednesday's key event risk – the latest monetary policy update by the Bank of Canada (BoC) – and near-term outlook for the USD/CAD pair. Key Quotes: “We expect the Bank of Canada to leave the policy rate unchanged at 1.75% on 22nd January. This is unanimously expected by the analysts surveyed by Bloomberg (including ourselves) and CAD OIS implies almost no chance of a move. There is only around a 50% chance of a 25bp cut pencilled in by the end of 2020. We remain of our long held (since the 2019 H1) view that the BoC will begin easing rates in 2020 Q2.” “That said, our projected easing path for 2020 (three 25bp cuts) is predicated on RaboResearch’s expectation that the Fed will begin easing in April and continue to 0%. The big question mark for Canadian activity remains consumption. In 2019, our expectation of weak investment and trade was proven correct but households held up better than we envisaged. In 2020, we still expect soft investment and trade, and we do see a softer consumer sector igniting the BoC’s easing bias.” “In terms of USD/CAD, we have revised down our call for a 1.32-1.34 range to 1.30-1.32 which we expect to dominate price action in the coming months. As we move into Q2 there is room for a test of 1.33 but we expect a move back to 1.32 as we head into the middle of the year.”

The USD/JPY pair managed to catch some fresh bids on Wednesday, albeit seemed struggling to extend the momentum further beyond the key 110.00 psycholo

USD/JPY regains some positive traction amid improving risk sentiment.The prevalent bullish tone surrounding the USD remained supportive.The USD/JPY pair managed to catch some fresh bids on Wednesday, albeit seemed struggling to extend the momentum further beyond the key 110.00 psychological mark. As investors assessed the risk of the outbreak of a new coronavirus in China, improving global risk sentiment undermined demand for traditional safe-haven assets – including the Japanese yen – and helped the pair to regain some positive traction on Tuesday. USD/JPY supported by fading safe-haven demand/stronger USD The risk-on flow was evident from a positive mood around equity markets. The same was further reinforced by a goodish pickup in the US Treasury bond yields, which provided a goodish lift to the US dollar and remained supportive of the bid tone surrounding the major. Despite the positive factors, the intraday uptick lacked any strong bullish conviction amid absent relevant fundamental catalyst. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move. In absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair's momentum and produce some short-term trading opportunities on Wednesday. Technical levels to watch  

The Bank of England (BOE) Governor Carney is on the wires now, via Reuters, making a scheduled speech on climate change at the World Economic Forum (W

The Bank of England (BOE) Governor Carney is on the wires now, via Reuters, making a scheduled speech on climate change at the World Economic Forum (WEF) in Davos this Wednesday. The outgoing BOE Governor mentioned nothing about the monetary policy or economic outlook in his speech. Key Quotes: Climate is becoming a vector for investment. Climate transition risk is becoming more important. GBP/USD: A move to 1.2865 is not ruled out – Commerzbank

South Africa Consumer Price Index (MoM) meets forecasts (0.3%) in December

South Africa Consumer Price Index (YoY) meets forecasts (4%) in December

Having reached a one-week high on Tuesday, USD/INR holds the higher ground while consolidating above the 71 level so far this Wednesday. The spot is s

USD/INR cheers USD strength, ebbing fears of the China virus spread.Weaker Indian stocks offset the impact of falling oil prices on the rupee. Focus shifts to US macro news amid risk recovery. Having reached a one-week high on Tuesday, USD/INR holds the higher ground while consolidating above the 71 level so far this Wednesday. The spot is seen wavering back and forth in a 10-pips narrow range around 71.20 region, with the downside cushioned by broad-based US dollar strength, as the risk sentiment improves amid subsiding fears over China’s coronavirus outbreak. Meanwhile, falling Indian stocks amid dwindling domestic growth prospects and increasing stagflation risks weigh on the rupee, in turn, supporting the upbeat tone seen around the cross. However, USD/INR is seen struggling to extend the upside, as the oil-price weakness comes to the rescue of the INR bulls. The black gold remains under pressure amid expectations of ample global supply. Looking ahead, the bullish bias remains intact for the pair as long as it holds above the 71 handle, as Indian traders now eagerly await India's federal budget due on Feb. 1 for fresh direction. In the meantime, the spot will take cues from the broader market sentiment and the upcoming US housing data. USD/INR Technical levels to consider
 

France Business Climate below forecasts (101) in January: Actual (100)

The AUD/USD pair remained depressed and dropped to fresh six-week lows during the Asian session on Wednesday, albeit managed to recover few pips there

AUD/USD drifted lower for the fifth straight session on Wednesday.Concerns over coronavirus continued to weigh on the China-proxy aussie.The prevalent USD bullish bias further added to the selling pressure.The AUD/USD pair remained depressed and dropped to fresh six-week lows during the Asian session on Wednesday, albeit managed to recover few pips thereafter. The pair added to its recent losses and witnessed some follow-through selling for the fifth consecutive session on Wednesday. Concerns over the outbreak of a new coronavirus in China turned out to be one of the key factors exerting pressure on the China-proxy Australian dollar. Aussie weighed down by a combination of factors This coupled with the prevailing bullish sentiment surrounding the US dollar further collaborated to the pair's slide to the lowest level since December 11. The greenback remained supported by fading prospects of any further rate cut by the Fed and got an additional boost from a goodish pickup in the US Treasury bond yields. However, a recovery in the global risk sentiment, as depicted by a positive trading mood around equity markets, extended some support to perceived riskier currencies – including the aussie – and helped limit deeper losses, at least for the time being. Moving ahead, there isn't any major market-moving economic data due for release from the US. Hence, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair's intraday momentum on Wednesday. Technical levels to watch  

South Korea Gross Domestic Product Growth (QoQ) above expectations (0.8%) in 4Q: Actual (1.2%)

Moody’s Investors Service, in its latest report released on Wednesday, cites the impact of the US-China phase one trade deal on the US-China financial

Moody’s Investors Service, in its latest report released on Wednesday, cites the impact of the US-China phase one trade deal on the US-China financial sectors. Key Quotes: “US-China trade deal positive for selected financial services providers in both countries. Trade deal significantly liberalizes the ability of foreign financial institutions to set up majority-owned or wholly owned subsidiaries in China. US-China phase one trade deal eliminates a number of entry barriers for the US financial institutions.”

In spite of the recent recovery, Cable could still slip back and test the 1.2865 level, suggested Karen Jones, Team Head FICC Technical Analysis Resea

In spite of the recent recovery, Cable could still slip back and test the 1.2865 level, suggested Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank. Key Quotes “GBP/USD saw a fairly decent recovery yesterday. We remain unable to dismiss a slide to the 1.2865 uptrend. On route lies the December low at 1.2908. A close above 1.3118 (17th January high) is required to alleviate immediate downside pressure and retarget the Fibonacci resistance at 1.3285.” “Failure at the 4 month uptrend at 1.2865 would put the 200 day moving average at 1.2688 back on the plate.”

If the selling impetus picks up extra pace, AUD/USD is expected to meet solid contention in the 0.6790 region, according to FX Strategists at UOB Grou

If the selling impetus picks up extra pace, AUD/USD is expected to meet solid contention in the 0.6790 region, according to FX Strategists at UOB Group. Key Quotes 24-hour view: “Expectation for a stronger recovery in AUD was incorrect as it slumped and edged below the strong 0.6850 support (overnight low of 0.6842). While downward momentum is patchy at best, AUD could continue to edge lower even though the major support at 0.6820 is unlikely to come under threat. On the upside, only a move above 0.6870 would suggest the current mild downward pressure has eased.” Next 1-3 weeks: “While AUD breached 0.6849 yesterday (21 Jan), the price action lacks ‘spark’ and downward momentum has not improved by much. That said, the odds for AUD to move below 0.6820 have increased even though there is another solid support at 0.6790. Taking a step back, we have viewed the price action in AUD since early January as ‘part of a corrective pullback and not a major reversal’. The pullback appears to be over-extended and for now, a clear break of 0.6790 would come as a surprise. All in, AUD is expected to stay on the back foot unless it can reclaim 0.6900 (‘strong resistance’ level was at 0.6935 previously).”

According to flash data from CME Group for Gold futures markets, traders added 886 contracts to their open interest positions on Tuesday, recording th

According to flash data from CME Group for Gold futures markets, traders added 886 contracts to their open interest positions on Tuesday, recording the second – albeit small – build in a row. Volume, too, rose for another session, this time by around 229.5K contracts. Gold could test the $1,536/32 area The ounce troy of Gold keeps correcting lower on Wednesday following Tuesday’s pullback against the backdrop of increasing open interest and volume. With this in mind, the $1,536/32 band could be revisited in the near-term horizon, where coincide last week’s low and a Fibo retracement of the December rally.

Latest headlines are crossing the wires, via Reuters, citing that US Senate has approved the Republican plan and set rules for the impeachment trial o

Latest headlines are crossing the wires, via Reuters, citing that US Senate has approved the Republican plan and set rules for the impeachment trial of US President Trump.

Morten Lund, Analyst at Nordea Markets, argues that “market expectations for a January cut have rapidly increased, but it is not yet a done deal.” Key

Morten Lund, Analyst at Nordea Markets, argues that “market expectations for a January cut have rapidly increased, but it is not yet a done deal.” Key Quotes: “Carney’s last BoE meeting will instead be like Christmas for central bank watchers. We give you the arguments for and against a cut. We expect BoE on hold. Three factors make us go with unchanged rates in January of which a predicted PMI rebound on Friday is the main reason. Moreover, the timing of a potential rate cut would be at odds with Brexit happening the day after and the BoE’s reaction function post the Brexit referendum. Only a small PMI rebound would make us go with a rate cut instead. If market pricing is >70% for a rate cut, the BoE should deliver. If the BoE cuts in January, this should not be perceived as the beginning of a big easing cycle. Risk-reward favors a slightly stronger GBP and higher Gilt yields in the coming week. On a 3-6-month horizon, however, we do expect the GBP to weaken.”

