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सोमवार , जनवरी 20, 2020

WTI (oil futures on NYMEX) is seen surrendering most gains induced by the news that two large crude oil fields are shutdown in Libya following a milit

WTI pares back gains led by Libyan oilfields shutdown news. Broad USD strength also weighs down on oil prices. Focus shifts to US weekly Crude Stock data amid thin trading. WTI (oil futures on NYMEX) is seen surrendering most gains induced by the news that two large crude oil fields are shutdown in Libya following a military blockage. At the press time, the black gold trades near $58.75, looking to close the bullish opening gap. The prices jumped to over one-week highs of $59.66 starting out in Asia this Monday, as oil bulls cheered the weekend reports of the Libyan outage.  The Libyan state-run National Oil Corporation (NOC) said on Sunday that two big oilfields in the southwest had begun shutting down after forces loyal to the Libyan National Army closed a pipeline. The news stoked concerns of supply disruption from the OPEC producer, bumping up commodity prices. However, the prices are seeing a pullback over the last hours, in the wake of the agreement by the main backers of the rival Libyan factions at the Berlin Summit for a permanent ceasefire in order to allow a political process to take place, per Reuters.   Further, a fresh buying wave seen in the US dollar against its major peers, mainly driven by aggressive selling in GBP/USD also collaborates with the latest move lower in oil. Meanwhile, the US dollar also continues to draw support from Friday’s strong US economic releases. Attention now turns towards the US weekly Crude Stocks Change data for fresh trading impetus. Meanwhile, the developments surrounding the Libyan conflict will continue to remain the main driver for energy markets this week. Oil markets to focus on impact of Libyan geopolitical crisis - WestpacWTI Technical levels to consider  

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, believes Cable could shed further ground and visit 1.2847. Key Quotes “GBP/USD

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, believes Cable could shed further ground and visit 1.2847. Key Quotes “GBP/USD on Friday traded through the near term downtrend at 1.3062, but did not maintain the break. It was enough however to stop out our short positions. It charted an outside day to the downside and we maintain that there is scope for a slide to the 1.2847 uptrend.” “Below the market lies the December low at 1.2908. Failure here would put the 4 month uptrend at 1.2847 and the 200 day moving average at 1.2688 back on the plate.” “A close above 1.3118 is required to alleviate immediate downside pressure and retarget the Fibonacci resistance at 1.3285.”

EU Trade Commissioner Phil Hogan while speaking in Brussels urged China to make concrete progress on opening up its market. More to come …

The European Union (EU) Trade Commissioner Phil Hogan while speaking in Brussels urged China to make concrete progress on opening up its market. EU is still analyzing the US-China trade deal, Hogan said. More to come …

Open interest in Copper futures markets went down by almost 2.5K contracts on Friday according to CME Group’s preliminary prints. In the same line, vo

Open interest in Copper futures markets went down by almost 2.5K contracts on Friday according to CME Group’s preliminary prints. In the same line, volume reversed the previous build and shrunk by nearly 31.1K contracts. Copper expected to re-test YTD highs Friday’s negative price action in the base metal was accompanied by declining open interest and volume, hinting at the probability that the downside remains capped and allowing at the same time for a potential re-test of 2020 highs around 2.88 and even beyond.

EUR/USD is trading in a weak downtrend below the 200-day simple moving average (SMA). EUR/USD is kicking off the new week trading just below the 1.1100 level

EUR/USD is kicking off the new trading week near January lows.The market is breaching the 1.1100/1.1090 support zone.  EUR/USD daily chart   EUR/USD is trading in a weak downtrend below the 200-day simple moving average (SMA). EUR/USD is kicking off the new week trading just below the 1.1100 level and the 50 SMA.   EUR/USD four-hour chart   The market is trading below the main SMAs, suggesting an underlying bearish momentum. As the market is breaching the January lows in the 1.1100/1.1090 support zone, EUR/USD could continue to decline towards the 1.1067, 1.1033 and 1.1000 levels; according to the Technical Confluences Indicator. In the event the market regains the 1.1125/50 area on a daily closing basis it could invalidate the bearish scenario.      Additional key levels   

The Aussie dollar could debilitate further and re-visit the mid-0.6800s vs. the greenback in the next weeks, suggested FX Strategists at UOB Group. Ke

The Aussie dollar could debilitate further and re-visit the mid-0.6800s vs. the greenback in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted last Friday that AUD ‘could edge lower towards 0.6875’ and added ‘the next support at 0.6850 is likely ‘safe’. AUD subsequently dropped to 0.6871 before ending the day on a soft note at 0.6874. Downward momentum has picked up, albeit not by much. From here, barring a move back above 0.6910 (minor resistance at 0.6895), AUD could drift lower towards 0.6850. For today, a sustained drop below this level appears unlikely.” Next 1-3 weeks: “After closing within 5 pips of 0.6900 for 5 days in a row, AUD dropped sharply last Friday and closed at 0.6874 (-0.34%). The price action gave the waning downward momentum a boost and from here, AUD could move below the month-to-date low of 0.6849 (we highlighted last Friday that a break of 0.6849 is not ruled out just yet). However, there is another strong support at 0.6820 and for now, the prospect of a breach of this level is not high. On the upside, only a move above 0.6935 (‘strong resistance’ level was at 0.6950 last Friday) would indicate that a short-term bottom is in place.”

According to the latest data published by China’s National Bureau of Statistics (NBS), Beijing has made upward revisions to its economic growth by 0.1

According to the latest data published by China’s National Bureau of Statistics (NBS), Beijing has made upward revisions to its economic growth by 0.1 percentage points each year between 2014 and 2018, as the world’s second-largest economy remains poised to achieve its goal of doubling the GDP size by 2020. Key Details: “Annual gross domestic product (GDP) growth for 2014-2018 has been raised to 7.4%, 7.0%, 6.8%, 6.9% and 6.7% from 7.3%, 6.9%, 6.7%, 6.8% and 6.6% previously. Based on the revised figures, real GDP growth of at least 5.6% in 2020 would be enough for achieving Beijing’s target to double GDP in the decade to 2020, according to Reuters calculations, in line with analysts’ estimates. Many China observers generally see this year as crucial for the ruling Communist Party to fulfill its goal of doubling gross domestic product (GDP) and incomes in the decade to 2020, and turning China into a “moderately prosperous” nation.” Meanwhile, in the European session, the USD/CNY pair has staged a solid comeback from a fresh six-month low of 6.8405 reached in late Asia. The spot now trades at 6.8515, marginally positive on the day.

CME Group’s preliminary readings for Crude Oil futures markets noted both open interest and volume went down by almost 45K contracts and around 171.2K

CME Group’s preliminary readings for Crude Oil futures markets noted both open interest and volume went down by almost 45K contracts and around 171.2K contracts, respectively, on Friday. WTI faces strong hurdle at $60.00 The recent recovery in prices of the barrel of WTI appears to be under the microscope amidst shrinking open interest and volume, noting the presence of short covering behind the upside and thus hinting at a probable correction lower in the short-term horizon.

Greece Current Account (YoY) dipped from previous €-0.673B to €-1.392B in November

Moody’s Investors Service, the US-based rating agency, made some comments on the UK economic outlook amid looming Hard Brexit risks and Bank of Englan

Moody’s Investors Service, the US-based rating agency, made some comments on the UK economic outlook amid looming Hard Brexit risks and Bank of England’s (BOE) rate cut calls. Key Quotes: Expects UK economy to slow to 1% GDP growth this year. House price inflation will be flat, at ~0.8% for several years. Brexit challenges will continue to erode consumer confidence. That will also dampen housing activity in the UK. UK credit quality of new securitizations and covered bonds to be stable amid Brexit challenges. The Credit quality of new securitizations and covered bonds in the UK will be stable in 2020 amid low unemployment and interest rates.

In light of advanced data for Gold futures markets, traders added around 1.1K contracts to their open interest positions in Friday, as per CME Group’s

In light of advanced data for Gold futures markets, traders added around 1.1K contracts to their open interest positions in Friday, as per CME Group’s report. Volume, too, went up by almost 13.1K contracts. Gold now targets the Fibo level at $1,574 The ounce troy of the precious metal is seen extending its upside amidst Friday’s rising open interest and volume. That said, the next target emerges at the Fibo retracement (of the December rally) at $1,574.21/oz.

The GBP/JPY cross edged lower for the second consecutive session on Monday, with bears looking to extend the downfall further below the 143.00 round-f

GBP/JPY extends Friday’s UK data-led retracement slide from one-month tops.No-deal Brexit fears, BoE rate cut speculations continue to weigh on the GBP.The GBP/JPY cross edged lower for the second consecutive session on Monday, with bears looking to extend the downfall further below the 143.00 round-figure mark. The cross opened with a modest bearish gap on the first day of a new trading week and added to the previous session's sharp pullback from one-month tops, triggered by dismal UK monthly retail sales figures. Pound weighed down by a combination of factors The incoming UK economic data continues to strengthen the case for a 25bps rate cut by the Bank of England at its upcoming monetary policy meeting on 30 January and weighed heavily on the British pound. The sterling was further weighed down by concerns that Britain will crash out of the European Union at the end of this year, which coupled with reviving safe-haven demand added to the selling bias on Monday. A slightly cautious mood around the global equity markets – amid tensions in the Middle East and Libya – was seen as one of the key factors underpinning the perceived safe-haven demand for the Japanese yen. With Monday's slide, the cross has now reversed a major part of last week's positive move. Some follow-through selling might be seen as a key trigger for bearish traders and pave the way for an extension of the ongoing corrective slide. Technical levels to watch  

In light of the recent price action, EUR/USD could extend the leg lower to the 1.1066 level, noted Karen Jones, Team Head FICC Technical Analysis Rese

In light of the recent price action, EUR/USD could extend the leg lower to the 1.1066 level, noted Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank. Key Quotes “EUR/USD came under increasing downside pressure on Friday and we would allow for a deeper sell off to the uptrend at 1.1066. Given that the intraday Elliott wave signals have turned negative, the risk has increased for a break lower this would target the 1.0981 29th November low and neutralise the immediate outlook.” “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 faces extra downside risks and could drop to the 1.2950 region, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our view for GB

Cable faces extra downside risks and could drop to the 1.2950 region, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our view for GBP to ‘continue to advance towards 1.3105’ last Friday was not wrong as it rose to a high of 1.3120. However, the subsequent sharp sell-off that hit a low of 1.3007 was not expected. The weak opening this morning suggests further decline is likely even though oversold conditions suggest the major 1.2955 support could be out of reach (minor support at 1.2980) for today. Resistance is at 1.3030 and the next level at 1.3060 is expected to be strong enough to cap any intraday rebound.” Next 1-3 weeks: “We highlighted last Friday (17 Jan, spot at 1.3075) that only a break of the ‘strong resistance’ level of 1.3130 would indicate that a short-term bottom is in place. We added, ‘until then, there is still a slim chance of GBP moving below 1.2955’. GBP subsequently popped to a high of 1.3120 before staging a surprisingly sharp decline and ended the day markedly lower at 1.3007 (-0.53%). While the price action suggests that downside risk remains intact, downward momentum has not improved by much. To look at it another way, while GBP could dip below 1.2955, the next support at 1.2900 may not come into the picture. On the upside, the ‘strong resistance’ level has moved lower to 1.3090 from last Friday’s level of 1.3130.”

