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Forex News Timeline

Tuesday, January 28, 2020

As far as the coronavirus goes, the latest reports are that the number of known cases of the new virus rose by nearly 60% overnight. A shortage of tes

USD/JPY bounces back to the 109 handle, reaching a high of 109.20 from a low of 108.75. The threat of the coronavirus intensifies and spreads, US dollar marches on with upbeat data. As far as the coronavirus goes, the latest reports are that the number of known cases of the new virus rose by nearly 60% overnight. A shortage of test kits has led experts to warn that the real number may be higher. Germany, Japan and Taiwan report first coronavirus patients who didn’t visit China. However, despite the recent drop in US yields, which today have finally rallied back, with the 10-year 1.64% at the time of writing, the US benchmarks are in positive territories and its business as usual on Wall Street – a weight on the yen.  According to the People's Daily China, "The novel coronavirus outbreak may reach its peak in one week or around 10 days, and then there will be no large-scale increases, says Zhong Nanshan, a renowned Chinese respiratory expert."The Xinhua also reported this earlier, "Novel coronavirus outbreak may reach its peak in one week or about 10 days: expert."US data in focus, supporting US near-term Risk markets have steadied as confidence rose despite the worsening environment and worrying statistics, steps are being made to contain the fallout from the coronavirus. Also, the US data flow surprised on the upside. We had the US manufacturing sector in focus with poised a headline durable goods order adding 2.4% MoM in December. We also had the US consumer confidence climbing 3.4pts to 131.6 in January, "mirroring the recent wave of positive data flow for the US household sector including the lowest unemployment rate since 1969, the longest expansion on record, low inflation and close to record-high levels of job vacancies," as analysts at ANZ Bank explained.  "These real developments are combining with extremely positive wealth effects and low debt servicing costs. Household balance sheets are strong and rising so there is little reason to expect consumption – the main driver of growth – to falter any time soon." On the manufacturing market for the US is a focus and according to th analysts at ANZ,  "looking forward, however, there are tentative signs of improvement. " "The Richmond Fed manufacturing index surged 25 points to 20 in January, its highest reading since September 2018. New orders rose 26 pts to 13 and the order backlog jumped 20 points to 9. Rates of capacity utilisation also picked up sharply (14 vs -12) and employment also gained (20 vs 7). The data are consistent with other regional surveys which support a manufacturing rebound following the Phase One trade deal with China." USD/JPY levelsUSD/JPY Forecast: Further advances not clear yet

​​​​​​​Economics, supply factors and even the tensions in the middle east have been cast aside. The markets are taking the threat of a spread in the c

WTI correcting six consecutive days of supply. A bounce on Wall Street supporting WTI prices, +1.08% on the session. Energy markets are particularly vulnerable to the coronavirus spread.​​​​​​​Economics, supply factors and even the tensions in the middle east have been cast aside. The markets are taking the threat of a spread in the coronavirus as very real and imminent and that is weighing on global growth prospects and demand for the price of oil. West Texas Intermediate crude (WTI) hit a three month low yesterday on fears of global contagion in both panic and the virus itself.  However, bulls stepped to the plate on Tuesday following a Reuters report that was citing OPEC sources, that the Organization of the Petroleum Exporting Countries wants to extend their current oil-output cuts until at least June. There was also the possibility of floated by OPEC of stepping in with deeper cuts if oil demand dried up due to the coronavirus.  Coronavirus spreading Meanwhile, the latest reports are that the number of known cases of the new virus rose by nearly 60% overnight. A shortage of test kits has led experts to warn that the real number may be higher. Germany, Japan and Taiwan report first coronavirus patients who didn’t visit China.  At the same time, analysts at TD Securities explained that "an abundance of supply and lackluster product demand which has been most clearly observed in the aftermath of the US-Iranian tensions and Libyan Crisis which failed to make their mark despite nearly 1m bpd of supply lost." "As speculators price-in a double-whammy from fears of weakening demand and oversupply, CTA funds are adding downside pressure as a large-scale selling program takes place across WTI, and RBOB gasoline, with more moderate selling in Brent." WTI levels  

In the CBO’s latest projections of the outlook under current law, it is cited that there will be deficits remaining in large by historical standards:

In the CBO’s latest projections of the outlook under current law, it is cited that there will be deficits remaining in large by historical standards: The federal debt grows to 98 percent of GDP by 2030, and the economy expands at an average annual rate of 1.7 percent from 2021 to 2030. The Congressional Budget Office regularly publishes reports that present projections of what federal deficits, debt, revenues, and spending—and the economic path underlying them—would be for the current year and for the following 10 years and beyond if existing laws governing taxes and spending generally remained unchanged. This report is the latest in that series—and it shows a cumulative 10-year deficit that is slightly larger and a cumulative 30-year deficit that is notably larger than those in CBO’s previous projections. At a glanceThe Budget. In CBO’s projections, the federal budget deficit is $1.0 trillion in 2020 and averages $1.3 trillion between 2021 and 2030. Projected deficits rise from 4.6 percent of gross domestic product (GDP) in 2020 to 5.4 percent in 2030. Other than a six-year period during and immediately after World War II, the deficit over the past century has not exceeded 4.0 percent for more than five consecutive years. And during the past 50 years, deficits have averaged 1.5 percent of GDP when the economy was relatively strong (as it is now). Because of the large deficits, federal debt held by the public is projected to grow, from 81 percent of GDP in 2020 to 98 percent in 2030 (its highest percentage since 1946). By 2050, debt would be 180 percent of GDP—far higher than it has ever beenn.The Economy. In 2020, inflation-adjusted GDP is projected to grow by 2.2 percent, largely because of continued strength in consumer spending and a rebound in business fixed investment. Output is projected to be higher than the economy’s maximum sustainable output this year to a greater degree than it has been in recent years, leading to higher inflation and interest rates after a period in which both were low, on average. Continued strength in the demand for labor keeps the unemployment rate low and drives employment and wages higher. After 2020, economic growth is projected to slow. From 2021 to 2030, output is projected to grow at an average annual rate of 1.7 percent, roughly the same rate as potential growth. That average growth rate of output is less than its long-term historical average, primarily because the labor force is expected to grow more slowly than it has in the past. Over that same period, the interest rate on 10-year Treasury notes is projected to rise gradually, reaching 3.1 percent in 2030.Changes Since CBO’s Previous Projections. CBO’s estimate of the deficit for 2020 is now $8 billion more—and its projection of the cumulative deficit over the 2020–2029 period, $160 billion more—than the agency projected in August 2019. That 10-year increase is the net result of changes that go in opposite directions. Lower projected interest rates and higher estimates of wages, salaries, and proprietors’ income reduced projected deficits, but a combination of recent legislation and other changes increased them. Relative to the projections in CBO’s long-term budget outlook, last published in June 2019, debt held by the public as a percentage of GDP in 2049 is now projected to be 30 percentage points higher. That increase is largely the result of legislation enacted since June—which decreased revenues and increased discretionary outlays—and of lower projected GDP.Full reportMarket Implications The Federal Reserve is likely to be on hold this year, if not turning somewhat dovish, and the global markets are fearful of a rise of inflation which is a toxic mix for the Fed. The bond markets are oversubscribed and the US dollar could be subject to a rocky road ahead considering he US twin deficits and the implications of the US bond market's bubble bursting. 

Gold prices continued to move lower during the American session and reached a fresh daily low at $1566/oz. It retreated further after it climbed yeste

XAU/USD extends retreat from two-week highs. DXY off highs consolidates gains above 98.00 ahead of FOMC statement. Gold prices continued to move lower during the American session and reached a fresh daily low at $1566/oz. It retreated further after it climbed yesterday to $1588, the highest level since January 8.  Wall Street shines, gold falls  XAU/USD filled the weekly opening gap, falling below Friday’s close. The improvement in market sentiment, a stronger US dollar and higher US yields pushed gold further lower.  Data from the US released on Tuesday came in mixed. The Federal Open Market Committee started its two-day meeting. On Wednesday, the central bank will announce its decision and Chairman Powell will hold a press conference. No change in rates is expected. US President Trump criticised the Fed’s policy again.      Technical outlook  The retreat and failure of XAU/USD again above $1580 could point to more losses in the short-term, particularly if it holds under $1572, the 20 simple moving average in four hours chart. The next strong support area is seen near $1560 (uptrend line and key SMA in the 4-hour chart).  A recovery to $1573 would alleviate the bearish pressure from gold but as long as it fails to consolidate above $1580, gains will remain limited.   