In light of the recent price action, the pair is likely to hold over the 1.1070 region, in opinion of Karen Jones, Team Head FICC Technical Analysis a

In light of the recent price action, the pair is likely to hold over the 1.1070 region, in opinion of Karen Jones, Team Head FICC Technical Analysis at Commerzbank. Key Quotes “EUR/USD has sold off towards and is holding over the uptrend at 1.1071. The intraday Elliott wave signals remain slightly negative but ideally this trend line will continue to hold.” “Overhead the market is facing tough resistance at 1.1184-1.1240 – namely the 55 week ma, the 2019-2020 down channel and the recent high. This guards the 200 week ma at 1.1359, which continues to represent a critical break point medium term.”

Cable could still grind lower to the mid-1.2900s despite the selling pressure seems to have lost some momentum, suggested FX Strategists at UOB Group.

Cable could still grind lower to the mid-1.2900s despite the selling pressure seems to have lost some momentum, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We held the view yesterday that the ‘combination of waning momentum and oversold conditions suggest GBP has moved into a correction phase’. However, instead of ‘edging higher’, GBP surged above the 1.3045 resistance and touched an overnight high of 1.3083. The rapid rise appears to be over-extended and further sustained GBP strength is not expected. From here, GBP is more likely to consolidate its gains and trade sideways. Expected range for today, 1.3020/1.3090.” Next 1-3 weeks: “We highlighted on Monday (20 Jan, spot at 1.3005), despite the sharp decline from last Friday’s 1.3120 peak, ‘downward momentum has not improved by much’. However, we held the view that GBP ‘could dip below 1.2955’. GBP soared by +0.29% yesterday (21 Jan) and touched 1.3083, just below our ‘strong resistance’ level of 1.3090. While downward pressure has eased considerably, only a breach of 1.3090 would indicate that GBP has moved into a sideway-trading phase. Until then, there is still a slim chance that GBP could dip below 1.2955.”

FX option expiries for Jan 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - GBP/USD: GBP amounts 1.3000 202m 1.3050 271m - USD/JPY: US

FX option expiries for Jan 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - GBP/USD: GBP amounts 1.3000 202m 1.3050 271m - USD/JPY: USD amounts 108.50 1.3bn 109.25 385m 109.50 950m 110.00 440m - AUD/USD: AUD amounts 0.6780 516m  - USD/CAD: USD amounts 1.3100 530m - EUR/GBP: EUR amounts 0.8400 1.3bn

Open interest in JPY futures markets rose by 7.6K contracts on Tuesday according to advanced figures from CME Group. In the same line, volume reversed

Open interest in JPY futures markets rose by 7.6K contracts on Tuesday according to advanced figures from CME Group. In the same line, volume reversed three consecutive daily drops and increased by nearly 82.1K contracts. USD/JPY still targets the 110.70 region Despite the negative price action on Tuesday, USD/JPY managed to rebound from daily lows amidst rising open interest and volume in the Japanese currency. That said, the rebound carries the potential to extend further north of the 110.00 mark and resume its march to the next target at the 110.65/70 band.

EUR/USD is trading below 1.11, struggling to recover despite a relatively calm upbeat market mood and ahead of the European Central Bank's decision. T

EUR/USD is trading below 1.11, struggling to recover despite a relatively calm upbeat market mood and ahead of the European Central Bank's decision.   The Technical Confluences Indicator is showing that euro/dollar is capped at 1.1196, which is the convergence of the Bollinger Band 1h-Middle, the Fibonacci 61.8% one-month, and the Fibonacci 23.6% one-day.  It is followed by several clusters of technical levels with the most substantial one awaiting at 1.1154, which is where the Pivot Point one-week Resistance 1 and the Fibonacci 38.2% one-month meet up.  Support awaits at 1.1068, which is the confluence of the Bollinger Band one-day Lower, the PP one-day Support 2, and the PP one-month S1.  The next noteworthy cushion is at 1.1005, and it is weak – the previous month's low.  Overall, resistance lines are stronger than support ones, indicating that the downside is more appealing.  Here is how it looks on the tool: Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas. Learn more about Technical Confluence

Karen Jones, Team Head FICC Technical Analysis at Commerzbank, suggested the pair could advance to the 0.9762 level if manages to clear 0.9692. Key Qu

Karen Jones, Team Head FICC Technical Analysis at Commerzbank, suggested the pair could advance to the 0.9762 level if manages to clear 0.9692. Key Quotes “USD/CHF is eroding its two month downtrend line at .9692 and as a precaution we have exited our short positions. A break above here will target the .9762 10th January peak and possibly the 55 day ma at .9822. Dips will find minor support at .9660.” “Above .9762 would suggest a retest the .9841/44 resistance (September and October lows).”

Speaking in parliament on Wednesday, Japanese PM Shinzo Abe said the Japanese economy is gradually recovering, backed by the domestic demand. Key Quot

Speaking in parliament on Wednesday, Japanese PM Shinzo Abe said the Japanese economy is gradually recovering, backed by the domestic demand. Key Quotes: It is necessary to take measures against downside risks from overseas. To set the path for economic revival after the Olympics. USD/JPY struggles hard to extend the bounce above the 110 level, helped by the rebound in the Asian equities amid receding fears over the coronavirus outbreak.

FX Strategists at UOB Group noted that further decline in EUR/USD is likely to meet solid contention in the 1.1030 region. Key Quotes 24-hour view: “W

FX Strategists at UOB Group noted that further decline in EUR/USD is likely to meet solid contention in the 1.1030 region. Key Quotes 24-hour view: “We highlighted yesterday that downward pressure eased but ‘it is too early to expect a sustained recovery’. EUR subsequently traded between 1.1079 and 1.1118, relatively close to our expected sideway-trading range of 1.1075/1.1115. While the retreat from 1.1118 has weakened the underlying tone, any down-move in EUR is expected to encounter strong support at 1.1065. An intraday dip below this level is not ruled out but for today, a sustained decline is unlikely (the next support at 1.1030 is not expected to come into the picture). On the upside, only a move back above 1.1115 would indicate the current mild downward pressure has eased.” Next 1-3 weeks: As highlighted, there is scope EUR to dip below the strong 1.1065 support but the current weakness Is not viewed as part of a trending down-move and the next support at 1.1030 is likely strong enough to hold any further decline. Taking a step back, we have noted on 03 Jan that EUR ‘is likely in the early stages of a corrective pullback’. From here, the pullback has room to extend lower but lackluster momentum suggests EUR could stabilize ahead of 1.1030. Only a clear break of 1.1030 would increase the risk of a more sustained decline. On the upside, a move above 1.1150 (no change in ‘strong resistance’ level) would suggest the current weakness has stabilized.”

Here is what you need to know on Wednesday, January 22: The coronavirus continues spreading and remains in the spotlight. The report of the first case

Here is what you need to know on Wednesday, January 22: The coronavirus continues spreading and remains in the spotlight. The report of the first case of the respiratory disease in the US triggered a risk-off atmosphere but China managed to soothe tensions. At a press conference, authorities in the second-largest economy shed light on the situation, saying they are taking measures. USD/JPY and Asian stocks are on the rise.Brexit: The Telegraph is reporting that the EU will propose the UK worse conditions than it previously offered Canada and Japan. GBP/USD has shrugged off the report and the pound remains bid after Tuesday's release of upbeat wage figures. The Canadian dollar is set to move later in the day. Consumer prices' figures are forecast to show healthy inflation. It is shortly followed by the Bank of Canada's rate decision. The BOC will likely leave rates unchanged but Governor Stephen Poloz and his colleagues will likely acknowledge the improvement in the global mood. See BOC Preview: Rewards of economic patience. The Australian dollar remains on the back foot after Westpac Consumer Sentiment dropped by 1.8% and ahead of the all-important jobs report. EUR/USD: The European Central Bank is also on course to leave rates unchanged in its decision on Thursday and may also provide a more upbeat assessment of the inflation and growth outlooks. The ZEW Economic Sentiment data for January beat expectations. In the meantime, EUR/USD has been struggling to hold onto 1.11. See ECB Preview: Glass half green or a Lagarde drag on EUR/USD? Three scenariosCryptocurrencies are stable, with Bitcoin trading above $8,700.   

CME Group’s preliminary prints for GBP futures markets noted open interest shrunk by nearly 3.1K contracts on Tuesday. Volume, instead, increased for

CME Group’s preliminary prints for GBP futures markets noted open interest shrunk by nearly 3.1K contracts on Tuesday. Volume, instead, increased for the second consecutive session, now by around 41.5K contracts. GBP/USD could test 1.3120, recent topsCable is trading on a positive footing so far this week. Tuesday’s advance, however, was on the back of declining open interest, hinting at the likeliness that the move up could be running out of steam. That said, the immediate target emerges at last week’s tops around 1.3120, where it is expected to meet strong resistance.

Senior Economist at UOB Group Alvin Liew assessed the recent BoJ event. Key Quotes “The Bank of Japan (BOJ) kept its monetary policy stance, policy ra

Senior Economist at UOB Group Alvin Liew assessed the recent BoJ event. Key Quotes “The Bank of Japan (BOJ) kept its monetary policy stance, policy rate and forward guidance unchanged while at the same time maintained its assessment of the economy and revised higher the GDP growth forecasts but nudged the inflation projection lower yet again across the forecast period (FY 2019-FY2021).” “The BOJ’s projected GDP growth rates were revised slightly higher across the forecast period in line with the improved assessment of external risks.” “The BOJ was again less optimistic about prices and its CPI inflation point estimates and the forecast ranges were also adjusted lower for the forecast period with the point estimates revisions all lowered evenly by 0.1ppt. The effects of the consumption tax hike are still assumed to be “flushed out” by fiscal 2021 with CPI inflation now projected lower at 1.4% in fiscal year 2021 (from 1.5% previously), further away from the 2% target.” “The BOJ’s latest inaction came on the back of a record budget for fiscal year 2020 and a fiscal 2019 supplementary budget bill while the BOJ also had a somewhat improved outlook for the risks from overseas impacting Japan’s economy. However, the threat from overseas remains persistent and the outlook for Japan’s price outlook is still dismal and that BOJ’s continued forward guidance without action will not be sufficient. With the economic data turning south even with the temporary relief from the fiscal stimulus, the BOJ will eventually need to act. The question is when and how will the BOJ ease its already very easy monetary policy. We expect the BOJ to renew easing monetary policy via deepening its negative policy call rate to - 0.2% possibly in 1Q 2020 i.e. the March MPM (from -0.1% presently). And potentially other measures will follow if the domestic economic situation turns down further in 2020”.