The single currency is looking to regain some of its shine lost on Friday and is now lifting EUR/USD to the boundaries of the 1.1100 mark, posting mar

EUR/USD moves a tad higher and eyes 1.1100.Spot met support around the 55-day SMA.ECB’s C.Lagarde due to speak later this evening.The single currency is looking to regain some of its shine lost on Friday and is now lifting EUR/USD to the boundaries of the 1.1100 mark, posting marginal gains for the day. EUR/USD focused on USD, ECB The pair came under heavy selling pressure on Friday in response to a sharp pick-up in the demand for the greenback, all on the back of positive results from some US indicators, higher yields and the prevailing risk-on sentiment. However, the decline in the spot was once again contained around the 1.1090 area, where sits the key 55-day SMA. Below this area, the pair is expected to accelerate the decline to, initially, the 10-day SMA AROUND 1.1065. In the docket, German Producer Prices rose 0.1% MoM during December and contracted 0.2% from a year earlier. Later in the European evening, ECB’s Christine Lagarde will participate in the Eurogroup meeting in Brussels and will attend an event in Germany. What to look for around EUR The pair dropped and tested the key 55-day SMA at the end of last week mainly in response to USD-dynamics, at the same time hinting at the likeliness that the 1.1180 region could be an interim top. Further out, markets’ focus is now seen shifting to a more data-dependent stance while China and the US warm up for the ‘Phase 2’ negotiations. On the more macro view, the slowdown in the region remains far from abated 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 gaining 0.03% at 1.1091 and faces the next up barrier at 1.1135 (200-day SMA) followed by 1.1172 (weekly high Jan.16) and finally 1.1186 (61.8% of the 2017-2018 rally). On the downside, a breakdown of 1.1086 (weekly low Jan.17) would target 1.1085 (2020 low Jan.10) en route to 1.1065 (100-day SMA).

Hong Kong SAR Unemployment rate above expectations (3.2%) in December: Actual (3.3%)

According to Carsten Brzeski, Chief Economist at ING Germany, this week's European Central Bank meeting should be rather uneventful regarding monetary

According to Carsten Brzeski, Chief Economist at ING Germany, this week's European Central Bank meeting should be rather uneventful regarding monetary policy but the official start of the strategy review should be the highlight. Key Quotes: “Waiting for more guidance on growth and inflation developments, the highlight of this week’s meeting should be the announcement of the official start of the strategy review. A lot has been said and speculated, both by market participants and ECB officials. Now, with all changes in the ECB’s Executive Board behind us, it is time to set out some parameters like, for example, scope and timing of the review. Christine Lagarde already gave some ideas at the December meeting, also stating that in her view the review should be concluded before the end of the year.” “In this regard, decisions to include external parties, be it academics, politicians, ‘ordinary people’ or other interest groups would have a clear impact on the length of the process, making the deadline of end-2020 more ambitious than it currently sounds. According to Lagarde, the review would also look at the monetary policy instruments. A recent working paper of more than 300 pages by influential ECB officials already gives an idea of where the ECB currently stands.” “In our view, the most important part of the review will be an assessment of the definition of price stability and how to reach it. We still think that eventually, a new definition (of “around 2%) would institutionalise symmetry while at the same time provide maximum flexibility; more than any point range would offer.”

EUR/JPY daily chart After Friday’s bearish candle, the spot is starting the week near its lowest in the last four trading sessions just above the 122

EUR/JPY wedge pattern can lead to further losses. The level to beat for bears is the 122.10 support.  EUR/JPY daily chart   After Friday’s bearish candle, the spot is starting the week near its lowest in the last four trading sessions just above the 122.00 handle.  EUR/JPY four-hour chart   The spot broke a wedge formation to the downside while challenging the 122.10 support and the 50-period simple moving average (SMA) on the four-hour chart. In the event bulls fail to regain the 122.42 resistance, the market is set to trade sideways to down with a potential bearish break below the 122.10 which can lead to 121.78 and 121.28 levels, according to the Technical Confluences Indicator. Additional key level  

The USD/CHF pair was seen oscillating in a narrow trading band below the 0.9700 mark on Monday and consolidated the previous session's goodish positiv

USD/CHF consolidates Friday’s goodish intraday positive move.The prevalent cautious mood seemed to have capped the upside.The USD/CHF pair was seen oscillating in a narrow trading band below the 0.9700 mark on Monday and consolidated the previous session's goodish positive move. A combination of supporting factors helped the pair to gain some follow-through positive traction for the second consecutive session on Friday and build on the previous session's modest recovery from multi-month lows. Bulls seemed reluctant amid cautious mood The latest optimism over the long-awaited US-China phase one trade deal remained supportive of the recent risk-on rally across the global financial markets and continued weighing on the Swiss franc's perceived safe-haven status. On the other hand, the US dollar was underpinned by expectations that the US economy will continue to expand and reduced odds of any further interest rate cuts by the Fed, which provided an additional boost to the pair. The greenback managed to preserve its recent gains to monthly tops, albeit a slightly cautious mood – amid tensions in the Middle East and Libya – kept a lid on any further positive move amid relatively lighter turnover on the back of a holiday in the US. The US markets will remain closed on Monday in observance of Martin Luther King Day. Hence, the broader market risk sentiment might continue to play a key role in influencing the price action and produce some meaningful trading opportunities. Technical levels to watch  

According to the latest opinion piece carried by Bloomberg on Monday, the Indonesian rupiah is likely to emerge as Asia’s beat performing currency thi

According to the latest opinion piece carried by Bloomberg on Monday, the Indonesian rupiah is likely to emerge as Asia’s beat performing currency this year, replacing the Thai baht that saw a massive lead in 2019. Key Quotes: “The nation’s local-currency bonds offer yields of between 5% to 8%, an alluring prospect for investors looking to put on carry trades that seek to capitalize from the difference in interest rates between two countries.  Just as important as the yield allure has been the tolerant attitude of the central bank. Whereas policy makers generally seek to limit currency gains to support exports, Bank Indonesia said Jan. 10 it would refrain from limiting the rupiah’s strength as long as it reflected the improving economy and volatility was manageable.  The currency extended gains into the next trading session after the United Arab Emirates said it had agreed to set aside $22.8 billion to invest in Indonesia’s sovereign wealth fund, joining Japan’s SoftBank Group Corp. and US International Development Finance Corp. in giving the nation a vote of confidence. For the currency to finish top of the league table this year it has to outperform its peers. Here again there’s positive news. Last year’s best performers -- the Thai baht and Philippine peso -- are both facing challenges that should prevent them from replicating 2019’s gains.”

USD/INR extended last week’s recovery momentum into Monday, as the bulls reached a new six-day high at 71.122 before entering a phase of consolidation

USD/INR lifted by broad USD strength and Libya woes-led oil rally.Dollar demand from Indian importers negates foreign inflows. Further upside looks likely amid holiday-thinned trading.USD/INR extended last week’s recovery momentum into Monday, as the bulls reached a new six-day high at 71.122 before entering a phase of consolidation just ahead of the 71 level. The stalled buying in the spot is mainly due to a doji candlestick formed on the daily chart that likely suggests buyers’ exhaustion. Further, a bullish consolidative mode seen in oil prices over the last hours seems to be capping the losses in the Indian rupee, in turn stemming the move higher. The cross, however, remains supported by broad-based US dollar strength induced by impressive US economic data released on Friday and increased US dollar demand from the Indian importers. Moreover, importers’ demand appears to negate the substantial foreign fund inflows. Additionally, the weakness in the Indian equities amid profit-taking also seems to be weighing on the local currency while the rally in oil prices on Libyan oilfields shutdown collaborates with the rupee downslide and keeps the pair underpinned. Markets will keep an eye on the broader market sentiment for fresh trading impetus while holiday-thinned trading could exaggerate the dollar moves. The US markets are closed today in observance of Martin Luther King day. USD/INR Technical levels to consider  

The US Dollar Index (DXY) is trading near the January highs while challenging a descending trendline originating from October 2019.

DXY is starting the new week near the January highs. Resistance is at 97.70 while support is seen at the 97.55. A break below 97.55 can lead to a deeper pullback down.   DXY daily chart   The US Dollar Index (DXY) is trading near the January highs while challenging a descending trendline originating from October 2019.      DXY four-hour chart   DXY is trading above the main simple moving averages (SMAs) and a rising trendline, suggesting a bullish bias. Bulls will need a break above the 97.70 resistance to travel towards 97.85 and to a larger breakout to 98.20. However, the market might enter a consolidation first with a potential pullback down below the 97.55 level. Support is seen at the 97.35 and 97.20 levels.    Additional key levels   

The USD/CAD pair remained on the defensive through the early European session on Monday, albeit held well within the previous session's broader tradin

USD/CAD pair failed to capitalize on Friday’s goodish intraday positive move.A pickup in oil prices underpinned the loonie and capped any meaningful upside.The prevailing bullish sentiment around the USD seemed to help limit the downside.The USD/CAD pair remained on the defensive through the early European session on Monday, albeit held well within the previous session's broader trading range. The pair failed to capitalize on Friday's intraday positive move and once again failed near the 1.3070-75 supply zone amid a goodish pickup in crude oil prices, which tend to underpin demand for the commodity-linked currency – the loonie. Traders preferred to stay on the sidelines Oil prices climbed over 1% on the first day of a new trading week amid concerns over output and exports from key OPEC producers. Iraq temporarily stopped output at an oil field on Sunday while political unrest has reemerged in Libya. Supply from the second site in Iraq is at risk as widespread unrest escalates in OPEC’s second-biggest producer. In Libya, National Oil Corp. declared force majeure after Commander Khalifa Haftar blocked exports at ports under his control. On the other hand, the US dollar remained well supported by expectations that the US economy will continue to expand and reduced odds of any further interest rate cuts by the Fed, which eventually helped limit the downside, at least for now. Moreover, investors also seemed reluctant to place any aggressive bets on the back of a holiday in the US and might prefer to stay on the sidelines ahead of the key event risk – the latest BoC monetary policy update on Wednesday. The fundamental set-up points to an extension of the pair's range-bound price action, making it prudent to wait for a sustained move in either direction before traders start positioning for the near-term trajectory. Technical levels to watch  

USD/JPY is consolidating its January spike above the 110.00 handle and the main simple moving averages (SMAs). The market is trading near its highest since mid

USD/JPY is evolving in a rising wedge formation. Resistance is at 110.35 while support is seen at the 110.05 level.   USD/JPY daily chart   USD/JPY is consolidating its January spike above the 110.00 handle and the main simple moving averages (SMAs). The market is trading near its highest since mid-May 2019.    USD/JPY four-hour chart     USD/JPY is trading in a wedge-shaped pattern while above the main SMAs. If the bulls fail to regain the 110.35 level, the market can remain sideways with increasing odds for a potential down move. If the bears breach 110.05 support, the spot could decline towards the 109.85 and 109.55 levels, according to the Technical Confluences Indicator. On the flip side, a break above 110.35 can open the gates to 110.52 and 110.69.      Additional key levels   

The Danske Bank Research Team highlights key macroeconomic events of note in the week ahead, with the central bank likely to hog the limelight. Key Qu

The Danske Bank Research Team highlights key macroeconomic events of note in the week ahead, with the central bank likely to hog the limelight. Key Quotes: “Central banks will take centre stage this week with the meetings at Norges Bank and the ECB (both Thursday) and Bank of Japan (Tuesday); see previews of the former two in box. We will also get more news on the pace of the global recovery with the release of flash PMIs for the euro area, the US, Japan and the UK (all Friday). Equity markets will continue to focus on the earnings season, which is off to an encouraging start. Today looks set to be a quiet start to the week calendar-wise with only Norwegian industrial confidence for Q4 due for release.”