USD/CHF is defying gravity in a series of consecutive daily gains within its rally from the lows of 31st Dec and this is in spite of the lowest levels

USD/CHF is moving higher towards a prior resistance in a solid correction of the Dec 2019 downtrend. The US dollar has taken up a safe haven bid due to the threat of the coronavirus. DXY marches on to test 98 the figure and is technically positioned for further advances. USD/CHF is defying gravity in a series of consecutive daily gains within its rally from the lows of 31st Dec and this is in spite of the lowest levels in the ten-year treasury yield since 9th October of last year. The story here is that of risk-off. Markets are fearful of the extent to which the coronavirus could spread and the contagion threat in global financial markets. The number of known cases of the new virus rose by nearly 60% overnight and die to a shortage of test kits has led experts to warn that the real number may be higher. Germany, Japan and Taiwan report first coronavirus patients who didn’t visit China.  However, and surprisingly,  US benchmarks are in positive territories, although the divergence between rates and stocks will likely be a weight on the benchmarks, potentially supporting the likes of the CHF and yen on any significant downside correction. The US dollar is serving its role as the world's commodity and safe-haven currency and the far factor is reflected in the US bond market, pricing out the prospects of rising inflation for this year and considering a dovish tone at the Federal Reserve meeting this week. Nonetheless, the geopolitical and global health threat leaves the dollar as the base case best-of-a-bad-lot trade.  FOMC outlook Analysts at TD Securities argued that the funds rate will almost certainly be left unchanged and that FOMC statement tweaks are likely to be minor. "Policy will likely still be described as "appropriate" but with officials also still in "monitor[ing]" mode, consistent with an easing bias. Separate implementation note likely to include 5bp rise in the IOER, with the change downplayed as technical." USD/CHF levels        

USD/CAD is trading below the highs of the day at 1.3179 having travelled between a high of 1.3205 and a low of 1.3171. Technically, 'funds' (USD/CAD)

Bulls relish in a dovish BoC outlook, threats of coronavirus, BoC and GDP in focus. USD/CAD runs stops through the 1.3160s, bulls set on a test of the declining trend line resistance.A confluence of the 1.3230/50s, trendline resistance and 78.6% Fibo of the Dec swing highs to YTD lows is the target. USD/CAD is trading below the highs of the day at 1.3179 having travelled between a high of 1.3205 and a low of 1.3171. Technically, 'funds' (USD/CAD) seems overstretched although there is a firm case for a continuation to trendline resistance so long as 1.3150/60 holds (eventual target to the downside (monitoring Canadian Gross Domestic Produce)). USD/CAD has been extending its rally, taking out stops through prior resistance levels despite an environment where buy-side institutions have been increasing their net CAD longs. The move was instigated in an environment of a dominant US dollar as well with a dovish one from the Bank of Canada.  Asset managers are hedging their long exposure to commodity-FX However, the fuel on the fire set align by the BoC has been more to do with the concerns over the spreading coronavirus which has weighed on risk assets and provided a tailwind to safe havens, such as the USD and JPY. What is interesting about last week's COT data is that the markets are becoming more cautious about the reflation trade and the commodity market's outlook. We can see that Asset managers were overall sellers of commodity currencies. They cut their net CAD longs byUSD0.3bn to USD3.4bn, raised their net AUD shorts by USD0.4bn to USD1.4bn, while keeping their net long NZD position broadly unchanged at USD0.1bn. Asset managers are hedging their exposure to their buy-side long positions. Hence, the Loonie might face further downside pressure in the near term, especially as the threat of the coronavirus intensifies.   The threat of the coronavirus intensifies and spreads to Canada The latest reports are that the number of known cases of the new virus rose by nearly 60% overnight. A shortage of test kits has led experts to warn that the real number may be higher. Germany, Japan and Taiwan report first coronavirus patients who didn’t visit China. There has also been a run on surgical face masks in the panic-struck USA. However, in the session, US benchmarks are in positive territories so its business as usual on Wall Street, for now.  Closer to home,  health officials in Toronto on Monday confirmed a second presumptive case of the new coronavirus. Today, Quebec’s health ministry investigating 3 potential new coronavirus cases. BoC in focus, GDP next up and Dep Gov speech to be scrutinised for clues Meanwhile, should the threat of coronavirus subside, it will be back to good old fashioned economics again following a BoC caught markets off guard with a dovish tone at the January meeting. What got traders on edge was the deliberation put to rate cuts, but there should be some relief in the consensus that cuts are not warranted at this time.  This week's Gross Domestic Product will be critical for the loonie where a large surprise, one way or the other, will be marketing moving. It will follow recent data in a positive surprise in retail sales and a slightly below consensus Consumer Price Index, with both headline and core measure continuing to sit above 2%. However, Core CPI remains slightly above target at 2.1% on average, although further deterioration in the labour market or GDP tracking will test the BoC'sresolve.
"We look for a flat print on GDP due to weakness across goods and services," analysts at TD Securities explained. "Transitory factors will have offsetting impacts, reflecting a rebound in auto production and a headwind from cold weather and the CN strikes. A sharp pullback in wholesale trade is also expected to weigh on growth. Unchanged GDP would leave Q4 tracking near the BoC's latest projections (0.3%)." Also, we have the Deputy Governor Beaudry speaking on monetary policy and financial vulnerabilities at 15:30 ET on Thursday, January 30th. "Markets will look for any clarity on how the Bank views the trade-off between supporting the economy and managing financial stability risks," analysts at  Securities noted, explaining that while "the Bank cited financial vulnerabilities as a factor that held them back from providing insurance cuts in October, recent communications suggest less of a trade-off after a deterioration in domestic economic data." USD/CAD levels USD/CAD has run through stop territories in the 1.3160s and offers little signs of an imminent pullback, with bulls set on a test of the declining trend line resistance at 1.3230/50s which has a confluence of the 78.6% Fibo of the Dec swing highs to YTD lows. The immediate support to target is 1.3150. A run below there opens risk back to 1.3070/80 support structure.    