EUR/GBP drops to the intra-day low of 0.8486 by the press time of the pre-European session on Wednesday.

EUR/GBP extends losses below 50-day SMA.38.2% Fibonacci retracement, monthly falling resistance line limit near-term recovery.0.8400 holds the key to the pair’s decline towards December low.EUR/GBP drops to the intra-day low of 0.8486 by the press time of the pre-European session on Wednesday. The quote registered a daily closing below 50-day SMA the previous day for the first time since January 10. As a result, traders are aiming to revisit an upward sloping trend line stretched since December 13, at 0.8468, a break of which will further drag the quote towards 23.6% Fibonacci retracement of the pair’s October-December 2019 declines, at 0.8454. Given the increased selling pressure past-0.8454, 0.8400 and the year-start bottom surrounding 0.8365 can please the bears ahead of pushing them to December month low of 0.8276. Meanwhile, buyers will wait for the pair’s daily closing above 50-day SMA level of 0.8509. In doing so, they will target a 38.2% Fibonacci retracement level of 0.8565 and descending trend line since December 25, at 0.8600. If at all the EUR/GBP prices manage to clear the 0.8600 mark, it becomes capable of challenging late-October tops near 0.8680. EUR/GBP daily chart Trend: Bearish  

In light of flash data for EUR futures markets from CME Group, investors added around 5.4K contracts to their open interest positions on Tuesday, reco

In light of flash data for EUR futures markets from CME Group, investors added around 5.4K contracts to their open interest positions on Tuesday, recording the second consecutive advance. Volume, in the same line, reversed the previous drop and rose significantly by near 100K contracts. EUR/USD faces a potential move to 1.1065EUR/USD’s negative price action on Tuesday was in tandem with rising open interest and volume, opening the door for the continuation of the correction lower to, initially, the 100-day SMA in the 1.1060 region.

China’s transparency and the announcement of measures to counter the coronavirus outbreak calmed unnerved markets and revived risk appetite in Wednesd

China’s transparency and the announcement of measures to counter the coronavirus outbreak calmed unnerved markets and revived risk appetite in Wednesday’s Asian trading. The Chinese stocks rebounded from YTD lows that led to a broad-based recovery in the regional indices. S&P 500 futures alongside US Treasury yields also firmed further while gold prices remained under pressure near $1550 levels.        Across the fx space, USD/JPY bounced-off lows near 109.80 and regained the 110 handle as the virus fears subsided. Meanwhile, the US dollar hovered near five-week highs across its main competitors. As a result, both EUR/USD and cable traded almost unchanged on their road to recovery. Despite risk reset, the Antipodeans and Chinese yuan failed to cheer up, as uncertainty over the lasting effect of the virus combined with worries over travel around the Chinese New Year remained a weight on the investors’ minds. USD/CAD advanced towards 1.3100 amid weaker oil prices, in the wake of the virus outbreak led worries over dwindling oil demand from China. Main Topics in Asia EU preparing to give UK worse trade deal terms than Canada or Japan – The Telegraph China offers assurance that US trade deal won’t hurt Europe – Caixin US Republicans blocked the Democrats' move to subpoena state department documents Australia: Consumer Sentiment falls further – Westpac Wuhancorona virus is likely to be mutated - The Global Times China National Health Commission’s Li: 440 confirmed cases as of end-Jan 21 in 13 provinces Bank Indonesia's Warjiyo: To continue accommodative monetary policy, USD/IDR hits five-day highs There is a possibility of virus mutation and a risk of further spread of the epidemic – Global Times China National Health Commission’s Jiao: Infection of medical staff in virus outbreak shows loopholes in treatment methods China’s NDRC Vice Chairman Ning: No date set for phase-two trade talks with the US - Bloomberg Key Focus Ahead        The risk sentiment will continue to be driven by the China virus updates and USD dynamics in the European session ahead, as the EUR docket lacks any relevant economic data release except for the second-tier UK Industrial Trends Survey – Orders for January. The data will drop in at 1100 GMT. Next of note remains the Canadian Consumer Price Index (CPI) and Wholesale Sales that will be published alongside the US Chicago National Fed Activity Index at 1330 GMT. Later in the American mid-morning, the US Existing Home Sales data will be reported at 1500 GMT. At the same time, the Bank of Canada (BOC) Interest Rate Decision will be announced. The BOC Governor Poloz’s press conference will soon follow at 1615 GMT. Meanwhile, the CAD traders will also look forward to the API Weekly Crude Oil Stock data, due at 2130 GMT, for fresh direction in oil prices. EUR/USD looks weak after rejection above 1.1100 EUR/USD is sidelined near 1.1080 ahead of the London open. Single currency failed to keep gains above 1.11 on Tuesday despite upbeat German data. The sentiment is quite bearish and a deeper drop to the 100-day average could be in the offing.   GBP/USD modestly flat around 1.3050 amid Brexit concerns, USD strength GBP/USD holds onto the recovery despite looming Brexit uncertainty and broad-based US dollar strength. EU is likely to offer a tough Brexit deal that increases the odds of harsh departure. Bank of Canada Rate Decision Preview: Rewards of Economic patienceOvernight rate expected to be unchanged after rate decision. Canadian economy projected to improve following US-China trade pact. BOC has the highest base rate of the seven major central banks. Oil could drop $3 if virus plays out like SARS – Goldman Sachs The US investment banking giant, Goldman Sachs, assesses the impact of a potential SARS-like epidemic on oil markets.  

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting give their opinions on the potential positive scenario for Malaysia this year. Key

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting give their opinions on the potential positive scenario for Malaysia this year. Key Quotes “A turnaround in global indicators coupled with receding risks following the signing of the US-China Phase One agreement, lower odds of a no-deal Brexit, and deescalation of US-Iran military tensions has fueled risk-on flows into emerging markets. With continued support from central bank liquidity and low interest rates, global growth remains supported albeit fragile.” “More positive are emerging signs that countries in the region particularly ASEAN has benefited from trade diversion flows and reorientation of supply chains since tensions between US and China started.” “Some early signs of a turnaround have emerged across Malaysia’s leading index, industrial output, trade, manufacturing and business sentiment surveys, wholesale and retail trade, and monetary indicators. These signals are encouraging though we are still cautious amid the fragile growth environment and lingering domestic political and policy uncertainties. As such, we still think there are grounds for Bank Negara Malaysia (BNM) to lower the policy rate by 25bps to 2.75% in 1Q 2020 to safeguard this year’s growth and bolster confidence.”

The greenback is prolonging the sidelined trading in the middle of the week, taking the US Dollar Index (DXY) to the 97.60 region. DXY still capped by

DXY remains sidelined below the 200-day SMA.Yields of the 10-year note rebound and approach 1.80%.Existing Home Sales, Chicago Fed index expected later.The greenback is prolonging the sidelined trading in the middle of the week, taking the US Dollar Index (DXY) to the 97.60 region. DXY still capped by the 200-day SMA The index keeps struggling for direction in the upper end of the weekly range, near 2020 highs although a breakout of the critical 200-day SMA in the 97.70 region still looks elusive. In the meantime, risk appetite trends continue to alternate along with developments from the recent outbreak of the Chinese Whuan coronavirus and the first confirmed case in the US (Seattle). On the trade front, President Trump said at his speech at the World Economic Forum in Davos on Wednesday that the relationship with China ‘has never been better’, at the same time suggesting that negotiations for the ‘Phase 2’ deal could start soon. Still with Trump, he stressed that the US could impose tariffs to EU cars if both parties fail to clinch a deal. Later in the NA session, the Chicago Fed Activity Index is due seconded by the more relevant Existing Home Sales for the month of December. What to look for around USD DXY keeps the weekly rangebound theme unchanged for the time being, and still targets the key 200-day SMA in the 97.70 zone. In the meantime, news from the Chinese coronavirus and uncertainty regarding the US-China ‘Phase 2’ deal underpin bouts of risk aversion and maintain the buck under some pressure. On another scenario, the index should regain the constructive view above the 200-day SMA, always supported by the current ‘wait-and-see’ stance from the Fed (confirmed once again at the latest FOMC minutes) vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’. US Dollar Index relevant levels At the moment, the index is gaining 0.02% at 97.62 and a breakout of 97.73 (2020 high Jan.20) would open the door to 97.87 (61.8% Fibo of the 2017-2018 drop) and then 98.54 (monthly high Nov.29 2019). On the other hand, the next support emerges at 97.09 (weekly low Jan.16) followed by 96.36 (monthly low Dec.31) and finally 96.04 (50% Fibo of the 2017-2018 drop).

With the recent outbreak of China’s coronavirus, traders are searching for clues as to how the markets reacted the last time such an event happened.