The AUD/USD pair regained some positive traction on the first day of a new trading week and recovered a part of the previous session's slide to one-we

AUD/USD witnessed some follow-through selling on Friday amid broad-based USD strength.The prevailing risk-on mood trade optimism helped regain some positive traction on Monday.The upside seems more likely to remain limited on the back of a holiday in the US markets.The AUD/USD pair regained some positive traction on the first day of a new trading week and recovered a part of the previous session's slide to one-week lows. The pair extended the previous session's pullback from the 0.6935 region and witnessed some follow-through selling for the second consecutive session on Friday amid broad-based US dollar strength to fresh monthly tops. The greenback remained supported by the incoming positive economic data, which added to expectations that the US economy will continue to expand and reduced odds of any further rate cuts by the Fed. The risk-on mood helped limit the downside The pair weakened back below the very important 200-day SMA and settled near the lower end of its weekly trading range, around the 0.6870 level, albeit the prevalent risk-on mood helped limit further losses. The recent optimism over US-China phase one trade deal remained supportive of the bullish sentiment across the global equity markets and extended some support to perceived riskier currencies – like the aussie. Further gains, however, are likely to remain limited amid relatively lighter turnover on the back of a holiday in the US – in observance of Martin Luther King Day – and absent relevant market-moving economic data. Hence, it will be prudent to wait for a sustained move back above the 0.6900 round-figure mark before traders again start placing any fresh bullish bets and positioning for any further near-term appreciating move for the major. Technical levels to watch  

Germany Producer Price Index (MoM) meets forecasts (0.1%) in December

Germany Producer Price Index (YoY) above expectations (-0.6%) in December: Actual (-0.2%)

GBP/USD has been on the back foot after weak UK data and concerns about Brexit. Where next? The Technical Confluences Indicator is showing that cable

GBP/USD has been on the back foot after weak UK data and concerns about Brexit. Where next? The Technical Confluences Indicator is showing that cable is struggling around the 1.2998 area, which is the convergence of the Bollinger Band 15min-Lower, the Simple Moving Average 5-15m, and the SMA 10-15m. Looking down, significant support awaits at 1.2943, which is where the Pivot Point one-day Support 2, and the PP one-week S1 meet.  Looking up, robust resistance is at 1.3019, which is the confluence of the Fibonacci 38.2% one-week, the BB 1h-Middle, the previous daily low and the SMA 5-4h.  Higher, pound/dollar faces several hurdles, with the most important juncture waiting at 1.3056, which is where the BB 1h-Upper, the Fibonacci 38.2% one-day, and the Fibonacci 61.8% one-week all hit the price.   This 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. This means 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

In opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the pair could attempt a move to the 0.9710 region. Key Quotes “

In opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the pair could attempt a move to the 0.9710 region. Key Quotes “USD/CHF is seeing a short-term bounce off its current January low at .9613 with positive divergence being seen on the daily RSI. This reflects a loss of downside momentum. It looks capable of challenging the two month downtrend line at .9710. A break above here will target the .9762 10th January peak.” “Were the .9613 recent low to be slipped through in the days ahead, however, the September 2018 low at .9543 would be in focus. Slightly longer term we look for a fall back to the 2018 low at .9188, this is also the 38.2% retracement of the same move from 2015.”

Preliminary figures for JPY futures markets saw open interest shrinking by just 171 contracts on Friday according to CME Group. In the same direction,

Preliminary figures for JPY futures markets saw open interest shrinking by just 171 contracts on Friday according to CME Group. In the same direction, volume extended the downtrend and drop by around 1.9K contracts. USD/JPY now eyes the 110.70 regionUSD/JPY has eased a tad on Friday on the back of renewed JPY-buying. However, declining open interest and volume should leave bouts of JPY-strength limited and therefore favour the continuation of the rally in the pair to, initially, the 110.65/70 band.

Here is what you need to know on Monday, January 20: GBP/USD is under pressure after the UK Chancellor of the Exchequer Sajid Javid said that the UK m

Here is what you need to know on Monday, January 20:GBP/USD is under pressure after the UK Chancellor of the Exchequer Sajid Javid said that the UK may stray away from EU rules after Brexit. Concerns about fraught EU-UK trade talks have been weighing on investors' mood.Oil prices have advanced with WTI nearing $60 once again. In Libya, warlord Khalifa Haftar has blocked oil exports from the part of the country he controls, knocking down 800,000 barrels out of global supply. Protests in Iraq have also limited output.  The US dollar is holding onto its gains against majors from late last week, as upbeat US retail sales and consumer confidence kept the greenback bid. See US consumer sentiment flourishes in January.US markets are closed on Monday, limiting liquidity. Ahead of the Chinese New Year holiday, authorities pumped around 200 billion yuan into the financial system. AUD/USD and NZD/USD are bid. President Donald Trump and other politicians and business leaders are descending on Davos, Switzerland, for the World Economic Forum.Cryptocurrencies have fallen off the highs with Bitcoin trading below $8,700 after topping $9,000 over the weekend. Other digital coins made the same round trips.

FX option expiries for Jan 20 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1015 979m 1.1100 756m 1.1105 692m 1

FX option expiries for Jan 20 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1015 979m 1.1100 756m 1.1105 692m 1.1200 796m - GBP/USD: GBP amounts 1.3000 320m - USD/JPY: USD amounts 108.75 500m 109.40 1.1bn 110.00 431m - AUD/USD: AUD amounts 0.6920 962m  - NZD/USD: NZD amounts  0.6625 374m

CME Group’s advanced figures for GBP futures markets noted investors added just 241 contracts to their open interest position at the end of last week,

CME Group’s advanced figures for GBP futures markets noted investors added just 241 contracts to their open interest position at the end of last week, reversing two pullbacks in a row. In the same line, volume rose by around 13K contracts following three consecutive drops. GBP/USD seen holding on around 1.30Cable is adding to Friday’s decline amidst rising open interest and volume. That said, while further downside remains on the cards, the 1.30 region is expected to remain a key magnet in the near-term.

Kaushik Das, Deutsche Bank India Chief Economist, said in his latest client note on Monday, any change in stance by the Reserve Bank of India (RBI) in

Kaushik Das, Deutsche Bank India Chief Economist, said in his latest client note on Monday, any change in stance by the Reserve Bank of India (RBI) in February would be seen as premature, with price pressure likely to ease ahead. Key Quotes: “The MPC should wait for more evidence related to the evolving food price trend before making any change to the current monetary policy stance. It could well be that the MPC decides to change the stance to neutral on 6th Feb, only to be followed by sharp disinflation in vegetable and overall food prices from that month onward. India's retail inflation jumped to 7.35% on year in December, highest in over five years, leading to speculation of prolonged pause from MPC and change in policy stance to neutral from accommodative. April policy would be ideal to consider need to change stance.” USD/INR: Mildly positive near 71.00 with eyes on macros

XAU/USD is trading in a bull trend above the main simple moving averages (SMAs). After a rejection of the 1600 mark earlier in January, the market is now grind

Gold is starting the new week with bulls attempting to take the lead. There is a strong resistance near 1563 which needs to be broken.   Gold daily chart   XAU/USD is trading in a bull trend above the main simple moving averages (SMAs). After a rejection of the 1600 mark earlier in January, the market is now grinding to the upside again.    Gold four-hour chart   Gold is challenging the 1563 resistance as the market is trading in a rising channel above the main SMAs. A break above this level can see the metal appreciating towards the 1570 and 1580 resistance levels. On the flip side, failure at the 1563 level, can lead to a tight range just below the level and a potential deeper pullback towards the 1555 and 1550 levels.   Additional key levels   

Ho Woei Chen, CFA, Economist at UOB Group, expects the Bank of Korea (BoK) to leave the policy rate unchanged throughout the current year. Key Quotes

Ho Woei Chen, CFA, Economist at UOB Group, expects the Bank of Korea (BoK) to leave the policy rate unchanged throughout the current year. Key Quotes “Bank of Korea (BOK) left its benchmark interest rate unchanged at a record low of 1.25% [on Friday], in line with consensus and our expectation. The rate decision was again not unanimous with 2 out of 7 board members supporting a rate cut. Despite having one more dissenting member this month, BOK’s assessment of economic growth has improved as it judged that “the sluggishness in the domestic economy has eased somewhat” while uncertainties remain. It said that the current growth and inflation trajectory is still in line with projections made in November.” “The statement suggests that BOK’s monetary policy stance has turned more neutral. The central bank had cut interest rate twice in 2019, at the July and October meetings. With the stabilization in the global trade environment, the BOK is unlikely to rush into further easing.” “Barring an unexpected downturn in growth this year, we maintain our forecast for the BOK to be on hold at 1.25% through 2020. Expected changes to the make-up of the monetary policy board in April as tenures of four members would be expiring, may have some bearing on the rate decisions going forth.”

According to flash data for EUR futures markets from CME Group, open interest rose by nearly 3.8K contracts on Friday. Volume, instead, reversed to co

According to flash data for EUR futures markets from CME Group, open interest rose by nearly 3.8K contracts on Friday. Volume, instead, reversed to consecutive daily pullbacks and shrunk by around 5.3K contracts. EUR/USD looks supported by the 55-day SMA Friday’s moderate pullback in EUR/USD was on the back of rising open interest and declining volume, favouring some consolidation in the near-term. That said, while the 55-day SMA in the 1.1090 area is expected to offer solid contention, a move below this level should not be ruled out.

Economist How Woei Chen, CFA, at UOB Group assesses the recent GDP figures in China and prospects for this year. Key Quotes “In line with our forecast

Economist How Woei Chen, CFA, at UOB Group assesses the recent GDP figures in China and prospects for this year. Key Quotes “In line with our forecast, China’s 4Q19 GDP growth stabilized at 6.0% y/y (3Q19: 6.0%) while q/q SA growth edged higher to 1.5% from 1.4% in 3Q19. For the full year, the Chinese economy expanded by 6.1% in 2019, down from 6.6% in 2018. China’s GDP growth has remained in line with the government’s target of 6%-6.5% through 2019.” “While secondary industry growth rebounded to 5.8% y/y in 4Q19 from 5.2% in 3Q19, the slowdown in tertiary industry growth to 6.6% (3Q19: 7.2%) which is the lowest on record (data series from 1992) has cast a pall on the outlook.” “We continue to expect China’s economic growth to slow further in 2020 due to the structural reforms and ongoing supply chain diversification. We are maintaining our growth forecast for 2020 GDP growth at 5.9% (1Q20F and 2Q20F: 5.9%y/y). This would be the slowest growth pace since the low of 3.9% in 1990.” “Against this backdrop of growth moderation, we expect counter-cyclical measures including accommodative monetary policy, acceleration in infrastructure spending and potential reductions in government tax and fees to be maintained.”

Following Wall Street’s notable gains on Friday, Asian stocks extend their northward trajectory ahead of Monday’s European session.

MSCI’s index of Asia-Pacific shares nears the 20-month top, Japan’s NIKKEI rises to the highest since September 2018.The US-led optimism pleases equity traders in Asia.Geopolitical tensions emanating from the Middle East gain a little attention as the US markets are off.Following Wall Street’s notable gains on Friday, Asian stocks extend their northward trajectory ahead of Monday’s European session. In doing so, MSCI’s gauge of leading Asia-Pacific equities, except for Japan, near 714.00 to revisit the early 2018 tops whereas Japan’s NIKKEI gains 0.20% to 24,095 to mark 15-month high. Traders seem to shrug off early-day advances in oil prices that benefited from the likely supply outage in Libya and Iraq due to geopolitical reasons. This could be attributed to the absence of the US traders as well as a lack of major data/events during the Asian session. The People’s Bank of China (PBOC) announced no change in its Loan Prime Rate (LPR) while Japan’s November month Industrial Production also marked fewer changes. With this, Chinese equities remain mildly bid while Hong Kong’s HANG SENG declines on fresh news of violence. Further, Australia’s ASX 200 rushed to record highs, +0.22% to 7,080, but New Zealand’s NZX 50 fails to lure buyers amid a close in markets at Wellington. Markets in India portray worries of a likely decline in tax revenue collection, with the headlines BSE SENSEX losing 0.5% to 41,740, whereas South Korea’s KOSPI benefits from leadership changes into the industry heavyweight Samsung Electronics. Bond markets are showing no major changes as the US traders are off due to the Martin Luther King’s Birthday whereas S&P 500 Futures mark 0.03% gains while flashing 3,325 as a quote. Investors will have little clues looking forward except for the German Buba monthly report and PPI data. However, headlines from the World Economic Forum (WEF) gathering in Davos could offer intermediate moves to the markets.