In a turn away from monetary policy, significant fiscal stimulus measures prompted the Bank of Japan (BoJ) to upgrade its economic outlook, and as suc

In a turn away from monetary policy, significant fiscal stimulus measures prompted the Bank of Japan (BoJ) to upgrade its economic outlook, and as such, supports a strengthening yen over the coming year, explained analysts at CIBC. They forecast USD/JPY at 104 by Q2 and at 101 by the fourth quarter.  Key Quotes:  “USD/JPY remains an important risk proxy for markets, and the extension higher reflects the market’s affinity towards risk assets so far this year. Despite some tensions in the Middle East in early January, equities continue to climb, with US indices reaching all-time highs. Additionally, rates are extending their sell off from late August lows, while curves continue to steepen.” “In the near-term, the move higher in the 10-year JGB yield is disconcerting, considering how swift it has been. Historically, moves of that type are generally followed by an equally swift drawdown in equities, which should also lead to tactical downside in USD/JPY. Over the long-term, we remain constructive on risk, but factor rotation suggests that a supportive endogenous backdrop in Japan - infrastructure spending from the government should offset the drag from the sales tax over time - will work to keep USD/JPY anchored.”

Increased optimism about current and expected conditions supported a better than expected print for the consumer confidence index in January, noted an

Increased optimism about current and expected conditions supported a better than expected print for the consumer confidence index in January, noted analysts at Wells Fargo. They consider consumer spending should remain a key driver of growth this year.  Key Quotes:  “Consumer confidence rose 3.4 points in January to 131.6. This is the highest level since August, when the Trump administration announced consumer tariffs would go into effect in September and raised existing tariffs.” “Prospects of the de-escalation in the trade war therefore likely buoyed optimism in January.” “The present situation index ticked up 4.8 points to 175.3, supported by a strong labor market. The labor differential, or the difference between those who view jobs as plentiful versus hard to get, rose to its second highest level of the expansion. This indicates optimism around job prospects and will likely support spending.”
 

The AUD/USD pair edged lower on Tuesday and touched its weakest level since mid-October at 0.6737 before staging a technical rebound in the second hal