With the recent outbreak of China’s coronavirus, traders are searching for clues as to how the markets reacted the last time such an event happened. This helps analysts at the Australia and New Zealand Banking Group (ANZ) to come up with the report mentioning how the Australia dollar (AUD) reacted to the World Health Organization’s (WHO) statement on the Severe Acute Respiratory Syndrome (SARS) virus. Key quotes The outbreak of a coronavirus strain in the Chinese city of Wuhan has prompted a number of questions about the impact of the SARS virus on Australia in 2003. In undertaking this exercise, we are in no way implying that we think the Wuhan outbreak will unfold in anything like the same manner as SARS. The World Health Organisation (WHO) issued a SARS alert in March 2003. In looking through the rate charts for that year, what stands out is the sell-off that took place in a week or two immediately following. For a market that was used to rates being a safe-haven from deflationary shocks, this seems difficult to understand.  During most of the period that SARS was in focus, AUD rates tracked the path taken by US rates.  The divergence between AUD and USD rates began in earnest in the latter part of 2003, as it becomes clear that the RBA was likely to return to the tightening cycle it started in 2002.

Netherlands, The Consumer Spending Volume down to 1.3% in November from previous 1.7%

Netherlands, The Consumer Confidence Adj: -3 (January) vs previous -2

USD/CAD takes the bids near 1.3085, the highest in two weeks, during the pre-European session on Wednesday.

USD/CAD extends gains after multiple days of trading below 21-day EMA.50-day EMA, 50% Fibonacci retracement on the bull’s radar.1.3030 can return to the chart during the pullback.USD/CAD takes the bids near 1.3085, the highest in two weeks, during the pre-European session on Wednesday. In doing so, the pair holds onto gains after successfully breaking 21-day EMA on a daily closing basis the previous day. The buyers are now aiming 50-day EMA level of 1.3116 as the immediate resistance ahead of 50% Fibonacci retracement of the pair’s declines from September 2019 to January 01 low, near 1.3145. In a case where the bulls remain dominant post-1.3145, 1.3180/85 has multiple upside barriers ahead of confronting 61.8% of Fibonacci retracement near 1.3200. On the flip side, sellers will look for entry below the 21-day EMA level of 1.3070 while targeting the 1.3030 support level. During the quote’s further downside below 1.3030, 1.3000 and 1.2960 can entertain the bears. USD/CAD daily chart Trend: Bullish  

GBP/USD stays mildly bid to 1.3040 while heading into the London open on Wednesday.

GBP/USD holds onto recovery gains despite Brexit uncertainty looms.House of Lords sends the UK PM WAB back to Commons for voting, the ping pong period is expected due to five changes.EU is likely to offer a tough Brexit deal, increases the odds of harsh departure.GBP/USD stays mildly bid to 1.3040 while heading into the London open on Wednesday. The pair earlier recovered for the two consecutive days on upbeat UK fundamentals and the US dollar weakness but the Brexit fears might have weighed on the quote off-late. The House of Lords passed the UK PM’s Withdrawal Agreement Bill (WAB) back to Commons with five changes that marked the Conservatives’ defeat for the first time after the general election. The bitter one of them is concerning the EU nationals and Child refugees that the Tory leader was publicly against. Considering the ruling party’s majority in the House of Commons those amendments are likely to be turned down and hence the period for WAB to roam between Houses unless final terms are agreed is expected to last longer. On the other hand, The UK Express came out with the news that the European Union (EU) is preparing for a harsh deal to Britain. Even if it could have easily be gauged from the regional leaders’ latest behavior, the news could weigh on the initial Brexit talks between the EU and the UK. Over the counter, US President Donald Trump’s impeachment and the outbreak of Chinese coronavirus seem to weigh on the market’s risk tone. Even so, the US 10-year treasury yields rose two basis points (bps) top 1.79% by the time of writing. Given the lack of major data from the UK, except for the January month CBI Industrial Trends Survey, expected -23 versus -28 prior, markets will keep eyes on the trade/political headlines for fresh impulse. During the US session, second-tier data will entertain traders. Considering the same, TD Securities said, “We expect existing home sales to rebound a modest 1.3% m/m to a 5.42mn-unit AR in Dec following a 1.7% drop to 5.35mn in Nov. In line with the ongoing improvement in the housing sector, this would keep the average level in H2 above that of H1 2019 and 2018. Note that this series is highly volatile.” Technical Analysis 21-day SMA and the monthly trend line offers key resistance confluence around 1.3080/85, a break of which can recall 1.3120 and 1.3200 on the chart. Alternatively, 1.3000 and 1.2950/55 restrict the pair’s short-term declines.  

Speaking at an event on Wednesday, India’s Commerce and Industry Minister Piyush Goyal said that India is working on ways to have fairer and more equi

Speaking at an event on Wednesday, India’s Commerce and Industry Minister Piyush Goyal said that India is working on ways to have fairer and more equitable terms in trade relationships with various countries. Key Quotes (via Reuters): “Called for greater cooperation among various nations to realise the huge growth prospects in the Indian Ocean region and also for tackling the important issue of climate change. The Regional Comprehensive Economic Partnership (RCEP) in its present form was clearly an unworkable agreement. Any pact needs to take into account several factors. The country is grappling with a huge trade deficit, particularly with China and many other nations in the region.” USD/INR slips from two-week top to 71.20 as Indian markets recover early-day losses

The US investment banking giant, Goldman Sachs, assesses the impact of a potential SARS-like epidemic on oil markets. Key Quotes: “The virus that orig

The US investment banking giant, Goldman Sachs, assesses the impact of a potential SARS-like epidemic on oil markets. Key Quotes:The virus that originated in Wuhan could result in global demand falling by 260,000 barrels a day in 2020, with jet fuel accounting for around two-thirds of the loss.That would probably lead to a $2.90 a barrel drop in oil prices. The bank’s projections translate the estimated SARS demand impact into 2020 volumes. While an OPEC supply response could limit the fundamental impact from such a demand shock, the initial uncertainty on the potential scope of the epidemic could lead to a larger price sell-off than fundamentals suggest.”

USD/INR declines to 71.20 ahead of the European session on Wednesday. That said, the pair pulls back from a two-week high of 71.44, flashed early-day,

USD/INR fails to hold onto recovery gains amid upbeat performance by Indian equities.Risks from the outbreak of China’s coronavirus, US President Donald Trump’s impeachment hearing join hands with the IMF’s forecast of sluggish GDP growth.Upbeat results, expectations of government measures and market’s open on the budget day grabbed market attention off-late.USD/INR declines to 71.20 ahead of the European session on Wednesday. That said, the pair pulls back from a two-week high of 71.44, flashed early-day, amid the recovery in the Indian equities. The quote seems to ignore pessimism surrounding China and the US while also ignoring recent warnings from the International Monetary Fund (IMF). Indian markets opened slightly under pressure due to the outbreak of coronavirus and Chinese efforts to tame the same. However, upbeat performance results by the domestic companies and Singapore Nifty help the headline BSE SENSEX to mark 0.20% gains to 41,400 by the press time. Traders might also have cheered the exchange board’s decision to let the performance continue on February 01, Saturday when the Indian government will announce its annual budget. This will be the first time that such things have happened. The reason could be traced back to the IMF warning of worrisome GDP growth and news of declining investment into the Asian nation. In the US, President Donald Trump’s impeachment hearing began with the Republicans' victory to block Democratic push for the subpoena of state department documents. Further, clues from China suggest that Beijing is less inclined to begin the phase-two deal talks, not to mention less excited after the phase-one signing in, compared to the US. Markets are likely to take clues from the US data as well as updates from the risk catalysts like Chinese virus and trade headlines to determine near-term moves of the pair. Technical Analysis A confluence of 21, 50 and 100-day SMA around 71.24/31 seems to restrict the pair’s immediate upside, which in turn drags the quote towards January 14 low near 70.60.  

The TD Securities Commodity Strategists provide a strategy on trading WTI short spread amid expectations of oversupply starting out 2020. Key Quotes:

The TD Securities Commodity Strategists provide a strategy on trading WTI short spread amid expectations of oversupply starting out 2020. Key Quotes: “We previously entered a short WTI Mar-Jun spread trade at $1.15/bbl, as we expected oversupply in the first half of 2020 to see front end spreads return to contango. In the aftermath of the US-Iran tensions, the spreads reacted aggressively in our favor as bearish US inventory stats raised demand concerns once again. With the US-China trade deal including lofty energy purchases, and risk appetite remaining fairly strong, which offers near term optimism, we are opting to take profits on the trade at $0.63/bbl. While we still see a significant surplus on the horizon for the first half of the year and battered refining margins globally as a cause for concern regarding crude demand, short term risk-on dynamics could lend support to the front end of the curve preventing further material weakness in the spread before the end-Feb expiry.”

EUR/USD is operating on slippery grounds, following Tuesday's rejection above 1.11. The currency pair had risen to a high of 1.1118 during the Europea

EUR/USD is sidelined near 1.1080 ahead of the London open. Single currency failed to keep gains above 1.11 on Tuesday despite upbeat German data. The sentiment is quite bearish and a deeper drop to the 100-day average could be in the offing.   EUR/USD is operating on slippery grounds, following Tuesday's rejection above 1.11.  The currency pair had risen to a high of 1.1118 during the European trading hours on Tuesday, courtesy of an upbeat German data.   The German ZEW Indicator of Economic Sentiment rose 16 points to 26.7 in January to hit the highest value since July 2015. The ZEW data confirmed the economy bottomed out in the last quarter of 2019 and is witnessing a rebound.  Even so, EUR/USD's break above 1.11 was short-lived. The pair closed the day with 0.11% losses, producing an inverted hammer and confirming a head-and-shoulders breakdown on the daily chart.  The pair's failure to keep gains above 1.11 despite the upbeat German data indicates the sentiment is quite bearish.  As a result, a deeper decline to the 200-day average at 1.1067 cannot be ruled out. At press time, the pair is sidelined near 1.1080.  On the data front, Italy's Business Climate, Industrial Sales and Industrial Orders for November are scheduled for release on Wednesday. These data sets, however, are not big market movers.  Across the pond, the US housing data is due for release and could influence the greenback.  Technical levels  

USD/CHF takes the bids to 0.9700, following the intra-day high of 0.9702, while heading into the European session on Wednesday.