Amid increased government support from both China and Australia to support the economy, investors ignored the latest Mid East flare-up concerning Liby

Amid increased government support from both China and Australia to support the economy, investors ignored the latest Mid East flare-up concerning Libya, as the risk-on sentiment extended into Asia this Monday. Oil prices rallied to more than a week’s high after Libya’s state-run National Oil Corporation (NOC) said on Sunday that two big oilfields in the southwest had begun shutting down after forces loyal to the Libyan National Army closed a pipeline. Gold prices, on the other hand, failed to benefit from geopolitical tensions and remained on the back foot below $1560. In reaction to the weekend headlines, the market mood was somber starting out the week but improved gradually after China said the government will be able to “ensure the smooth operation of the industrial economy” by providing big tax cuts and policy efforts. Meanwhile, the Australian government announced a support package for small businesses affected by bushfires. In lieu of these measures, the Chinese yuan above 6.8500 levels vs. the greenback while the Aussie bounced-off lows and held onto the recovery gains near 0.6885 region. The Kiwi tracked its OZ peer higher and traded firmer on the 0.6600 level.  The Canadian dollar ignored the rally in oil prices and traded almost unchanged against its American rival around 1.3060 region. Meanwhile, USD/JPY recovered to near 110.20 region but lacked follow-through despite positive Asian equities and Treasury yields. Among the European currencies, EUR/USD remained below the 1.11 handle but found support from the rise in the yuan while GBP/USD posted small losses near 1.3000, pressured by broad US dollar strength amid UK/US macro divergence. Main Topics in Asia Oil exports slashed by half in Libya ahead of the summit in Germany UK Finance Minister, Sajid Javid, has admitted businesses will be hit by Brexit – Reuters Pompeo sees progress towards ceasefire in Libya at Berlin summit - Reuters PBOC keeps one-year loan prime rate steady at 4.15% China needs time to consider impact of tradedeal - Global Times Europe can benefit from China-US phase one trade deal - Global Times BOJ's next move likely to be withdrawal of stimulus - Reuters poll Australia's Frydenberg: Full economic impact of bushfires remains uncertain Key Focus Ahead        Looking at the EUR macro calendar this Monday, there is nothing of relevance except for the second-tier German Producer Price Index (PPI) and Bundesbank’s (Buba) Monthly Economic Assessment Report. The UK docket is absolutely data-empty and therefore developments surrounding the EU-UK post-Brexit trade deal and UK politics will take the center stage. The NA session is also a quiet one, as the US markets closed in observance of Martin L. King's Birthday while there is no macro news from Canada. Markets will pay close attention to the Mid-East geopolitical tensions, especially pertaining to Libya and its impact on the market sentiment as well as on oil prices. EUR/USD: On the defensive after Friday's drop EUR/USD is looking weak, having registered its biggest single-day decline in over two weeks on Friday. The pair, therefore, risks falling to the support at 1.1063 – the support of the trendline connecting lows seen on Oct, 1 and Nov. 29.  GBP/USD: Brexit woes, calls for BOE’s rate cut depress traders around 1.3000 GBP/USD holds steady around the 1.30 handle while heading into the London open on Monday. The pair came under pressure on Friday amid increasing odds of the BOE’s rate cut and Brexit-negative headlines. Forex Weekly Outlook – The BOJ will likely keep its powder dry for some time While Mid-East tensions calmed down, trade and the US consumer rocked the dollar. What’s next? Rate decisions in the Eurozone, Japan and Canada stand out. Here the highlights for the upcoming week. The conflict in Libya will be a focus for oil traders this week Turkey, Russia and Libya will be a focus for the week ahead as tensions escalate with the closure of Eastern Libya ports.  

The euro is trading in a weak bear trend below the 200-day simple moving average (SMA). EUR/USD is starting the new week just below the 1.1100 level and the 50

EUR/USD is starting the new trading week near January lows.A bounce from current price levels can lead to 1.1125 and 1.1150.  EUR/USD daily chart   The euro is trading in a weak bear trend below the 200-day simple moving average (SMA). EUR/USD is starting the new week just below the 1.1100 level and the 50 SMA.   EUR/USD four-hour chart   The spot is trading below its main SMAs, suggesting an underlying bearish bias. However, the market is challenging the January lows in the 1.1100/1.1090 support zone. At the start of the new week, if the bulls defend this area EUR/USD is more likely to bounce in the London session. Potential targets to the upside can be seen near 1.1125 and 1.1150.    On the flip side, if the market decides to breach 1.1100/1.1090 support zone, EUR/USD could continue to drop towards the 1.1067, 1.1033 and 1.1000 levels; according to the Technical Confluences Indicator.   Additional key levels   

The greenback, in terms of the US Dollar Index (DXY), is trading without a clear direction at the beginning of the week in the 97.60 region. US Dollar

DXY stays close to the key 200-day SMA.The dollar trades in multi-week highs.US docket is empty on Monday.The greenback, in terms of the US Dollar Index (DXY), is trading without a clear direction at the beginning of the week in the 97.60 region. US Dollar Index targets the 200-day SMA The index managed to clinch fresh multi-week highs in the boundaries of 97.70 on Friday, where sits the critical 200-day SMA, always on the back of auspicious data releases in the US calendar and a broad-based improvement in the risk appetite trends. In fact, the better mood in the risk complex during the second half of last week – particularly since the US and China signed the ‘Phase 1’ trade deal - sent US yields and stocks higher, accompanying the positive performance of the buck. There are no publications/events in the US docket on Monday, leaving the broader risk appetite trends as the exclusive driver of the price action in the global markets. What to look for around USD DXY regained upside momentum during last week and managed to record fresh 2020 highs in the proximity of 97.70, always sustained by positive results and the prevailing risk-on trade. In the meantime, investors are now looking to domestic data releases for direction in the near-term and further bullish attempt in the buck should keep targeting the key 200-day SMA in the 97.70 region. Above this level, DXY should regain the constructive view, always underpinned 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 losing 0.02% at 97.62 and a breakout of 97.66 (2020 high Jan.17) would open the door to 97.70 (200-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the other hand, initial contention 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).  

EUR/GBP takes the bids to 0.8540 while heading into the European session on Monday. The pair recently took a U-turn from 21-day EMA, amid bullish MACD.

EUR/GBP extends recovery gains amid bullish MACD.100-day EMA adds to resistance.Five-week-old rising trend line could question sellers below 21-day EMA.EUR/GBP takes the bids to 0.8540 while heading into the European session on Monday. The pair recently took a U-turn from 21-day EMA, amid bullish MACD, which in-turn shifts market focus to the near-term key resistance. As a result, a downward sloping trend line since November 22, at 0.8600 now, will be important to watch. Given the pair’s daily closing beyond 0.8600, a 100-day EMA level of 0.8630 can lure the buyers. It’s worth mentioning the 0.8570 can offer intermediate halt to the pair while November top surrounding 0.8660 and 0.8700 may please the bulls afterward. On the flip side, pair’s declines below 21-day EMA level of 0.8520 can fetch it to the immediate support line, at 0.8450. It should, however, be noted that the pair’s fall under 0.8450 will highlight a monthly low near 0.8365 for the bears. EUR/GBP daily chart Trend: Recovery expected  

Reuters reports the latest comments from the Australian treasurer, Josh Frydenberg, as he speaks about the impact of the Australian bushfire on the ec

Reuters reports the latest comments from the Australian treasurer, Josh Frydenberg, as he speaks about the impact of the Australian bushfire on the economy. Frydenberg said that the full economic impact of bushfires remains uncertain. Further Details: The Australian government has announced a support package for small businesses affected by bushfires. The support package includes low-interest loans of up to 500,000 Australian dollars (343,751 US dollars) to businesses that lost significant assets in fires that have devastated much of the country since September. Businesses and organizations damaged by fires will also be eligible to receive grants of up to 50,000 AUD (34,375 U.S. dollars) tax-free. "This comprehensive package will make it easier for those who have suffered direct fire damage, or have been indirectly economically impacted following the bushfires, to get back on their feet," the statement read.

Despite pulling back from the intra-day high of 71.30, USD/INR stays positive while taking rounds to 71.07 during the pre-European session on Monday.

USD/INR awaits fresh clues to extend the recent recovery.Expectations of downbeat tax collection and strong oil prices weigh on the Indian rupee (INR).The absence of the US traders and major catalysts on the economic calendar will keep news headlines in the spotlight. Despite pulling back from the intra-day high of 71.30, USD/INR stays positive while taking rounds to 71.07 during the pre-European session on Monday. The pair initially benefited from the optimism surrounding Asian economies, led by China, but fails to conquer the broad US dollar strength amid domestic challenges to India. India’s former finance secretary Subhash Chandra Garg recently showed concerns while saying that the government's tax collection is likely to fall short of its estimate by Rs 2.5 lakh crore or 1.2% of GDP in 2019-20. Time to junk DDT (dividend distribution tax) and reform personal income tax.” While the government’s efforts to open gates for the Foreign Portfolio Investors (FPI) have helped the Asian economy, investments in equity-oriented mutual fund schemes in 2019 saw a sharp drop of 41% in 2019 as per the Money Control. Recent data from India have been mixed and the same push the Australia and New Zealand Banking Group (ANZ) to anticipate a rate cut from the Reserve Bank of India (RBI) in June. The ANZ bank said, “the pick-up in consumption indicators, which we highlighted last month, has now expanded to some activity indicators. While noteworthy, we do not envisage a robust recovery in the near term. Financial sector problems and excess capacity preclude a strong rebound. There is room for the RBI to deliver one more rate cut in June, but fiscal space is limited.” Markets in Asia reached the highest in 20-month during the early-day but seem to fade the momentum strength amid a lack of major catalysts and strong prices of crude, mainly due to geopolitical tension in Libya and Iraq. The US markets are off due to Martin Luther King’s Birthday while no major data/event is up from India and hence the qualitative catalysts will be the key to watch. Technical Analysis FXStreet Analysis Omkar Godbole highlights 10-day MA as the key immediate upside barrier while saying: USD/INR jumped 0.17% on Friday, confirming a sideways channel breakout on the hourly chart. The breakout indicates the sell-off from the monthly high of 72.12 has ended. The pair, however, needs to close above the descending or bearish 10-day moving average (MA) to confirm a reversal higher.  Currently, the 10-day MA is located at 71.23. A failure to hold above the key hurdle would invalidate the breakout on the hourly chart and shift risk in favor of a re-test of 70.90.  A move through that support could bring additional losses toward 70.6990 (Jan. 14 low).   

Analysts at Australia and New Zealand Banking Group (ANZ) provide their afterthoughts on the US economic data released last Friday. Key Quotes: “Housi

Analysts at Australia and New Zealand Banking Group (ANZ) provide their afterthoughts on the US economic data released last Friday. Key Quotes: “Housing starts surged 16.9% m/m in December with the residential sector benefitting from low interest rates, rising wealth, rising real incomes and a healthy jobs market. The last time they were rising at the current rate of 1,608k saar was 2003. It is way above the long-run average of 1,428k. Residential construction is set to be a significant contributor to growth this year. That said, building permits fell 3.9% in December, more than twice the fall expected. December manufacturing output rose 0.2% m/m, despite the 0.3% fall in industrial production, which was led by a sharp fall in utilities (-5.6% m/m). The manufacturing index is now back at its strongest level since August, and the monthly lift in manufacturing came about despite a 4.6% m/m fall in auto parts production. Excluding the auto sector, manufacturing output rose 0.5% m/m. Output of non-durable goods rose 0.6% m/m. Finally, University of Michigan consumer sentiment was stable in early January at 99.1 vs 99.3 at the end of December. At the same time, inflation expectations rose, and, while that is welcome news, those expectations are influenced by the oil price and could have been influenced by Middle East tension.”