NAB data shows Business Confidence continues to deteriorate in Australia.US Dollar Index advances above 98 on Tuesday.Coming up: Consumer Price Index (CPI) data from Australia.The AUD/USD pair edged lower on Tuesday and touched its weakest level since mid-October at 0.6737 before staging a technical rebound in the second half of the day. As of writing, the pair was consolidating its daily losses near 0.6750, erasing 0.15% on a daily basis. Eyes on RBA's inflation report Earlier in the day, the National Australia Bank's monthly survey revealed that the Business Confidence Index in December dropped to -2 from 0 in November and the Business Conditions Index eased to 3 from 4 in the same period to hurt the AUD. Moreover, concerns over the coronavirus having a significant negative impact on the Chinese economy put additional weight on China-proxy AUD's shoulders.  In the early trading hours of the Asian session on Wednesday, the Australian Burau of Statistics will release its Consumer Price Index data for the fourth quarter. More importantly, the Reserve Bank of Australia (RBA) will publish its quarterly inflation report as well Markets expect the RBA's Trimmed Mean CPI to come in at 1.5% on a yearly basis and a lower-than-expected reading could hurt the AUD as it would suggest that the RBA could remain dovish without worrying about inflation shooting over their target range. On the other hand, the greenback continued to find demand as a safer-alternative against most major currencies and the US Dollar Index looks to close the day above the 98 handle for the first time since early December. The data from the US showed that Durable Goods Orders rose 2.4% in December following November 3.1% drop but Core Durable Goods Orders, non-defense capital goods excluding aircraft, declined 0.9%. Technical levels to watch for  

United States 7-Year Note Auction down to 1.57% from previous 1.835%

After closing the first day of the week virtually unchanged near 1.3060, the GBP/USD lost its traction and dropped to its lowest level in a week at 1.

Retail sector in UK remained stagnant in January. US Dollar Index extends rally, looks to close above 98.FOMC and BoE meetings are expected to ramp up volatility.After closing the first day of the week virtually unchanged near 1.3060, the GBP/USD lost its traction and dropped to its lowest level in a week at 1.2975. As of writing, the pair was down 0.48% on a daily basis at 1.2990. Earlier in the day, the monthly data published by the Confederation of British Industry (CBI) revealed that retail sales volumes in the UK stayed unchanged for the third straight time in January. Assessing the survey's finding, "2020 looks set to be another tough year for the sector as growth in households’ disposable income is set to remain modest and retailers continue to battle longer-term issues such as digital disruption and the cumulative burden of policy costs," said Anna Leach, CBI Deputy Chief Economist. Markets unsure about BoE's next policy action Following this data, investors are still unsure if the Bank of England (BoE) will opt out for a cut in its base rate this Thursday. Previewing the BoE event, "for the last year we've seen weak survey data, but the hard data strong enough to keep the BoE on hold," noted TD Securities analysts. "With that pattern having flipped, and hard data weakening but surveys pointing to optimism, the BoE cannot credibly say that now the survey data is sending the correct signal. The call is very close though, near 50-50." On the other hand, the USD continues to find demand as a safer alternative ahead of the FOMC's policy announcements on Wednesday. After the US Census Bureau on Tuesday showed that Durable Goods Orders in December rose 2.4% to beat the market expectation of 0.5%, the US Dollar Index preserved its daily gains and now remains on track to close above the 98 mark for the first time since early December. Technical levels to watch for  

Analysts at CIBC forecast the AUD/USD pair will trade at 0.72 during the second quarter and at 0.76 during the fourth. With the Reserve Bank of Austra

Analysts at CIBC forecast the AUD/USD pair will trade at 0.72 during the second quarter and at 0.76 during the fourth. With the Reserve Bank of Australia prepared to ease, upside for the Australian dollar appears limited in the near-term, despite completion of the Phase One trade deal, they explained.  Key Quotes:  “The RBA is committed to keeping rates low for as long as necessary to generate household spending. Part and parcel of their thesis is that wages have bottomed out, and should start rising over the medium-term. However, economic activity remains subdued, which should keep inflation risks at bay. As a result, the market continues to price in another rate cut by mid-year.” “The effects of the bushfires also means that the domestic economy likely contracted in Q4, as a result of disruptions to ports and retail spending. That should also work against the AUD in the near-term, even as the macro backdrop improves, with the US-China Phase One agreement.”

Data released on Tuesday, showed Durable Goods Orders rose 2.4% in December, above the 0.5% increase expected, however, the report contained negative