USD/CHF registers five-day winning streak, rises to a one-week high.A downside break of 0.9644 can refresh monthly lows.38.2% Fibonacci retracement could lure buyers during further upside.USD/CHF takes the bids to 0.9700, following the intra-day high of 0.9702, while heading into the European session on Wednesday. The pair nears the key short-term resistance confluence including 21-day SMA 23.6% Fibonacci retracement of the pair November-January fall and a descending trend line since December 06 around 0.9707/13. Should prices manage to provide a daily closing beyond 0.9717, an extended run-up to 38.2% Fibonacci retracement level of 0.9770 can’t be ruled out. Meanwhile, lows marked on December 31 and January 17 highlights 0.9644 as the immediate support, a break of which could push the bears towards refreshing the 16-month low towards 0.9600 round-figure and then to September 2018 bottom surrounding 0.9540. USD/CHF daily chart Trend: Pullback expected  

Australia and New Zealand Banking Group (ANZ) analysts provide their outlook on Hong Kong’s economy for this year. Key Quotes: “Hong Kong will continu

Australia and New Zealand Banking Group (ANZ) analysts provide their outlook on Hong Kong’s economy for this year. Key Quotes: “Hong Kong will continue to be a dollar funding centre for mainland Chinese companies. HKD peg will be maintained on strong capital inflows and LIBOR-HIBOR spread reversal. Growth momentum will pick up as trade rebounds. Retail sales and inbound tourism will improve in 2020. No US Fed rate hikes; this will support home values.”

Gold has pulled back sharply from six-year highs above $1,600 registered on Jan. 8. However, despite the correction, ANZ analysts have maintained thei

Gold has pulled back sharply from six-year highs above $1,600 registered on Jan. 8. However, despite the correction, ANZ analysts have maintained their bullish view on the precious metal. Key quotes Macroeconomics remain supportive for bullion, while strong PGM fundamentals could push prices higher.  Gold remains the risk diversifier and good hedge against elevated geopolitical risks, in the near term.  Renewed risk sentiment could trigger some profit booking, but a complete reversal of flows is less likely.  Weaker physical offtake will not be a strong headwind if the backdrop remains conducive to investment demand. Gold is currently trading near $1,550 per Oz, having hit a high of $1,611 on Jan. 8 and a low of $1,548 on Jan. 14.
 

Gold bounces off the intra-day low of $1,550.40, flashed a few minutes back, to $1,551.30 by the press time of the pre-European session on Wednesday.

Gold drops for the second day in a row as broad US dollar strength hurt the bullion buyers.Trade sentiment recovers despite fears of China’s coronavirus outbreak, trade-negative headlines.Updates from US President Trump’s impeachment hearings, second-tier US data and China will be the key.Gold bounces off the intra-day low of $1,550.40, flashed a few minutes back, to $1,551.30 by the press time of the pre-European session on Wednesday. In doing so, the safe-haven ignores the geopolitical risks emanating from China and the uncertainty surrounding the US-China trade relations. The reason could be found in the US dollar strength that has a negative correlation with the yellow metal. China’s outbreak of coronavirus took nine lives by the end of Tuesday, as confirmed by the China National Health Commission (NHC). The same renews fears of the return of the Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 2002/03. The NHC said it will take strict monitoring measures over the Wuhan city that is known to be the epicenter of the virus. On the trade front, China’s Vice Premier Han Zheng earlier poured cold water on US President Donald Trump’s comments that the trade deal with China will get $100 billion worth of orders. Following that, Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), said that the US and China haven’t set a timetable for the next phase of their trade negotiations. Also affecting the risk tone was the beginning of the impeachment hearings for US President Trump whereas in the Republicans have blocked the Democratic move to subpoena the state department documents. Furthermore, global leaders including US President Trump and the United Nations’ (UN) Secretary-General Antonio Guterres are pushing hard to get the Libyan oil route resumed. However, Khalifa Haftar is still unbent and can renew chaos in the Middle East. Even so, the US 10-year Treasury yields recover to 1.79% whereas equities in China and India mark losses. Moving on, trade/political and update concerning the coronavirus will keep the global headlines equipped while the US second-tier data concerning housing and manufacturing can offer additional directives to the bullion traders. Technical Analysis The precious metal portrayed a bearish spinning top on Tuesday, which in turn favors its further declines to a 21-day SMA level of 1,542.55. Alternatively, a daily closing beyond Tuesday’s high near $1,569 will defy the bearish candlestick formation.  

Thailand and Macau have confirmed coronavirus cases, according to the Xinhua news agency. The virus could mutate and spread further, Chinese health of

Thailand and Macau have confirmed coronavirus cases, according to the Xinhua news agency.  The virus could mutate and spread further, Chinese health officials have warned. The death toll in China has risen to nine with 440 confirmed cases.  The virus scare sent global equities lower on Tuesday. The decline, however, could be reversed today, as the S&P 500 futures are currently pointing to risk reset with a 0.47% gain. 
 

USD/JPY has risen above 110.00, tracking the 0.30% rise in the S&P 500 futures. The bulls are not out of the woods yet and a break above 110.12 is nee

Risk reset in stocks is boding well for USD/JPY. The pair may be forming a head-and-shoulders pattern on the hourly chart. USD/JPY has risen above 110.00, tracking the 0.30% rise in the S&P 500 futures.  The bulls are not out of the woods yet and a break above 110.12 is needed to invalidate lower highs setup on the hourly chart and open the doors for re-test of 110.29 (Jan. 16 high).  However, if the resistance at 110.12 holds, the pair may fall back to 109.75, forming a head-and-shoulders pattern.  An hourly close below 109.75 (neckline support) would confirm a bearish reversal and create room for a drop to 109.21 (target as per the measured move method).  Hourly chartTrend: Bearish below 109.75 Technical levels  

According to Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), China’s state planner, the US and China haven’t set a

According to Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), China’s state planner, the US and China haven’t set a timetable for the next phase of their trade negotiations, as cited by Bloomberg. The focus for now is on implementing the phase-one deal, Ning added.

Asian stocks are trading mixed with investors assessing the economic impact of coronavirus. At press time, Japan's Nikkei index is reporting a 0.54% g

Asian stocks are trading mixed as the S&P 500 futures report gains. Chinese stocks have erased loses and now trade about 0.5% lower on the day. Asian stocks are trading mixed with investors assessing the economic impact of coronavirus.  At press time, Japan's Nikkei index is reporting a 0.54% gain. Stocks in Australia, New Zealand, and South Korea are also flashing green.  Meanwhile, the Shanghai Composite index is reporting losses for the second day. The index is currently trading at 3034, representing a 0.56% drop on the day, having hit a 2019 low of 3006 earlier today.  The US stocks tracked the Asian and European equities lower on Tuesday on concerns China's coronavirus could spread across the world. The weak tone in the equities boded well for safe havens like gold, yen and Swiss franc.  The futures on the S&P 500, however, are now pointing to risk reset with a 0.27% gain.  As a result, currency traders are offering the anti-risk yen. The USD/JPY pair has moved back above 110.00, having hit a low of 109.83 in early Asia. It won't be a surprise if the equities erase Tuesday's losses, as fund managers have priced out recession risks and boosted their equity allocations to a net 32% overweight – the highest in 17 months, according to Bank of America Merrill Lynch’s (BoAML) January survey of global fund managers shows. 

Following the briefing on the coronavirus, China's National Health Commission official Jiao said that infection of medical staff in the virus outbreak

Following the briefing on the coronavirus, China's National Health Commission official Jiao said that infection of medical staff in the virus outbreak show there are loopholes in treatment methods.

The Chinese highly-influential news outlet, Global Times, is out with the key takeaways of the coronavirus news conference held by China's National He

The Chinese highly-influential news outlet, Global Times, is out with the key takeaways of the coronavirus news conference held by China's National Health Commission Vice Minister Li in the last hour. Key Points: The source of the #nCoV2019 infection is yet to be ascertained.  The transmission route of the virus is yet to be fully understood. There is a possibility of virus mutation and a risk of further spread of the epidemic. Shanghai confirmed three new cases on Tuesday, bringing the total number of confirmed cases to nine: local health authority The spreading WuhanPneumonia led China's stock markets to drop by over 1% on Tuesday, but analysts said market fluctuations will be short-lived and investors should focus on value investing. WuhanPneumonia 2,197 people who were in close contact with #nCoV2019 infected patients have been tracked; among them 1,394 are under close medical observation.

The global market is less dependent on OPEC’s oil production than it was a decade ago, courtesy of increasing US shale production since 2015, accordin

The global market is less dependent on OPEC’s oil production than it was a decade ago, courtesy of increasing US shale production since 2015, according to ANZ analysts.  That is evidenced through the fact that oil prices quickly lost gains seen following the US airstrikes on Iran's militia earlier this month.  Key quotes The US shale oil revolution has alleviated dependence on OPEC supply. That said, the group is still important, contributing 30% to global supply.  Total US oil production has more than doubled to around 13mb/d since 2010, making the country a leading producer. Recent unrest in Libya has seen the country’s National Oil Corporation declaring force majeure, production of about 700kb/d could be held up. Iraq is another producer vulnerable to production risk.      