Following its brief dip beneath 1.3000, to the intra-day low of 1.2994, GBP/USD seesaws near 1.3000 while heading into the London open on Monday.

GBP/USD bears the burden of downbeat data, worries concerning Brexit.The UK Chancellor Sajid Javid signaled harsh Brexit, challenges to the businesses.A slew of downbeat data favors the BOE’s recently dovish tone.Following its brief dip beneath 1.3000, to the intra-day low of 1.2994, GBP/USD seesaws near 1.3000 while heading into the London open on Monday. The pair came under pressure on Friday amid increasing odds of the BOE’s rate cut whereas the recent Brexit-negative headlines offered fresh downside to the quote. Not only the pessimism spread through the comments of the UK’s Finance Minister, Sajid Javid, but news from the UK Express also threatened the Brexit optimists. The headlines relied on the report while saying that the UK PM Boris Johnson will impose restrictions on low-skilled migrants who wish to come to the UK on the first day after the Brexit transition period ends in December. This will increase the hardships of the EU-UK trade talks and increase the odds of a harsh Brexit. The downbeat prints of the UK Retail Sales, published Friday, pleased the BOE doves ahead of the month-end monetary policy meeting. Earlier in the month, the BOE Governor Mark Carney highlighted fears of Brexit and renewed risks of a rate cut from the British central bank. On the other hand, the US dollar remains positive after a slew of positive economics pushes the US Federal Reserve to rethink their “wait and watch” approach. The market’s risk tone remains mostly sluggish amid the absence of US traders and a lack of major data/events on the economic calendar. The same could be witnessed in Asian stocks. Looking forward, traders will keep eyes on the trade/Brexit headlines for fresh impulse while Tuesday’s headlines employment data from the UK will be the key to watch. Technical Analysis A daily closing below an upward sloping trend line since early-November, at 1.2985 now, can fetch the quote further down to 100-day SMA near 1.2800.  

Japan Industrial Production (YoY) below expectations (-8.1%) in November: Actual (-8.2%)

Japan Industrial Production (MoM) came in at -1%, below expectations (-0.9%) in November

Japan Capacity Utilization came in at -0.3%, below expectations (0.7%) in November

The latest Reuters poll of economists revealed that the Bank of Japan’s (BOJ) next monetary policy move is likely to be the tapering of its massive st

The latest Reuters poll of economists revealed that the Bank of Japan’s (BOJ) next monetary policy move is likely to be the tapering of its massive stimulus. Key Findings: “Among the 41 economists polled by Reuters Jan. 6-17, 24 said the BOJ's negative rate policy did not help the economy and prices, while 17 said they did. The poll also showed 28 of 42 economists, or 67%, expect the BOJ's next step to be a withdrawal of stimulus, up from 61% in the December poll. Those who predicted such action said it would happen sometime next year or later, the poll showed. The ratio of those who predict the BOJ's next move to be an expansion of stimulus stood at 33%, down from the previous month's 39%. The BOJ will keep monetary policy steady and nudge up its economic growth forecast at a two-day rate review ending on Tuesday. Analysts polled expect core consumer inflation, which includes oil products but not fresh foods, to hit 0.6% in the current fiscal year ending in March and 0.5% the following year. They also expect Japan's economy to have shrunk an annualised 3.6% in the October-December quarter. Japan's economy will likely expand 0.5% in the fiscal year beginning in April and 0.8% the following year, thanks in part to an expected boost from the government's $122 billion fiscal stimulus package.”

EUR/USD is looking weak, having registered its biggest single-day decline in over two weeks on Friday. The pair fell 0.43%, its biggest single-day los

EUR/USD logged its biggest single-day loss in two weeks on Friday. The pair risks extending losses to key trendline support. With US markets closed, the pair may witness some moves on German PPI data. EUR/USD is looking weak, having registered its biggest single-day decline in over two weeks on Friday.  The pair fell 0.43%, its biggest single-day loss since Jan. 2, signaling an end of the minor bounce from the Jan. 10 low of 1.1085 and a resumption of the sell-off from the Dec. 31 high of 1.1239.  The single currency, therefore, risks falling to the support at 1.1063 – the support of the trendline connecting lows seen on Oct, 1 and Nov. 29.  The drop to key support, however, may not happen if the German Producer Price Index (PPI), due at 07:00 GMT, betters estimates.  Indeed, the PPI has rarely moved markets in the past. However, with the US closed on account of Martin Luther King's birthday, trading volumes are likely to be weak. The pair, therefore, could witness erratic moves on PPI figures.  The German Bundesbank's monthly report is also scheduled for release on Monday and could influence the pair. At press time, EUR/USD is trading near 1.1095. EUR/USD under 1.11 is a clear buying opportunity - ScotiabankTechnical levels  

USD/IDR stays above the medium-term trend line supports while trading around 13,650 ahead of the European session on Monday.

USD/IDR struggles to decline below multi-month-old support lines.Monthly top, 200-day SMA will restrict upside beyond the short-term moving average.USD/IDR stays above the medium-term trend line supports while trading around 13,650 ahead of the European session on Monday. The pair has been struggling to extend its downpour below multi-month-old support-lines since December 13 wherein oversold conditions of RSI favor a pullback before further declines. With this, a 10-day SMA level near 13,740 can please buyers during the recovery. However, the pair’s additional upside will be challenged by December 31 low near 13,835 and 14,000 round-figure. Should prices manage to remain strong beyond 14,000, monthly top surrounding 14,025 and 200-day SMA level of 14,143 will be the key to watch. In a case prices manage to register a daily closing below 13,630, mid-February 2018 low surrounding 13,500 cold lure the bears. USD/IDR daily chart Trend: Pullback expected  

Elliot Clarke, Analyst at Westpac expresses his take on the Chinese economic prospects, in light of the US-China phase one trade deal reached last wee

Elliot Clarke, Analyst at Westpac expresses his take on the Chinese economic prospects, in light of the US-China phase one trade deal reached last week. Key Quotes: “The past 12 months has been a particularly challenging period for China. This is not only due to tensions with the US, but also because of broad-based weakness in investment. With the bulk of tariffs between the US and China to remain indefinitely, and as China’s domestic cost base progressively makes the nation uncompetitive for simple manufacturing, future growth for China rests on an expansion into new products and markets.”

USD/CHF's sell-off seems to have run out of steam, technical charts indicate. The pair jumped 0.30% on Friday, confirming a bullish divergence of the

USD/CHF's daily RSI has diverged in favor of the bulls. A bullish reversal needs a break above the January 10 high. USD/CHF's sell-off seems to have run out of steam, technical charts indicate.  The pair jumped 0.30% on Friday, confirming a bullish divergence of the 14-day relative strength index.  A bullish divergence occurs when an indicator charts higher lows, contradicting lower lows on price and is considered an indication of ebbing bearish momentum.  Further, Friday's gain validated the seller exhaustion signaled by the preceding day's long-tailed candle.  A bullish reversal, however, would be confirmed, if and when the pair manages to rise above the January 10 high of 0.9762.  The case for a rise to 0.9762 would strengthen once the pair violates the 10-day moving average hurdle at 0.9691. At press time, USD/CHF is trading at 0.9678.  A failure to hold above the hourly chart support at 0.9642 would shift risk in favor of a drop to 0.9613.  Daily chartTrend: Bearish Technical levels  

Rini Sen and Sanjay Mathur from the Australia and New Zealand Banking Group (ANZ) cite the latest pick-up in consumption and activity indicators from

Rini Sen and Sanjay Mathur from the Australia and New Zealand Banking Group (ANZ) cite the latest pick-up in consumption and activity indicators from India to anticipate a constrained recovery. The duo also expects a rate cut by the Reserve Bank of India (RBI) but cites the government’s fiscal limitations as the barrier. Key quotes The pick-up in consumption indicators, which we highlighted last month, has now expanded to some activity indicators. While noteworthy, we do not envisage a robust recovery in the near term. Financial sector problems and excess capacity preclude a strong rebound. There is room for the RBI to deliver one more rate cut in June, but fiscal space is limited. To minimize slippage, government spending is likely to be less than budgeted, thereby becoming another headwind to growth.

Gold prices seesaw around $1,558 during early Monday. The yellow metal recently took a U-turn from multi-day-old horizontal resistance.

Gold remains below $1560/62 area since late-January 08.Four-day-old rising trend line limits immediate declines.A lack of momentum seems to trouble traders.Gold prices seesaw around $1,558 during early Monday. The yellow metal recently took a U-turn from multi-day-old horizontal resistance but is still trading inside the short-term rising triangle. Also, RSI and MACD are troubling traders while portraying no major momentum. However, multiple pullbacks from $1,560/62, coupled with broad US dollar strength, keep the odds of the bullion’s declines. With this, sellers’ will look for a clear break of $1,555 to aim for the mid-month low surrounding $1,547 and the monthly bottom near $1,543 during further declines. Alternatively, buyers could sneak in if the quote rallies successfully beyond $1,562. In doing so, 50% and 61.8% Fibonacci retracements of the declines from January 08 to January 15, at $1,573 and $1,582 respectively, will please the bulls. Gold four-hour chart Trend: Sideways  

USD/INR jumped 0.17% on Friday, confirming a sideways channel breakout on the hourly chart. The breakout indicates the sell-off from the monthly high

USD/INR's hourly chart is reporting a channel breakout. The bulls need a sustained move above the 10-day MA. USD/INR jumped 0.17% on Friday, confirming a sideways channel breakout on the hourly chart.  The breakout indicates the sell-off from the monthly high of 72.12 has ended. The pair, however, needs to close above the descending or bearish 10-day moving average (MA) to confirm a reversal higher.  Currently, the 10-day MA is located at 71.23. A failure to hold above the key hurdle would invalidate the breakout on the hourly chart and shift risk in favor of a re-test of 70.90.  A move through that support could bring additional losses toward 70.6990 (Jan. 14 low).  Hourly chart Daily chartTrend: Bearish Technical levels  

China’s highly influential daily, Global Times, carries an opinion piece on Monday, calming down the worries fanned by several media outlets over the

China’s highly influential daily, Global Times, carries an opinion piece on Monday, calming down the worries fanned by several media outlets over the impact of the US-China phase one trade deal on the European Union (EU)- China trade relationship. Key Quotes: “Many economists in the continent think the China-US agreement will impair the "multilateral trade order" and be "harmful for Europe, Such worries are completely unnecessary.  On the contrary, the pact between the two largest economies will favor European countries in the long run, because it indicates that China is opening its markets further. China has always persisted in opening over the past decades. With this new trade deal, China's pace will accelerate and its interaction with the world will increase. Europe can undoubtedly become the beneficiary of a broader Chinese market. After all, further opening-up means more of China's market can be accessed by foreign companies, including European companies, instead of just American companies.”  

The Westpac analysts believe that the Libyan geopolitical tensions will remain the main driver for the energy markets in the week ahead. Key Quotes: “

The Westpac analysts believe that the Libyan geopolitical tensions will remain the main driver for the energy markets in the week ahead. Key Quotes: “The main focus in energy markets this week will be the impact of force majeure being called by Libya’s state-run National Oil Corp over the weekend after renegade military Khalifa Haftar shut down the Hamada-Zawiya oil pipeline which will remove circa 800k of exports. Iraq also halted production at the Al Adhab field as violent protests swept the country. WTI closed down for the second week running last week, falling 0.9% while Brent fell 0.2% on the week.”