Data released on Tuesday, showed Durable Goods Orders rose 2.4% in December, above the 0.5% increase expected, however, the report contained negative numbers and revisions. Ex-aircraft, capital goods orders declined 0.9% and signal business spending is set to remain weak in the coming quarters, argued analysts at Wells Fargo.  Key Quotes:  “Total orders increased 2.4%, well above the consensus expectation for a 0.4% gain, but a number of factors take the shine off the increase. For starters, last month’s 2.1% decline was revised down to an even worse 3.1% fall. Moreover, the beat came entirely from defense orders, with private business spending continuing to flounder.” “For a second straight month, defense orders roiled the headline, this time leaping more than 90%. That more than reversed last month’s plunge and drove orders to the second highest level this cycle. Defense shipments, on the other hand, fell for a second straight month (down 2.5% in December) and suggest that the surge in orders will not be in time to fend off a slowdown in government spending in Q4’s GDP report, to be released on Thursday.” “Excluding the defense sector, orders fell 2.5% and have not notched a gain since July.” “Outside of aircraft, private capital goods orders also remained weak. Core capital goods orders fell 0.9% in December, while November is now reported to have barely notched a gain (up only 0.1%).” “Business spending is far from collapsing, however, and today’s report offers additional evidence that equipment outlays are at least beginning to steady.”

The USD/JPY pair rose further during the American session amid an improvement in market sentiment. It printed a fresh daily high at 109.19. The pair p

US dollar strengthens after US data, ahead of the FOMC statement. Yen falls across the board on risk appetite and higher US yields. The USD/JPY pair rose further during the American session amid an improvement in market sentiment. It printed a fresh daily high at 109.19. The pair partially closed the weekly opening gap and as of writing, stands at 109.15, up 25 pips for the day.  Earlier today it fell to test the weekly lows around 108.70/75 but managed to remain on top and then recover ground on the back of a stronger US Dollar. The DXY rose further above 98.00 to 98.10, the highest level since December 2.  Wall Street is posting significant gains, recovering after Monday’s slide. The Dow Jones gains 0.80% and the Nasdaq 1.30%. Higher equity prices and also US yields weigh on the yen. The US 10-year yield rose from 1.57% to 1.64%.  Developments around the coronavirus continue to dominate market sentiment. Today investors appear less pessimist about the impact on the global economy, helping equity prices recover.  Trump tweets about the Fed, FOMC meeting starts  The two-day meeting of the FOMC began today. On Wednesday, the central bank will announce its decision. No change in rates is expected. A few minutes ago, US President Donald Trump tweeted commenting on Fed’s policy:  “The Fed should get smart &  lower the Rate to make our interest competitive with other Countries which pay much lower even though we are, by far, the high standard. We would then focus on paying off & refinancing debt! There is almost no inflation-this is the time (2 years late)!” His message had no impact on USD/JPY that is holding to gains. If the pair consolidates above 109.10, the short-term bias will favor the upside, while a break lower, could send it back to the previous range between 109.10 and 108.75.  More Levels   

United States 52-Week Bill Auction down to 1.49% from previous 1.55%

EUR/JPY is consolidating the recent drop near the 120.00 figure while trading below the main simple moving averages (SMAs).

EUR/JPY is under selling pressure while trading off the 2020 lows near the 120.00 level. The level to beat for bears is the 119.90 support.    EUR/JPY daily chart   EUR/JPY is consolidating the recent drop near the 120.00 figure while trading below the main simple moving averages (SMAs).      EUR/JPY four-hour chart   The market remains under selling pressure despite the possibility of a correction. Bears would be looking to pierce the 119.90 support to reach the 119.65 and 119.40 levels, according to the Technical Confluences Indicator. Resistances are seen near 120.40, 120.82 and 121.15 levels.    Additional key level  

US President Trump is on tweeter, ahead of the US Federal Reserve monthly meeting: “The Fed should get smart & lower the Rate to make our interest com

US President Trump is on tweeter, ahead of the US Federal Reserve monthly meeting:“The Fed should get smart &  lower the Rate to make our interest competitive with other Countries which pay much lower even though we are, by far, the high standard. We would then focus on paying off & refinancing debt! There is almost no inflation-this is the time (2 years late)!”The US Central Bank is largely anticipated to maintain the status quo this time, despite announcing in December that the monetary policy will remain “highly accommodative.”  