USD/CNH remains strong around 6.9130, highest since January 10, during the initial trading session on Wednesday. The pair recently benefited from the

USD/CNH holds onto recovery gains from multi-month low after posting the biggest daily positive since mid-December on Tuesday.Fears of coronavirus, expectations of current account deficit and a lack of trade-positive news propel the pair.Second-tier data from the US, trade/political headlines will be in focus.USD/CNH remains strong around 6.9130, highest since January 10, during the initial trading session on Wednesday. The pair recently benefited from the growing fears of the coronavirus. Read: China National Health Commission’s Li: 440 confirmed cases as of end-Jan 21 in 13 provinces China’s Global Times earlier report that the Wuhancorona virus is likely to be mutated, and the Wuhanpneumonia epidemic is at risk of further spread, has been reported in China's health commission. Following the death of nine people due to the human transmitted virus, markets fear the return of Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 26 countries during 2002/03. The same triggered risk-off moves on Tuesday. Also supporting the risk aversion was the US President Donald Trump’s impeachment hearing as well as the International Monetary Fund’s (IMF) downward revision to the global growth forecast. Further strengthening the pair could be Moody’s analysis that China's shift into the current account deficit could weigh on the sovereign's credit profile. Additionally, a lack of trade-deal positive news is also a likely reason for the quote’s latest run-up. In doing so, traders ignored calls from the Ex-People’s Bank of China (PBOC) Governor, Min Zhu, who expects China well placed for growth in 2020. While trade/political headlines and risk catalysts are here to keep directing the pair’s near-term moves, the US second-tier data concerning manufacturing and housing will be in focus during the latter part of the day. Technical Analysis Unless providing a daily closing beyond a seven-week-old descending trend line, at 6.9200 now, USD/CNH prices are less likely to revisit the monthly high near 6.9780. On the downside, 6.8740 and 6.8455 can entertain bears during the fresh declines.  

Bank Indonesia (BI), the Indonesian central bank, Governor Perry Warjiyo in the last minutes, via Reuters, making some comments on the monetary policy

Bank Indonesia (BI), the Indonesian central bank, Governor Perry Warjiyo in the last minutes, via Reuters, made some comments on the monetary policy outlook. Key Quotes: To continue an accommodative monetary policy. Policies to focus on strengthening economic growth.

USD/JPY is hovering below 110.00 with yen showing resilience, despite the bullish development on technical charts. Bull cross The 100-day moving avera

USD/JPY remains below 100.00 despite bull cross on technical charts. The S&P 500 futures are hinting at risk reset in the markets. A notable equity market recovery could weigh over yen. USD/JPY is hovering below 110.00 with yen showing resilience, despite the bullish development on technical charts.  Bull cross The 100-day moving average has crossed above the 200-day MA, confirming a bullish crossover, the first since August 2018.  So far, however, that has failed to inspire yen sellers. The USD/JPY pair is currently sidelined around 109.90, having faced rejection at 109.97 a few minutes ago.  The long-term bull cross is a lagging indicator and often ends up trapping the bulls on the wrong side of the market.  Eyes broader market sentiment The futures on the S&P 500 are currently reporting a 0.20% gain, signaling a potential risk reset in the markets.  If the equities continue to rise, the USD/JPY pair could retake the 110.00 handle.  The spot fell from 110.22 to 109.76 on Tuesday as global equity markets fell on coronavirus scare  The US stocks tracked its Asian and European equities lower on Tuesday with the S&P 500 losing 8 points or 0.27%, courtesy of coronavirus scare, sending the anti-risk yen higher.  Technical levels  

China's National Health Commission Vice Minister Li is on the wires now, via Reuters, speaking at the press briefing about the coronavirus outbreak. K

China's National Health Commission Vice Minister Li is on the wires now, via Reuters, speaking at the press briefing about the coronavirus outbreak. Key Quotes: Have invited WHO, Hong Kong, Taiwan officials to Wuhan. Live animals including poultry are not allowed for entry in Wuhan. 440 confirmed cases as of end-Jan 21 in 13 provinces.

It was not a good day for the Aussie bulls overnight and commitments were lost at the H&S neckline. Subsequently, the price closed on a daily closing

Bears taking out the H&S neckline, target channel support/uptrend at 0.6829.Failures of the channel opens risk to 61.8% Fibo and then 0.6755 November low. Bulls need the golden ratio to hold or its probably game over to the 0.66 handle. Risk-off mood in Asia not helping bull's case ahead of key data releases and expected rate cut from a dovish RBA.AUD/USD daily chart It was not a good day for the Aussie bulls overnight and commitments were lost at the H&S neckline. Subsequently, the price closed on a daily closing basis below the neckline and marked a fresh closing low for the year down at 0.68427. In Asia, the pair has slipped further to a low of 0.6832 as bears milk the bearish environment on both a fundamental and technical basis ahead of the jobs data tomorrow, Consumer Price Index at the end of the month and the Reserve Bank of Australia meeting on the 4th Feb.  As the attached chart shows, the price is headed for a test of the channel support. On a weekly basis, 0.6937 was the June 2019 level, so this should reinforce the channel. However, below there, bears can target the golden ratio as the 61.8% Fibonacci retracement target which will be expected to hold the initial tests. A subsequent break there will be game over the committed bulls and 0.66 will be on the cards. First support may come in at the 0.6755 November low ahead of the target the 0.6671 October low However, should there be a firm hand from the bulls at either the channel support or 61.8%, a structural bullish case could be made for a restest of the channel and prior support of the H&S neckline and 0.6880 prior resistance. On a subsequent break, bulls will be back in the picture for a more balanced bias and the upside of the channel will be back in vogue.       

Analysts at Australia and New Zealand Banking Group (ANZ) offer their afterthoughts on the South Korean GDP data release that outpaced expectations. K

Analysts at Australia and New Zealand Banking Group (ANZ) offer their afterthoughts on the South Korean GDP data release that outpaced expectations. Key Quotes: “South Korea’s preliminary Q4 GDP came in at 1.2% q/q sa and 2.2% y/y, beating expectations. Government spending and exports were the key contributors to y/y growth, but the drag from investment also eased. 2019 growth came in at 2.0% (the weakest since the global financial crisis), but is expected to pick up in 2020 against a backdrop of improving exports and strong fiscal support.”

NZD/USD stretches losses to monthly of 0.6581 by the press time of early Wednesday. The pair remains on the back foot below 200-bar SMA and 61.8% Fibonacci.

NZD/USD extends losses below 200-bar SMA, 61.8% Fibonacci retracement.The previous week’s top will limit near-term recovery, December 11 low can please bears during further weakness.NZD/USD stretches losses to monthly of 0.6581 by the press time of early Wednesday. The pair remains on the back foot below 200-bar SMA and 61.8% Fibonacci retracement of its run-up from December 11 to 31. Also supporting the sellers are bearish MACD signals. As a result, December 18 low near 0.6554 is likely arriving on the chart whereas December 11 bottom close to 0.6520 can mark its presence afterward. If at all the NZD/USD prices fail to bounce off 0.6520, a 200-day SMA level near 0.6513 can offer another chance which if ignored can recall sub-0.6500 area back to the charts. On the upside, 61.8% Fibonacci retracement around 0.6610 and 200-bar SMA level of 0.6630 can challenge the pair’s short-term pullbacks ahead of the previous week’s high close to 0.6670. During the pair’s recovery beyond 0.6670, the 0.6682 and 0.6700 will gain the buyers’ attention. NZD/USD four-hour chart Trend: Bearish  

A majority of fund managers expect the Treasury curve, as represented by the 10-year yield, to steepen, although the number of respondents saying this

A majority of fund managers expect the Treasury curve, as represented by the 10-year yield, to steepen, although the number of respondents saying this declined by 11 percentage points to 66% in January, Bank of America Merrill Lynch’s (BoAML) January survey of global fund managers shows.  A steepening of the yield curve could bode well for the USD/JPY pair, which is currently trading at 109.90. Key points (source: citywire.co.uk) A net 36% of professional investors now expect global growth to improve over the next 12 months. Fund managers have ‘completely priced out’ recession risks. Fund managers boosted their equity allocations to a net 32% overweight – the highest in 17 months.

Westpac strategists expect the Australian dollar to continue falling against Chin's Yuan and drop to mid-4.60 in the near term. Key points Our base ca

Westpac strategists expect the Australian dollar to continue falling against Chin's Yuan and drop to mid-4.60 in the near term.  Key points Our base case is for the RBA to cut the cash rate to 0.5% in Feb, followed later in the year by another cut and QE. This outlook should keep AUD/CNY trending lower. AUD has background support from ongoing historically large trade surpluses, elevated equity prices and low volatility. But sub-trend growth and muted inflation are keeping markets leaning towards further RBA easing. Yuan's recent 3% gains against the US dollar might be somewhat excessive, as the US-China trade deal offers only limited tariff relief for China in exchange for a huge increase in purchases of US exports. AUD/CNY is currently trading at 4.72, representing a 3.6% drop on a year-to-date basis. "Any recoveries to above 4.80 are likely to fade," Westpac strategists mentioned in the daily note. 

Coronavirus - China National Health Commission will hold a press briefing at 0200GMT. The risk-off environment surrounding this is fragile. At the sta

Coronavirus - China National Health Commission will hold a press briefing at 0200GMT. The risk-off environment surrounding this is fragile. At the start of the week, gold and yen were performing on the bid as a result of reports where the virus had spread to hundreds of people on China. now, there are reports of the virus in several countries around the world.  More on that here: Wuhancorona virus is likely to be mutated - The Global TimesMarket implications When looking back, when comparing to the last human chain of SARS transmission in the first outbreak (from November 2002 to July 2003), it was successfully disrupted on 5 July 2003 owing to global cooperation, the international spread of SARS coronavirus (SARS-CoV). It had resulted in 8,098 SARS cases in 26 countries, with 774 deaths.  Over the same period, USD/JPY rallied, March 2003-July from 116.32-120.63, (May lows were 115.09). It then dropped in August from 120-103 Dec business of the same year. The Japanese fiscal year-ends March 31st so the yen is usually stronger seasonally around then as the flows from Japanese exporters buying at the end of their financial year.   