Bank of Canada (BOC) will keep its overnight rate unchanged at 1.75% on Dec. 22 and maintain its cautiously optimistic tone, according to analysts at

Bank of Canada (BOC) will keep its overnight rate unchanged at 1.75% on Dec. 22 and maintain its cautiously optimistic tone, according to analysts at TD Securities.  Key quotes BOC will acknowledge softer household spending but are likely to argue that population growth and wages will support solid spending growth going forward while easing trade tensions will support business investment and exports. We expect the central bank’s forecast for growth in 2020 and 2021 to be unchanged at 1.7% and 1.8% respectively, with upside risk to the 2021 growth forecast. The forward-looking component of the communique may drop its emphasis on trade conflicts, but data dependency will be the motivating decision behind all rate decisions, and we expect the Bank will continue to single out household spending as a topic of particular interest.  We remain long USDCAD ahead of the BoC meeting, reflecting in part a pullback of the local growth story. The current weakness seems priced in and yet any further
softening would reinforce a push towards 1.33. We also still like the upside in AUDCAD. The USD/CAD pair is currently trading at 1.3068 and has been restricted largely to 1.3105-1.3026 since Jan. 9.

Speaking at a press conference in Beijing on Monday, China’s Industry Minister Miao Wei said China faces big pressure in stabilizing industrial output

Speaking at a press conference in Beijing on Monday, China’s Industry Minister Miao Wei said China faces big pressure in stabilizing industrial output in 2020. Additional Quotes: Will aim for stable and high-quality development in industry, communication sectors in 2020 Confident to ensure steady industrial sector growth in 2020. China welcomes foreign firms to participate in its 5G development, opposes politicizing tech issues.

Analysts at Scotiabank offer their bullish view on the EUR/USD pair, citing any dip below 1.1100 as a “clear buying opportunity”. Key Quotes: “Bullish

Analysts at Scotiabank offer their bullish view on the EUR/USD pair, citing any dip below 1.1100 as a “clear buying opportunity”. Key Quotes: “Bullish on the EUR in light of recently improving economic data. ECB clearly on the sidelines with no indication that it is rolling out additional stimulus. Fair value is approximately 1.14. Real support is 1.1065 to 1.1090 range while some short-term resistance at 1.1145.”

USD/JPY is currently trading near 119.20, having found bids at 110.06 in early Asia. The bounce has confirmed a flag breakout on the 5-minute chart an

USD/JPY has bounced up from session lows, confirming a flag breakout on the 5-minute chart. The flag breakout is preceded by a falling channel breakout. USD/JPY is currently trading near 119.20, having found bids at 110.06 in early Asia.  The bounce has confirmed a flag breakout on the 5-minute chart and opened the doors for 110.34. A flag breakout is a continuation pattern, which accelerates the preceding bullish move. Prices roughly rally the length of the pole (popularly known as measured height method) following price breakout.  The flag breakout has also reinforced or strengthened the bullish move put forward by the falling channel breakout witnessed a few hours ago.  The bullish view would be invalidated if the spot finds acceptance below 110.15.  5-minute chartTrend: Bullish Technical levels  

NZD/USD takes rounds to 0.6620 during early Monday. The pair seems to recover from the intra-day low of 0.6606 but stays well below the short-term resistance.

NZD/USD stays above 61.8% Fibonacci retracement.0.6700 will gain buyers’ attention beyond the resistance line.NZD/USD takes rounds to 0.6620 during early Monday. The pair seems to recover from the intra-day low of 0.6606 but stays well below the short-term descending trend line. As a result, buyers will wait for a sustained break of the key upside barrier prior to taking entries. Even so, 50% Fibonacci retracement of the pair’s run-up from December 04 to 31, around 0.6630, can offer momentum traders ahead of pushing them towards 0.6665 trend line resistance. In a case where NZD/USD prices rally beyond 0.6665, 0.6700 will hold the keys to the pair’s further rise to the monthly high near 0.6740 and the December-end top of 0.6756. Meanwhile, pair’s declines below 61.8% Fibonacci retracement level of 0.6600 can please sellers with December 18 low of 0.6554 whereas bottoms marked on December 18 and 04, around 0.6522 and 0.6503 respectively, will lure the bears afterward. NZD/USD four hour chart Trend: Bearish  

On Sunday, the US-based rating agency, Fitch Ratings, affirmed Germany’s sovereign credit rating at AAA while maintaining a Stable outlook. Key Findin

On Sunday, the US-based rating agency, Fitch Ratings, affirmed Germany’s sovereign credit rating at AAA while maintaining a Stable outlook. Key Findings: “Germany's 'AAA' rating reflects its diversified, high value-added economy, strong institutions and track record of sound public finances. Germany's position as the primary benchmark issuer for the eurozone affords it significant financing flexibility. General government debt is on a firmly downward path, forecast to have fallen just below 60% of GDP by the end of 2019, albeit still higher than the current 'AAA' median of 44%. The large structural current account surplus supports the country's net external creditor position. Germany's highly open, export-oriented economy is suffering from weakness in external demand as illustrated by the contraction in manufacturing. The contribution of net exports to GDP growth was -0.4pp in both 2018 and 2019 and is forecast to remain negative in 2020 and 2021. Despite the economic weakness, the budget surplus remained above 1% of GDP in 2019 following a record surplus of 1.9% of GDP in 2018. The fiscal performance benefited from robust tax revenues, generated by strong domestic demand, and the resilient labor market in particular. The budget balance has been in surplus since 2014, and compares favorably with the current 'AAA' median of a 0.2% deficit.” EUR/USD Price Analysis: Prints longest weekly losing run since July

EUR/JPY has met the top of the downside channel and sellers will be looking to add to the overall downtrend, trading with the trend, encouraged by the

EUR/JPY is in the hands of the bears and is at risk of a test back to a 50% mean reversion point.Bulls will look to buy dips in a constructive bullish channel.EUR/JPY has met the top of the downside channel and sellers will be looking to add to the overall downtrend, trading with the trend, encouraged by the bearish spinning top candle formation with price submerged below the 50-month moving average.  The daily chart is showing that bars are in control with bearish price action and candlestick formations. However, should the bulls hold either the 23.6%, 38.2% or 50% Fibo retracements of the latest rally, bulls may step in at a discount to target the next wave up chasing higher highs and lows towards the channel resistance.  EUR/JPY monthly chart Downside channel, price in close proximity to channel resistance. The spinning top below 50-month MA. EUR/JPY daily chart The latest price action on daily chart is bearish. A series of bearish pin bars followed by a bearish engulfing candlestick.  EUR/JPY daily chart Bearish engulfing meets 23.6% Fibo support. Bears can target a 50% man reversion of the latest rally. Bulls can look to buy at discount to chase next higher.  Failure of 50% fib retracement opens risk to 61.8% confluence support structure and 200-DMA lower down.  Channel support last stop until 138% Fibo extension target, 119.00/20 confluence area  

AUD/JPY is reporting marginal gains at press time, despite tensions in the Middle East, although the upside is being capped by the descending 5-day mo

AUD/JPY is reporting gains amid tensions in the Middle East. The 5-day moving average (MA) is capping the upside. China kept one-year and five-year loan prime rates unchanged. AUD/JPY is reporting marginal gains at press time, despite tensions in the Middle East, although the upside is being capped by the descending 5-day moving average (MA) at 75.85.  Iraq temporarily halted production on Sunday amid widespread unrest. Meanwhile, Libya's National Oil Corp. declared force majeure after Commander Khalifa Haftar blocked exports at ports under his control, according to Bloomberg.  As a result, oil prices gapped higher in Asia. Even so, the anti-risk Japanese yen failed to draw bids, allowing the AUD/JPY cross to rise from 75.63 to the 5-day MA hurdle at 75.85.  The pair eked out gains, possibly on expectations for peace to prevail in Libya. Following the Commander's Haftar's powerplay, global leaders met in Berlin and agreed that no external forces will be entertained and major powers are "fully committed" to a peaceful resolution in Libya. China keeps rates unchanged The People’s Bank of China (PBOC) was out on the wires a few minutes before press time, informing markets about its decision to keep the one-year loan prime rate (LPR) unchanged at 4.15% this month, contradicting expectations for a cut to 4.10%.  Meanwhile, the central bank also left the five-year LPR unchanged at 4.80% in January.   So far, however, the rate decision has not had any impact on the Aussie pairs.  Technical levels AUD/JPY is looking heavy, having faced rejection above 76.00 for the fourth straight day on Friday. 
 

USD/CNH declines to 6.8630, after marking a low of 6.8592, as China’s central bank left key lending rates unchanged on early Monday.

USD/CNH registers three-day losing streak.PBOC keeps the rate easy, pumped marked recently.Optimism surrounding the phase-two deal talks likely to fade.USD/CNH declines to 6.8630, after marking a low of 6.8592, as China’s central bank left key lending rates unchanged on early Monday. The People’s Bank of China (PBOC) announced no changes to its loan prime rates (LPR) with the one-year and five-year LPR being 4.15% and 4.80% respectively. Weekend news from the PBOC suggest that the Chinese central bank pumped 200 billion yuan into the financial system in an attempt to maintain liquidity in the banking system before the Spring Festival. Read: PBOC keeps one-year loan prime rate steady at 4.15% Following the signing up of a phase-one trade deal with the US, the Asian giant should ideally progress towards the next rounds of talks. However, headlines from the Global Times (GT) suggest that the dragon nation needs some time to consider the impact of a trade deal before moving forward. On the contrary, the US President Donald Trump earlier said, “We will vigorously enforce its terms. Hopefully, we won't have to.” The market’s risk tone remains mostly sluggish with the S&P 500 taking rounds to 3,327 following disturbing headlines from the Middle East. The US markets are off today and hence a little momentum is expected. However, any trade/political announcement is likely to be ignored and might have a wild reaction due to the lack of liquidity. Technical Analysis July 2019 low near 6.8230 remains on the bears’ radar unless prices cross seven-week-old falling trend line, near 6.9310 now.  

The Global Times reports that "with the signing of the phase-one trade deal between China and the US, the 22-month-long tariff escalation is tapering

The Global Times reports that "with the signing of the phase-one trade deal between China and the US, the 22-month-long tariff escalation is tapering off, which will be a moderate boon to the world economy in 2020. However, seriously disrupted global supply lines are unlikely be repaired anytime soon." Lead paragraph Bilateral trade between the world's two largest economies will nonetheless remain at single-digit growth in the new year, as the deal leaves in place punitive tariffs on about $480 billion goods from China and the US, which will stymie business investment and revival of confidence in all major economies.  Key notes from the article For the US, the manufacturing sector will continue to struggle in the confusion created by the Trump administration's tariffs. Though China's pledge to purchase more than $70 billion worth of goods and services in the agricultural, energy, and manufacturing areas in 2020 will help the US economy a little, most of the costs relating to the tariffs on Chinese imports will be borne by Americans, in the form of lower profits for US companies or higher retail prices for households. The intelligence of American politicians in stubbornly refusing to abolish tariffs seems greatly in doubt. The remaining duties will not only suppress US business confidence and the country's manufacturing industry, but also function as a sword of Damocles hanging over Wall Street. Investors are spooked by the tariffs and will not want to take a chance. China will certainly need time - at least a couple of years - to see how the phase one agreement works out, particularly the trade pact's ramifications in respect of local economic performance. If the economy is adversely impacted, China's government is highly unlikely to jump into so-called phase two negotiations with the US.  The Chinese people welcome the ceasefire and resumption of dialogue to the alternative - a further escalation in trade and economic hostilities. Washington must not count on phase two talks pressurizing China to change its basic economic structure. Last summer, talks between the two countries were in deadlock because Washington was asking for things that China could never agree to, that is the remaking of China's entire economic system.  Will the phase one trade deal lead to a stable and permanent economic and political relationship between the two economic giants? It's too early to tell. So long the US does not consider China as an antagonist, and the two countries try to build trust as equal negotiating partners, with respect for each other's basic systems, there will be plenty of space to cooperate in many domains to the benefit of the world.  FX implications This is not positive at all for risk appetite, Wall Street or AUD/JPY. Many pessimists had warned that after an initial risk on knee jerk reaction tot he signing of the trade deal, the hard facts and lack of progress between the two nations will likely lead to a sell the fact scenario – perhaps the media is now front running such a move in market sentiment. much more of these headlines, we can expect corrections in risk-FX, such as a stronger yen.