The euro is trading in a weak bear trend below its main simple moving averages (SMAs) as the market broke below an ascending trendline three days ago. The spot

EUR/USD stays under selling pressure while challenging the 1.1000 figure.As bears gain momentum they could reach 1.0958 price level.    EUR/USD daily chart    The euro is trading in a weak bear trend below its main simple moving averages (SMAs) as the market broke below an ascending trendline three days ago. The spot formed a head-and-shoulders formation which is driving the market towards its lowest point since November.   EUR/USD four-hour chart   EUR/USD is trading in a bear channel below its main SMAs as the market is grinding lower. The spot is challenging the 1.1000 figure; a beak of this psychological level could lead to further downside towards the 1.0958 levels, according to the Technical Confluences Indicator.     Additional key levels   

Consumer confidence in the US improved in January with the Conference Board's Consumer Confidence Index rising to 131.6 from 128.2 in December (revise

CB Consumer Confidence Index rises to 131.6 January.US Dollar Index looks to close above 98 for first time since early December. Consumer confidence in the US improved in January with the Conference Board's Consumer Confidence Index rising to 131.6 from 128.2 in December (revised from 126.5). Further details of the publication showed that the Present Situation Index rose to 175.3 from 170.5.  Commenting on the data, “consumer confidence increased in January, following a moderate advance in December, driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects," said Lynn Franco, Director of Economic Indicators at The Conference Board. USD reaction The US Dollar Index ticked higher on the upbeat data and was last up 0.2% on the day at 98.13.

The greenback, when tracked by the US Dollar Index (DXY), keeps the bid tone unchanged in the 98.00 neighbourhood so far in the first half of the week

DXY stays bid at/above the 98.00 mark.US 10-year yields remain steady above 1.60%.US data releases surprised to the upside.The greenback, when tracked by the US Dollar Index (DXY), keeps the bid tone unchanged in the 98.00 neighbourhood so far in the first half of the week. US Dollar Index bolstered by data, looks to FOMC The march north of the dollar remains far from abated, as the index managed to clinch fresh yearly highs beyond the 98.00 mark, always on the back of the prevailing risk aversion in response to unabated jitters over the spread of the Wuhan virus and the potential impact on prospects of global growth. In the US calendar, the always relevant Consumer Confidence gauged by the Conference Board surprised to the upside in January, advancing to 131.6. Additional data saw house prices measured by the S&P-Case-Shiller Index rising at an annualized 2.6% in November and Durable Goods Orders expanding 2.4% inter-month in December, leaving behind November’s 3.1% contraction. All prints came in above estimates, supporting further the sentiment around the buck. What to look for around USD DXY extended the recent breakout of the key 200-day SMA to the 98.00 mark, recording at the same time fresh yearly tops. In the meantime, headlines from the Chinese coronavirus remain in centre stage and are expected to keep dictating the price action in the global markets for the time being. On another scenario, the index keeps the positive view above the 200-day SMA, always supported by the current ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’. Later in the week, the FOMC event (Wednesday) and key US data releases should keep the dollar under the microscope. US Dollar Index relevant levels At the moment, the index is up 0.16% at 98.10 and a break above 98.13 (2020 high Jan.28) would aim for 98.54 (monthly high Nov.29 2019) and finally 98.93 (high Aug.1 2019). On the downside, immediate contention is seen at 97.71 (200-day SMA) seconded by 97.54 (55-day SMA) and then 97.09 (weekly low Jan.16).

United States Richmond Fed Manufacturing Index above expectations (9) in January: Actual (20)

XAU/USD is trading in an bull trend above its main daily simple moving averages (SMAs). After fading the 1600 mark earlier in January, the metal has been grind

Buyers remain in control above the 1570 price level as XAU/USD created a bull flag. Targets on the way up can be located near 1598 and 1610 price levels.    Gold daily chart   XAU/USD is trading in an bull trend above its main daily simple moving averages (SMAs). After fading the 1600 mark earlier in January, the metal has been grinding higher above the $1540 per troy ounce.    Gold four-hour chart   The market is deciding if the latest bull-run on the four-hour chart is the continuation of the main uptrend or a correction of the drop seen at the start of January. A daily close above the 1588 level would be encouraging for bulls as it could open the gates to further gains towards the 1598 and 1610 price levels. On the flip side, if the bears break the 1576 level, the metal can correct towards the 1570 and 1560 price levels.     Additional key levels  

Wall Street's main indexes started the day in the positive territory as investors seem to be bargain-shopping following Monday's sharp drop. As of wri

All 11-major S&P 500 sectors trade in positive territory on Tuesday.CBOE Volatility Index drops nearly 7% to reflect risk-on atmosphere.Wall Street's main indexes started the day in the positive territory as investors seem to be bargain-shopping following Monday's sharp drop. As of writing, the Dow Jones Industrial Average was up 0.27% on the day while the S&P 500 and the Nasdaq Composite were adding 0.35% and 0.5%, respectively. Tech shares gain traction Reflecting the upbeat market mood, the CBOE Volatility Index, Wall Street's fear gauge, is down nearly 7% on the day. Among the 11-major S&P 500 sectors, which are all in the positive territory in the early trade, the risk-sensitive Technology Index is up 0.75% to lead the winners. In the meantime, the Financials Index is adding 0.5% supported by the recovery witnessed in the 10-year US Treasury bond yield.