Following the upbeat GDT Price Index data from New Zealand, coupled with global clues, Westpac pushed up its prediction of the farmgate milk price for

Following the upbeat GDT Price Index data from New Zealand, coupled with global clues, Westpac pushed up its prediction of the farmgate milk price forecast for the current season from $7.10/kg to $7.40/kg. This should help NZD/USD due to New Zealand’s reliance on dairy. Even so, the pair remains on the back foot while trading near 0.6585 by the press time of early Wednesday. Key quotes Stronger than expected dairy prices so far this season have boosted the outlook for this year’s payout, and dry weather is creating a risk that prices could go even higher in the short term. However, our forecast still allows for some easing in world prices over this year as China’s economic growth slows and trade tensions remain high. There’s a risk that world prices could be squeezed higher in the near term, as dry weather restricts the global milk supply. That’s especially the case for New Zealand. DCANZ data shows that milk collections in November were up slightly on the previous year, and are up 0.5% for the season to date. But a lack of rain over the summer period has seen a rapid drying-out across many regions, which means that milk production could fall short over the tail end of the season. It’s not clear to what extent the Australian bushfires will also impact the global milk supply. The Australian dairy industry has already been hit hard by drought in recent times – milk collections over 2019 were down 7% on the previous year.

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8853 versus Tuesday's fix at 6.8606.

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8853 versus Tuesday's fix at 6.8606.

AUD/USD extends its four-day-old declines while flashing fresh six-week low of 0.6835 during early Wednesday.

AUD/USD closes below 50% of Fibonacci retracement for the time in a month.An ascending trend line since early-October, 61.8% of Fibonacci retracement will question sellers.0.6930/40 area limit pair’s near-term upside.AUD/USD extends its four-day-old declines while flashing fresh six-week low of 0.6835 during early Wednesday. The pair registered its first daily closing below 100-day SMA since early December on Tuesday. With this, the Aussie prices are likely to slip further towards a 16-week-old rising trend line, at 0.6827, whereas 61.8% Fibonacci retracement of the pair’s October-December month upside, near 0.6812, will restrict extended downside. If at all bears refrain from respecting the key Fibonacci retracement level, the November month low surrounding 0.6750 could grab the spotlight. Alternatively, 50% and 38.2% of Fibonacci retracement levels, near 0.6855 and 0.6900 respectively, will question the pair’s pullback moves ahead of 0.6930/40 area including multiple tops marked since October-end. In a case where the bulls dominate beyond 0.6940, 0.7000 and the previous month top around 0.7045 will return to the charts. AUD/USD daily chart Trend: Bearish 

WTI bounces off to $58.35 during early Wednesday. In doing so, the black gold disturbs the previous two-day declines while taking clues from the secon

WTI snaps two-day losing streak.The global push for the immediate solution of Libyan oil seize, headlines from Iran/Iraq in focus.API data, trade/political news will offer fresh direction.WTI bounces off to $58.35 during early Wednesday. In doing so, the black gold disturbs the previous two-day declines while taking clues from the second-tier news from the Middle East amid a lack of major data/events elsewhere. The oil benchmark has been bearing the burden of strong US dollar and doubts over the global recovery, as spread through the International Monetary Fund’s (IMF) latest forecast. Also supporting the energy benchmark’s declines were receding odds of the US-Iran war and softening tension in Iraq. However, Libya’s refrain from respecting the global push, including the United Nations’ Secretary-General Antonio Guterres and US President Donald Trump, to release control of oil exports limit the quote’s downside. Investors will now look towards the private inventory numbers, namely the weekly reading of the American Petroleum Institute’s (API) US Crude Oil Stock, for fresh direction. The private inventory data marked 1.1M figure during the previous week. Traders will also take care of the trade/political headlines to determine the near-term direction of oil prices. The US-China trade deal optimism seems to fade after China’s Vice Premier Han Zheng poured cold water on the face of US President Trump’s claim that the deal will get orders worth $100 billion from China. Technical Analysis 200 and 100-day SMAs limit the black gold’s downside around $57.65 and $ 57.35 respectively. Meanwhile, 21-day SMA near $60.20 caps the oil benchmark’s short-term upside.  

EUR/JPY is reporting marginal gains at press time but is struggling to post sustainable gains above the 4-hour chart 100-candle moving average at 121.

EUR/JPY is chipping away at key average resistance on the 4-hour chart. A break higher may remain elusive if stocks extend Tuesday's slide.The pair fell on Tuesday despite upbeat German data. EUR/JPY is reporting marginal gains at press time but is struggling to post sustainable gains above the 4-hour chart 100-candle moving average at 121.83. The bid tone around the Japanese Yen has weakened somewhat with the futures on the S&P 500 reporting a 0.12% gains.  Focus on risk sentiment The stock market fell on Tuesday with the Dow Jones Industrial Average shedding 152 points or 0.5% on reports that the deadly coronavirus from Wuhan, China had
reached the US. Stocks in Europe and Asia also suffered losses on virus scare, sending the anti-risk Japanese yen higher. As a result, the anti-risk yen gained ground against the single currency and other majors.  EUR/JPY fell 0.41% and closed below 122.00 on Tuesday, as the risk-off overshadowed the upbeat German data – the ZEW Indicator of Economic Sentiment rose 16 points to 26.7 to hit the highest value since July 2015.  The pair may cheer the signs of life in the German economy on Wednesday if the stock markets regain poise. However, the 50-day average at 121.10 could come into play if the flight to safety gathers pace.  Technical levels  

Analysts at TD Securities details the key data events from overnight, including UK's labour market figure Germany's ZEW survey and Canada's Manufactur

Analysts at TD Securities details the key data events from overnight, including UK's labour market figure Germany's ZEW survey and Canada's Manufacturing sales. Key notesUK: This morning's labour market figures were on the slightly stronger side. The unemployment rate was in line with consensus, holding steady at 3.8%, but wage growth decelerated a touch less than expected, while employment growth picked up after slowing through the middle part of this year. The data is quite lagged though - these are Sept-Nov average figures - so this one monthly report will probably not be a big part of the BoE's decision. There's still enough weakness in other areas to justify a rate cut this month, although if the labour market were to remain this strong for the next few months, that would cast a lot more doubt on the second rate cut that we're looking for in May.Germany's ZEW survey was stronger than expected, with the current situation improving from -19.9 to -9.5 (mkt -13.5), and expectations from 10.7 to 26.7 (mkt 15.0), reaching their highest level since July 2015. This was reportedly due to the easing of US-China trade tensions, and the hope that the negative impact on Germany will begin to ease. Though German growth is still expected to remain below average.Canadian Manufacturing sales surprised slightly to the downside in November with a 0.6% m/m drop (market: -0.5%), with a large rebound in auto parts preventing an even larger pullback; ex-transport shipments were down 1.7%. Part of the weakness was attributed to the CN rail strike that contributed to an 11.7% drop in primary metals. Manufacturing volumes fell by 0.8% which implies a modest headwind to industry-level GDP for November, although we continue to track Q4 growth near 0.5%.

The Wuhancorona virus is likely to be mutated, and the Wuhanpneumonia epidemic is at risk of further spread, has been reported in China health commiss

The Wuhancorona virus is likely to be mutated, and the Wuhanpneumonia epidemic is at risk of further spread, has been reported in China health commission according to a Global Times.cn special-cover… More to come

EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as i

Tuesday's inverted bearish hammer bolstered bearish setup. EUR/USD risks falling to a three-month rising trendline. EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as it faced rejection at 1.1118 and ended on a negative note.  That candle has reinforced the bearish view put forward by the lower highs setup created over the last two weeks. Also, the pair closed below 1.1085 (Jan. 10 low) on Tuesday, establishing a lower low.  The pair, therefore, looks set to test the rising trendline support at 1.1067. A violation there would expose 1.1040 (Dec. 6 low).  On the higher side, a close above the Jan. 16 high of 1.1173 is needed to invalidate the lower highs set up and confirm a bullish reversal.  Daily chartTrend: Bearish Technical levels  

Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick.

Gold extends losses after registering the bearish candlestick formation/MACD during the previous day.21-day SMA can act as immediate support, 23.6% Fibonacci retracement could question short-term buyers.Gold remains on the back foot while trading around $1,556.90 during the Asian session on Wednesday. The yellow metal portrayed a bearish candlestick formation, backed by bearish MACD, during the previous day. As a result, the bullion’s prices are likely to decline further towards 38.2% Fibonacci retracement of its November-January rise, at $1,547, ahead of testing 21-day SMA level of 1,542.55. During the precious metal’s downside past-21-day SMA, 50% of Fibonacci retracement and November month high could please sellers around $1,528 and $1,515. Alternatively, a daily closing beyond Tuesday’s high near $1,569 will defy the bearish sipping top and can push the quote to 23.6% of Fibonacci retracement around $1,572. Given the buyers' ability to stay strong above $1,572, $1,587 holds the key to further rise targeting the monthly top surrounding $1,611. Gold daily chart Trend: Pullback expected  

Following the release of Australia’s Westpac Consumer Confidence data for January, -1.8% versus -0.8% expected, analysts at the institutional bank cit

Following the release of Australia’s Westpac Consumer Confidence data for January, -1.8% versus -0.8% expected, analysts at the institutional bank cites bushfires as the main culprit behind the sustained weakness in the consumer sentiment. Key quotes It is entirely reasonable to have expected that the Index would have fallen during this period of devastating bushfires. Perhaps it is somewhat surprising that the fall in the Index was not more severe particularly in light of the 5.8% fall we saw during the Queensland floods in 2011. Confidence has been further eroded by the bushfires but because the Index was starting from such a modest level it was likely that the fall in Confidence would be less than some may have expected. This low level of Confidence is consistent with the generally lackluster reports on consumer spending. The surprising jump in retail sales which was reported for November is likely to have largely reflected the “Black Friday” effect.  A more widespread boost to spending will be required before there are credible grounds to dispute the downbeat signals associated with the consistently low levels of the Index. All the economic components of the Index recorded declines in January.

GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session.