The Bank of Japan (BOJ) on Tuesday will maintain its current measures, including guiding long-term interest rates to around zero, keeping short-term i

The Bank of Japan (BOJ) on Tuesday will maintain its current measures, including guiding long-term interest rates to around zero, keeping short-term interest rates to minus 0.1%, and increasing the central bank's holdings of Japanese government debt by 80 trillion yen a year, all 42 economists surveyed by Bloomberg forecasted.  The central bank is also expected to raise its economic growth forecast for the first time in a year and keep its inflation forecasts unchanged for the first time in two years.  Moreover, growth is widely expected to pick up, courtesy of a $120 billion stimulus package unveiled last month by Prime Minister Shinzo Abe. Bloomberg's economists Yuki Masujima said: “The Bank of Japan will probably keep policy unchanged. There’s little reason for any shift. Fiscal stimulus should cushion a slowdown, the output gap is positive (if smaller), the yen is weaker, and the U.S. and China have inked a trade deal. But with inflation stagnant and far from the 2% target, the BOJ has to keep going.” The BOJ is expected to release its policy statement and its economic forecasts on Tuesday. 

China PBoC Interest Rate Decision: 4.15%

The People’s Bank of China (PBOC) announced on Monday that it kept the one-year loan prime rate (LPR) unchanged at 4.15% this month. Meanwhile, the fi

The People’s Bank of China (PBOC) announced on Monday that it kept the one-year loan prime rate (LPR) unchanged at 4.15% this month. Meanwhile, the five-year LPR was also left unchanged at 4.80% in January.  The decision was on the expected lines. About PBOC Rate decision The PBoC Interest Rate Decision is announced by the People´s Bank of China. If the PBoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CNY. Likewise, if the PBoC has a dovish view on the Chinese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.

AUD/USD bounces off 0.6873 to the intra-day high of 0.6884 by the press time early Monday.

AUD/USD recovers after two days of declines.Monthly bottom, 23.6% Fibonacci retracement offer additional barriers to the momentum.AUD/USD bounces off 0.6873 to the intra-day high of 0.6884 by the press time early Monday. The pair is close to the short-term support confluence comprising 50-day SMA and an upward sloping trend line stretched from November 29. While 0.6870 seems to be the tough nut to crack for sellers, a downtick below the same, as suggested by the bearish MACD, might not refrain from declining below the monthly low of 0.6848. In doing so, 61.8% Fibonacci retracement of October-December upside, at 0.6810, will entertain sellers ahead of 0.6800 round-figure. Alternatively, a 21-day SMA level of 0.6926 and 23.6% Fibonacci retracement near 0.6955 can please buyers during the pair’s further recovery. However, 0.7000 and the monthly high near 0.7040/45 can keep the bulls challenged afterward. AUD/USD daily chart Trend: Pullback expected 

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8664 versus Friday's fix at 6.8878.

The People's Bank of China (PBOC) has set the Yuan reference rate at 6.8664 versus Friday's fix at 6.8878.

USD/CAD trades near the intra-day high close to 1.3070 during the Asian session on Monday.

USD/CAD holds onto recovery gains from Thursday.The week-start rise by WTI seems to fade, the US dollar remains broadly stronger.BOC will be the key event this week.USD/CAD trades near the intra-day high close to 1.3070 during the Asian session on Monday. The pair recovers since Thursday amid increasing calls of no policy change from the Bank of Canada (BOC) as well as following upbeat data from the US. The pair fails to respect to oil’s week-start gap-up, taking clues from Libya and Iraq, as questions surrounding the BOC’s next move remain unanswered amid a lack of fresh catalysts and broad US dollar strength. In addition to the most positive data from the US, which indicates a re-think on the US Federal Reserve’s (Fed) “wait and watch” mood, the Trump administration’s ability to strike the key trade deals with global superpowers also support the US dollar (USD) strength. That said, market’s risk tone also remains subdued with the S&P 500 Futures taking rounds to 3,327. Analysts at ING cite Canadian GDP, Retail Sales and housing numbers to question strong pay gains. The same helps them to hold outlook for stable policy at the 22 January Bank of Canada policy meeting, but it leaves the possibility of action open for subsequent meetings.” On the contrary, Reuters says that 27 of 39 economists surveyed by Reuters expect the BOC to keep its overnight rate unchanged at 1.75% through 2020 and the first half of 2021. While Monday’s off in the US and a lack of major data/events elsewhere can keep the momentum restricted, any severe trade/political headlines will be enough to entertain traders ahead of Wednesday’s BOC and Canadian CPI data. Technical Analysis A sustained break of 21-day SMA, at 1.3054 now, propels the quote towards the monthly resistance line, at 1.3100, whereas 1.3030 and 1.3000 can question sellers past-1.3054.  

West Texas Intermediate (WTI) is currently trading at least 20 cents below the 200-hour moving average (MA) at $59.28, having hit a session high of $5

WTI has failed to hold above the 200-hour moving average. Prices may drop to $58.77, filling the gap on the hourly chart. West Texas Intermediate (WTI) is currently trading at least 20 cents below the 200-hour moving average (MA) at $59.28, having hit a session high of $59.61 an hour ago.  The failure to hold above the key average will likely allow a drop to Friday's close of $58.77.  That would fill the gap created by today's higher open at $59.32. The black gold gapped higher in Asia as major OPEC producers Iraq and Libya halted production on Sunday on rising tension in the Middle East.  If the support at $58.77 holds, the bullish cross of the 50- and 100-hour averages would gain credence and a bounce to $60 could be seen.  On the flip side, a move through $58.77 support will likely expose the higher low of $58.25 created on Friday. A violation there would mark an end of the corrective bounce from the Jan. 15 low of $57.35.  Hourly chartTrend: Bearish Technical levels  

AUD/NZD is currently trading at 1.0399 having travelled between a low of 1.0386 and 1.0403. The markets have been waiting patiently for good old fashi

AUD/NZD consolidates around a pivotal point on the charts, testing below 1.04 the figure. RBNZ and RBA sentiment will be the key driver from this point.AUD/NZD is currently trading at 1.0399 having travelled between a low of 1.0386 and 1.0403. The markets have been waiting patiently for good old fashioned economic and central bank fundamentals to back to the fore, and w are building up to the big events in the Reserve Bank of New Zealand and the Reserve Bank of Australia policy meetings.  The NZD has had the upper hand since the 1.0850s back in November, with bears accumulating over 5% tot he downside until YTD lows down at 1.0314. The cross has since corrected back to test 1.0450 but has struggled to maintain conviction, recently losing its footing with a score below the 1.04 handle again.  We have both the RBNZ and RBA meetings on the radar, with the RBA meeting on 4th Feb and the RBNZ 12th Feb. Market pricing for RBNZ and RBA have been little changed this year with markets pricing in a 50% chance of easing at the Feb RBA meeting, and a terminal rate of 0.44% (RBA cash rate currently at 0.75%)while for the RBNZ, the market implies only a 10% chance of easing in February, with a terminal rate of 0.87% (RBNZ OCR currently at 1.0%) – and there lies the fuel for the downside in the cross.  The sizable downside potential for AUD/NZD Casting minds back, Contrary to analyst and market expectations, the RBNZ left the OCR unchanged at 1.0% in November, despite significantly lowering the near-term growth outlook. This was ahead of the Gross Domestic Product release in December which was always going to be a major focus. The New Zealand economy expanded 0.7% QoQ in Q3, a touch stronger than both our and market expectations of 0.5%. However, Q2 growth was revised down markedly from 0.5% QoQ to just 0.1%. With leading indicators looking a bit brighter, growth may continue to bob around 2% into early 2020, but will this be enough to keep the RBNZ on hold throughout the year? This is where regional stories will take centre stage this week: The big data release will come in inflation for 4Q19 "which is going to be pivotal due to its quarterly frequency and because it may well signal a tick-up in the headline rate towards the Reserve Bank of New Zealand's 2% target mid-point," as stressed by analysts at ING bank. "The consensus is centred around an increase to 1.8% (from 1.5% in 3Q) and we see room for an even stronger reading. This should cement market expectations for the RBNZ to stay put for the foreseeable future and convince investors that the central bank will retain its neutral stance despite a possible dovish steer from its counterpart in Australia." In light of this, we continue to see sizable downside potential for AUD/NZD, not only on the back of policy divergence, but also as the bushfire emergency raises the risk of a higher growth differential leaning in favour of New Zealand. We will also have the critical Aussie jobs data this week: Following the ~40k rise in headline employment in Nov, we are anticipating some giveback in Dec, with headline rising a milder +12k, which is line with the market. However we do expect the unemployment rate to edge higher to 5.3% in Dec. Job vacancies data suggests employment growth is likely to slow over coming months, keeping open the debate on RBA easing, – analysts at TD Securities explaind.  Key events for week ahead 21 Jan: BOJ Decision. 21-24 Jan: World Economic Forum in Davos. 22 Jan: Bank of Canada Rate Decision, Canada CPI Inflation (Dec), Bank of Canada Rate Decision. 23 Jan: ECB Decision, Australia Employment (Dec). 24 Jan: New Zealand CPI (Q4), UK and EU January Flash PMIs, Manufacturing PMI, Services PMI. AUD/NZD levels    

EUR/USD fell 0.30% last week, having registered moderate losses in the preceding two weeks. The single currency’s three-week losing run is the longest

EUR/USD looks south after registering three-week losing streak. The pair risks falling to key rising trendline support near 1.1060. EUR/USD fell 0.30% last week, having registered moderate losses in the preceding two weeks.  The single currency’s three-week losing run is the longest trend of weekly declines since July.  Bears may challenge uptrend line The long upper shadows attached to the previous three weekly candles is telling a tale of growing bearish momentum – more so, as all candles ended in the red.  Further, the failed bearish channel breakout on the daily chart may be indicative of reversal lower.  The pair, therefore, appears on track to challenge the support at 1.1063 – the support of the trendline connecting lows seen on Oct, 1 and Nov. 29.  The outlook would turn bullish if the trendline support holds ground, fueling a price bounce to levels above the bearish lower of 1.1173 created on Jan. 16. At press time, EUR/USD is mildly bid near 1.1098.  Weekly chartTrend: Bearish Technical levels  

GBP/JPY trades modestly changed to 143.35 during Monday’s Asian session. That said, the pair holds its break of the short-term ascending triangle form

GBP/JPY stays below the support line of the nearly three-week-old ascending triangle.23.6% Fibonacci retracement of the pair’s declines between December 13 and January 05 is in the spotlight.An upside break of 144.52/55 could favor the bulls.GBP/JPY trades modestly changed to 143.35 during Monday’s Asian session. That said, the pair holds its break of the short-term ascending triangle formation, which in-turn signals further declines. In doing so, 23.6% Fibonacci retracement, around 142.50 will be the key to watch as the immediate support. Should sellers keep the reins past-142.50, 141.00 and the monthly bottom near 140.80 will offer intermediate halts to the pair’s drop towards 140.00 round-figure. If at all prices bounce back beyond the formation support, at 143.45 now, buyers will need to justify their strength by cross 144.35/55 area including 50% Fibonacci retracement and highs marked since late-December 17. Following the quote’s sustained run-up above 144.55, 61.8% Fibonacci retracement near 145.25 will return to the chart. GBP/JPY four hour chart Trend: Bearish  

Gold prices stay mostly downbeat while taking rounds to $1,557.20, following an uptick to $1,559, during the early hours of Monday’s trading.