GBP/USD pulls back from 50% Fibonacci retracement.A two-week-old falling trend line adds to the resistance.1.3000 round-figure will also play its role as the support.GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fibonacci retracement of its fall from January 07 to 14. With this, sellers eye 200-hour SMA level of 1.3030 as the immediate support ahead of the two-day-old rising trend line, at 1.3015. Also supporting the pair will be 1.3000 mark. In a case where the bears dominate below 1.3000, the monthly low surrounding 1.2955 will return to the chart. On the upside, pair’s break of 50% Fibonacci retracement, at 1.3085, needs to clear short-term falling resistance line, near 1.3105, to justify its strength in challenging 61.8% of Fibonacci retracement around 1.3115. If at all prices remain strong beyond 1.3115, 1.3165 and 1.3200 could lure the bulls. GBP/USD hourly chart Trend: Bearish  

The US Senate Republicans blocked the Democrats' move to subpoena state department documents for the US President Trump impeachment trial. More to com

The US Senate Republicans blocked the Democrats' move to subpoena state department documents for the US President Trump impeachment trial.  More to come..  

Australia Westpac Consumer Confidence below expectations (-0.8%) in January: Actual (-1.8%)

Australia Westpac Consumer Confidence in line with forecasts (-0.8%) in January

GBP/JPY remains modestly changed while trading around 143.35 during Wednesday’s Asian session. The pair struggled between upbeat UK data and broad ris

GBP/JPY struggles to extend the day-start gains following mixed trading on Tuesday.UK PM Johnson’s WAB got fourth change from the House of Lords, British Average Earnings tamed broad risk aversion earlier.UK CBI Trends Survey decorates the economic calendar, trade/Brexit headlines will be followed for risk assessment.GBP/JPY remains modestly changed while trading around 143.35 during Wednesday’s Asian session. The pair struggled between upbeat UK data and broad risk aversion the previous day. Following three changes to the UK PM Boris Johnson’s Withdrawal Agreement Bill (WAB) voted on Tuesday, the UK Members of Parliaments (MPs) recently voted down one more amendment from the key bill. “Lords passed an amendment which would permit cases to be referred to the Supreme Court to adjudicate on whether to depart from EU case law,” says the UK’s Express. Fears of a tough start to the EU-UK trade negotiations also crossed wires, via The Telegraph, off-late. The news relied on the document while stating that the region prepares for the worse deal to the UK than it offered to Canada or Japan. The better than expected 3.1% reading of Average Earnings to 3.2% cut the odds of the BOE’s rate cut during the month-end meeting on Tuesday. Also contributing to the British Pound’s (GBP) strength were softer than forecast 22.6K figures of Claimant Count Change. On the other hand, the market’s risk tone weighed down by the concerns of China’s coronavirus outbreak and US President Donald Trump’s impeachment hearings. Further, the International Monetary Fund’s (IMF) downward revision to global growth forecast and China’s assurance that its trade with Europe won’t be hurt due to the deal with the US also favor risk-off. As a result, the US 10-year treasury yields registered a loss of six basis points (bps) on Tuesday. Investors will now concentrate on the trade/Brexit news for fresh impulse amid a light economic calendar. Even so, the January month CBI Industrial Trends Survey, expected -23 versus -28 prior, from the UK can offer intermediate moves. Technical Analysis Unless providing a daily closing below a 21-day SMA level of 142.97, GBP/JPY is less likely to visit the monthly bottom surrounding 142.80.  

Analysts at Westpac noted that the Australian dollar is about flat against the US dollar over the past 3 months, but also acknowledged that the Chines

Analysts at Westpac noted that the Australian dollar is about flat against the US dollar over the past 3 months, but also acknowledged that the Chinese yuan has rallied about 3%. Key quotes Clearly the key factor has been the steady progress towards the US-China trade deal which was finally signed last week. The trade deal offers only limited tariff relief for China in exchange for a huge increase in purchases of US exports, which doesn’t seem overly bullish for the yuan. But China has at least bought a period of trade truce with the US and if the US has a new president in 2021, the trade deal is likely to be scrapped. AUD has background support from ongoing historically large trade surpluses, elevated equity prices and low volatility. But sub-trend growth and muted inflation are keeping markets leaning towards further RBA easing, which seems to be the main driver for AUD. Our base case is for the RBA to cut the cash rate to 0.5% in Feb, followed later in the year by another cut and QE. This outlook should keep AUD/CNY trending lower, even if recent yuan gains might be somewhat excessive. Any recoveries to above 4.80 are likely to fade, targeting the mid-4.60s multi-week/month.

Caixin shared comments from China’s Vice Premier Han Zheng that poured cold water on the US President Donald Trump’s projections of $100 billion sales

Caixin shared comments from China’s Vice Premier Han Zheng that poured cold water on the US President Donald Trump’s projections of $100 billion sales to China. Key quotes China’s trade deal with the US won’t hurt Europe and will comply with World Trade Organizations (WTO) rules, Han made the comment in response to growing concern in Europe that the US-China accord could harm the European companies. FX implication Given the likely ambiguous stage of the US-China trade deal despite the signing of the phase-one deal, news like this adds to the market’s current risk aversion. Even so, USD/JPY and AUD/USD register modest changes to 109.88 and 0.6845 by the press time of early Wednesday morning in Asia.

South Korea Gross Domestic Product Growth (QoQ) below forecasts (0.8%) in 4Q: Actual (0%)

South Korea Gross Domestic Product Growth (YoY) registered at 2.2% above expectations (1.9%) in 4Q

During late-Tuesday, The Telegraph came out with the news that the European Union (EU) is preparing to offer the UK a trade deal on tougher terms.

During late-Tuesday, The Telegraph came out with the news that the European Union (EU) is preparing to offer the UK a trade deal on tougher terms than its deals with Canada, Japan and a host of other leading trade partners. Key quotes The European Commission has warned EU member states that it would be a mistake to allow some UK industry bodies to be allowed to certify that goods conform to EU standards.  The so-called Mutual Recognition Agreements (MRAs) are granted to other key EU trade partners to facilitate the smooth movement of goods in key sectors but could be withheld from the UK if it only seeks a basic trade deal.  The uncompromising European Commission stance surprised even some EU member states when they met on January 10 to discuss future goods trade with the UK. FX implications While news like this generally weighs on the British Pound (GBP), the GBP/USD pair seems to shrug it off while trading modestly changed to 1.3050. The reason could be traced from the UK’s latest upbeat Average Earnings data.

AUD/JPY recovers to 75.20 amid the initial Asian session on Wednesday. The pair declines below 200-day EMA during the previous day but took a U-turn off-late.

AUD/JPY revisits the sub-200-day EMA area after eight days.Early-December top, 38.2% Fibonacci retracement can please sellers during further declines.23.6% Fibonacci retracement adds to the short-term resistance.AUD/JPY recovers to 75.20 amid the initial Asian session on Wednesday. The pair declines below 200-day EMA during the previous day but took a U-turn from 50-day EMA. Even so, bearish MACD favors the sellers. Hence, a downside break of 50-day EMA level of 75.10 can extend Tuesday’s declines towards December 03 high near 74.85 ahead of highlighting 38.2% Fibonacci retracement of the pair’s rise between October and December months, at 74.70. In a case where AUD/JPY prices keep trading southward past-74.70, 50% Fibonacci retracement and the monthly low could entertain the bears around 74.15 and 73.75 respectively. Meanwhile, the pair’s daily closing beyond a 200-day EMA level of 75.32 enables it to challenge 23.6% of Fibonacci retracement at 75.42. However, January 16 peak around 76.25 and the previous month's top surrounding 76.55 could question the bulls during the additional run-up. AUD/JPY daily chart Trend: Pullback expected  

NZD/USD remains modestly changed around 0.6595 amid the early Wednesday morning in Asia. The kiwi pair dropped for three days in a row by the end of T

NZD/USD seesaws near the one-week low, await fresh clues after multi-day declines.Broad US dollar strength, risk aversion dragged commodity-linked currencies before New Zealand GDT Price Index.A light economic calendar emphasizes on news flow for fresh direction.NZD/USD remains modestly changed around 0.6595 amid the early Wednesday morning in Asia. The kiwi pair dropped for three days in a row by the end of Tuesday. However, the latest New Zealand GDT Price Index and the absence of major data ahead pushed sellers to rethink their view. The bi-monthly GDT Price Index from New Zealand recently crossed -0.3% forecast with a gain of +1.7%. Details suggest that the Whole Milk Powder (WMP), the key component, also pleased dairy members while marking 2.4% gains. Earlier, risk aversion welcomed the US dollar while returning from an extended weekend. News of China’s coronavirus outbreak, US President Donald Trump’s impeachment hearing and the International Monetary Fund’s (IMF) downwardly revised global growth forecasts mainly contributed to the market’s risk-off mood on Tuesday. With this, the US 10-year treasury yields lost more than six basis points (bps) to 1.77% while the S&P 500 Futures also mark 0.15% loss to 3,320 by the press time. Also contributing to the greenback’s strength were upbeat comments from US President Trump and White House Advise Larry Kudlow from the World Economic Forum (WEF) in Davos. On the trade front, China’s Commerce Ministry reiterated its call to welcome competitive US products whereas US President Trump considered Beijing’s import promise as huge. An absence of major data/catalysts could keep markets focused on the trade/political headlines for fresh impulse. “NZ rates will be dominated by offshore moves today with risk-off on the back of the Coronavirus headlines. We still favor USD upside near term given the likelihood that US growth expectations will be revised up for 2020 H1 (first half),” said the Australia and New Zealand Banking Group (ANZ). Technical Analysis A 50-day SMA level of 0.6570 and December 18 low near 0.6555 can restrict the pair’s immediate declines while the monthly trend line and 21-day SMA, around 0.6635 and 0.6650 respectively, can question buyers during the recovery.  
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