Gold prices fail to cross the seven-day-old upside barrier.The market seems to pay a little attention to the headlines from Libya and Iraq.Broad US dollar strength, likely resolution to the latest geopolitical problems, US-China trade deal play against the risk-off.Gold prices stay mostly downbeat while taking rounds to $1,557.20, following an uptick to $1,559, during the early hours of Monday’s trading. The yellow metal fails to respond to the power play in Libya and protests in Iraq amid the broad US dollar strength. Also exerting downside pressure on the quote are hopes that the global leaders will be able to tackle the Middle East’s problems while cheering the trade optimism surrounding the US. Most of the Libyan oil exports, around 8,00,000 barrels per day, are on hold as the commander Khalifa Haftar took ports under his control. Iraq is also undergoing a tough time where the protestors have forced the Al Adhab field to stop the oil output. However, traders seem to ignore the news as the US 10-year treasury yields and S&P 500 Futures are both positive around 1.85% and 3,327 respectively. The US dollar (USD) remains on the front foot against the majority of counterparts as the recent data from the world’s largest economy limit further rate cuts from the US Federal Reserve (Fed). Also supporting the greenback could be the Trump administration’s ability to strike the key trade deals with China, Mexico and Canada. On the contrary, trials on US President Donald Trump’s impeachment will begin from Tuesday and could challenge the market’s risk tone. Also, the latest comment from the Republican leader indicates hardships for the US-China phase-two deal as it says, “we will vigorously enforce its terms. Hopefully, we won't have to.” Looking forward, markets in the US are off during the day, due to Martin Luther King’s Birthday, whereas fewer catalysts are available from the rest of the world. As a result, the yellow metal may keep the latest momentum in place except for any fierce trade/political headlines. Technical Analysis While an upside break of $1,562 can trigger the yellow metal’s fresh recovery towards January 07 top surrounding $1,573, a downside break below September month high of $1,535.43 could fetch the quote to $1,520.  

United Kingdom Rightmove House Price Index (YoY) rose from previous 0.8% to 2.7% in January

United Kingdom Rightmove House Price Index (MoM) climbed from previous -0.9% to 2.3% in January

NZD/USD fails to defy the earlier weakness while trading around 0.6610 during the Monday morning in Asia.

NZD/USD remains under pressure following broad US dollar strength.Holidays in Wellington and the US limit the pair’s performance.Headlines concerning Libya and US-China trade deal could offer intermediate moves.NZD/USD fails to defy the earlier weakness while trading around 0.6610 during the Monday morning in Asia. The pair bears the burden of broad US dollar strength and a lack of fresh impetus. The US dollar managed to register broad gains on Friday as the latest data from the world’s largest economy suggest a re-think of the US Federal Reserve’s (Fed) “wait and watch” mode. Also supporting the greenback’s move our overall optimism surrounding the US economy based on the Trump administration’s ability to strike the key trade deals with China, Canada and Mexico. Also supporting the Kiwi pair’s declines could be expectations of further monetary easing from the Reserve Bank of New Zealand (RBNZ). The central bank, even if not expected to announce aggressive monetary policy easing, will lag the fire-power as the Fed. Furthermore, China’s central, the People’s Bank of China (PBOC), repeatedly undertakes measures to infuse the domestic economy but has a few successes so far. This could weigh on the commodity-linked currencies, like the New Zealand dollar (NZD), as China is the world’s largest commodity user. The risk tone remains upbeat despite the geopolitical crisis in Libya and Iraq that propelled the oil prices. New Zealand has a regional holiday in Wellington whereas markets in the US are off due to Martin Luther King’s Birthday. As a result, no major surprises are expected to roll-on and the greenback can keep its gains. Though, a resolution to the Libyan crisis and/or trade-positive news from either the US or China, concerning the phase-two deal, can help the pair witness a pullback. Technical Analysis The pair’s repeated failures to cross 21-day SMA, at 0.6654 now, grind it lower towards 0.6600 round-figure whereas last week's low near 0.6585 and 50-day SMA around 0.6555 can question the bears afterward.  

GBP/USD opened with a gap to the downside of a handful of pips, but significantly, cable broke below the 1.30 handle for the first time since January'

GBP/USD breaks below 1.30 the figure as Brexit fears resurface. GBP/USD pressured with odds of BoE rate cut on the rise. GBP/USD opened with a gap to the downside of a handful of pips, but significantly, cable broke below the 1.30 handle for the first time since January's bullish correction from 1.2954.  At the time of writing, GBP is trading at 1.30 the figure, having travelled between 1.3005 and 1.2989 the opening low – cable is under pressure on a number of fronts.  BoE at the fore Brexit has been the main catalyst resulting in years of economic stress for the UK. In recent weeks, the focus on the Bank of England has started to rub salt in the wound as well. Data of late has been disappointing and Friday's poor retail sales report was the final nail in the coffin for the analysts at TD Securities BoE call:"We now look for a rate cut this month, plus a follow-up cut in May," the analysts proclaimed. "The economy seemed to be heading into 2020 on a much weaker footing than we had anticipated. We are skeptical that sentiment will pick up sufficiently in order to boost investment and growth to begin the year." Should the BoE cut rates, a further 25bps rate cut in May will bring Bank rate back down to its all-time low of 0.25%.  "That said we don't think that the economic situation warrants another QE programme just yet. A likely lowering of potential supply growth in this month's MPR means that not as much stimulus will be required to get GDP growth back up to potential," the analysts at TD Securities concluded.  At the same time, GBP positioning in the near-term probably reflects market expectations of a rate cut at the next BoE meeting and pressures will likely remain until the end of the month when the BoE will deliver the verdict.  The week ahead Meanwhile, Brexit headlines will likely start to filter through thick and fast as we approach the end of the month whereby, assuming the European Parliament also gives the green light, the UK will formally leave the EU on 31 January with a withdrawal deal. We have already heard from Finance Minister,  Sajid Javid, in headlines today who declared that there will be no alignment with EU rules – more on that here.UK Tory, Sajid Javid, has admitted businesses will be hit by Brexit – ReutersElsewhere, we have plenty of events and data on the docket from central banks to UK Manufacturing PMI, Services PMI as follows: 21 Jan: BOJ Decision. 21-24 Jan: World Economic Forum in Davos. 22 Jan: Bank of Canada Rate Decision, Canada CPI Inflation (Dec), Bank of Canada Rate Decision. 23 Jan: ECB Decision, Australia Employment (Dec). 24 Jan: New Zealand CPI (Q4), UK and EU January Flash PMIs, Manufacturing PMI, Services PMI. GBP/USD levelsGBP/USD Forecast: Headed toward 1.2900 

WTI begins the week’s trading with a leap from Friday’s close of $58.60 to $59.25. The black gold portrays the oil traders’ upbeat sentiment backed by

WTI holds on to recovery gains, backed by a week-start gap-up.Libyan oil exports are stopped, the Berlin conference favors no external meddling.Receding odds of the US-Iran war, the US off might trigger the pullback.WTI begins the week’s trading with a leap from Friday’s close of $58.60 to $59.25. The black gold portrays the oil traders’ upbeat sentiment backed by the geopolitical crisis in Libya. However, the recent headlines from Germany and off at the US, coupled with no tension between the US and Iran, may question the bulls. Bulls cheer geopolitical crisis… The oil-rich nation is regaining the global attention for the first time after 2011’s overthrow of Col. Muammar el-Qaddafi. During the recent incidence, renegade military commander Khalifa Haftar blocked the Hamada-Zawiya oil pipeline, capable of removing 8,00,000 barrels per day of exports. Following the power play, global leaders met in Berlin and agreed that no external forces will be entertained and major powers are "fully committed" to a peaceful resolution in Libya. Read: Pompeo sees progress towards ceasefire in Libya at Berlin summit - Reuters Also favoring the oil prices is news from Iraq where violent protesters put a full-stop on the oil production of the Al Adhab field. It should also be noted that the recent oil inventory numbers from the US have been upbeat while the Baker Hughes US Oil Rig Count registered a surprise increase to 673 from 659 prior. While expected peace in Libya and sustained US dollar strength could cap the price gains, an increase in protests at Iraq might keep the bulls happy. However, a lack of liquidity could be witnessed as the US bourses will be closed due to Martin Luther King’s Birthday. Technical Analysis 21-day SMA level near $60.40 and December 31 low around $60.70 can keep near-term upside restricted while mid-month low near $57.40 could restrict the declines.  

AUD/JPY declines to 75.70 during the initial Asian session on Monday. That said, the pair has been weaker since taking a U-turn from 76.25 on late-Thursday.

AUD/JPY extends losses amid bearish MACD signals.Buyers will look for entry beyond the three-week-old falling trend line.AUD/JPY declines to 75.70 during the initial Asian session on Monday. That said, the pair has been weaker since taking a U-turn from 76.25 on late-Thursday. The sellers also cheer bearish signals from the 12-bar MACD indicator. As a result, 61.8% Fibonacci retracement of the pair’s declines from December 27 to January 08, at 75.50, gains the bears’ immediate attention. However, 200-bar SMA and highs marked on January 03 and 07 could restrict pair’s further downside around 75.27/25. If at all AUD/JPY prices keep trading southwards past-75.25, 75.00 and 23.6% Fibonacci retracement near 74.40 will be in the spotlight. On the upside, a downward sloping trend line since December 27, near 76.25 now, will keep the pair’ under pressure, a break of which could fresh monthly high to 76.55. AUD/JPY four hour chart Trend: Pullback expected  

USD/JPY seesaws near 110.00 during the early Monday morning in Asia. The Pair initially reacted to the risk-off moves, due to weekend news from Libyan

USD/JPY seems to lack ammunition as traders look for clear direction amid mixed plays.Oil export blockage in Libya, the US dollar’s broad strength keep traders worried.Japanese Industrial Production in focus, for now, trade/political news to keep the driver’s seat.The US markets are off due to Martin Luther King’s Birthday.USD/JPY seesaws near 110.00 during the early Monday morning in Asia. The pair initially reacted to the risk-off moves, due to weekend news from Libyan, by declining to 110.05 from Friday’s close near 110.15. Though, follow-on bounces fail to portray the market’s risk aversion that generally weighs on the pair.Libya renews risk aversion…There’s no dearth of power show in the Middle East and this time it’s Libya that cast traders’ minds back to 2011. The oil-rich nation is undergoing a power play where one of the top leaders, Khalifa Haftar recently blocked the country’s exports by 800,000 barrels per day. Libya recently unseated Iran while the alarming geopolitical risk to the global economy. Although Tripoli seems to have a little strength, as compared to Iran, it still poses a major risk to oil prices. It should also be noted that the beginning of US President Donald Trump's impeachment trial from Tuesday will also be the key to watch. Read: What you need to know for the open: Eyes on oil, central banks and US pres. Trump's impeachment trial The recent headlines from Berlin, where global leaders including the United Nation’s Secretary-General Antonio Guterres gathered to discuss the peace solution, signal that major powers will not interfere in the situation. This avoids the fears of the 2011 repetition when western powers took control while overthrowing Col. Muammar el-Qaddafi. Even so, none of the Libyan opponents talked to each other and keep the risk of further plays alive.BOJ minutes will be in the spotlight…The BOJ’s two-day monetary policy meeting, beginning Monday, isn’t expected to offer any surprises as nothing major happened after December meeting. With this, traders will emphasize on Friday’s BOJ minutes as the latest meeting released quarterly economic forecast and forward guidance. While soft inflation will keep BOJ to extend its easy-money policies forward, the tone of the central banker will be the key to observe in the minutes' statement. Read: BoJ Minutes Preview: Little fanfare expected, dovish bias to persist, USD/JPY at a crossroads For the day, Japan’s November month Industrial Production, expected to remain unchanged at -8.1%, will be the key amid the US markets’ off. However, developments surrounding the US-China trade talks and Libya will be the key to watch. Technical Analysis FXStreet’s Ross J Burland cites spinning top and nearness to short-term channel resistance as portraying a bearish correlation. USD/JPY has surged in recent days to meet a monthly resistance line established in October 2018 that has the confluence of the 50-month moving average, a firm resistance zone between 109.80 and 110.29. A break of the resistance would be significant and set the stage for a sustained uptrend, initially targetting the 110.50s, 111 the figure, 112.50s.   
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