After hitting new lows in levels last seen in early October 2019 near $52.00, prices of the WTI have managed to regains some attention and have retake

WTI rebounds from lows near $52.00 per barrel.OPEC+ could extend output cuts on coronavirus fears.API’s report on US crude supplies next on the docket.After hitting new lows in levels last seen in early October 2019 near $52.00, prices of the WTI have managed to regains some attention and have retaken the $53.00 mark per barrel. WTI up on OPEC+ rumours, looks to China The massive sell-off in prices of the West Texas Intermediate appears to have met an important contention near the $52.60 region per barrel so far on Tuesday. So far, the barrel of WTI shed more than 20% since 2020 tops near the $66.00 mark recorded earlier in the month to Monday’s low near the $52.00 mark. Prices of the commodity reversed the downside somewhat on Tuesday in response to sources indicating the probability that the OPEC+ could extend the ongoing oil output cut agreement until June or even increase the reductions, always on the back of rising fears on the impact of the Wuhan virus on the global economy. Later in the day, the American Petroleum Institute (API) will publish its weekly report on US crude oil inventories. On Wednesday, the DoE is due to release its official report and Friday will see the report on US oil rig count by driller Baker Hughes. What to look for around WTI The outbreak of the Wuhan virus and its potential impact on Chinese/global growth have been heavily weighing on traders’ sentiment during the past couple of weeks, adding to the already rising concerns on the excess of crude oil supply in the markets. Supporting the later, and undermining any serious rebound, the IEA expects prices to remain capped during the first half of the year following a forecasted surplus of nearly a million bpd. On the supportive side for prices emerge the persistent supply disruptions in Libya, social unrest in Iraq and a fragile US-Iran scenario, all in combination with the increasing likeliness that the OPEC+ could extend further the oil output cuts. WTI significant levels At the moment the barrel of WTI is gaining 0.51% at $53.04 and faces the next resistance at $57.36 (200-day SMA) seconded by $58.59 (55-day SMA) and finally $59.73 (weekly high Jan.20). On the other hand, a breach of $52.13 (2020 low Jan.27) would aim for $51.06 (monthly low Oct.3 2019) and finally $50.47 (monthly low Aug.7 2019).

The USD/CHF pair built on its goodish intraday positive move and jumped to over two-week tops, around the 0.9730-35 region in the last hour. Following

USD/CHF regains some positive traction amid improving risk sentiment.Recovering US bond yields underpinned the USD and remained supportive.The positive momentum seemed unaffected by mixed US Durable Goods Orders.The USD/CHF pair built on its goodish intraday positive move and jumped to over two-week tops, around the 0.9730-35 region in the last hour. Following an early dip to the 0.9680 region, the pair managed to regain some positive traction and the uptick accelerated further during the early North-American session. A turnaround in the global risk sentiment weighed heavily on the Swiss franc's safe-haven status and was seen as one of the key factors driving the pair higher. The risk-on mood was further reinforced by a goodish rebound in the US Treasury bond yields, which underpinned the US dollar demand and remained supportive. The positive momentum seemed rather unaffected by mixed US Durable Goods Orders data and remained exclusive driven by the improving risk appetite. It will now be interesting to see if the pair is able to capitalize on the positive momentum or meets with some supply at higher levels. Market participants now look forward to the Conference Board's US Consumer Confidence Index in order to grab some short-term trading opportunities. Technical levels to watch  

United States Redbook Index (MoM) remains at 0% in January 24

United States Redbook Index (YoY): 5.3% (January 24)

Despite the broad-based USD strength, the NZD/USD pair erased a small portion of its daily gains after touching its lowest level in eight weeks at 0.6

US Durable Goods Orders rebounded sharply in December.US Dollar Index continues to push higher, stays above 98.Coming up: Conference Board's Consumer Confidence Index and Richmond Fed Manufacturing Index.Despite the broad-based USD strength, the NZD/USD pair erased a small portion of its daily gains after touching its lowest level in eight weeks at 0.6520 earlier in the day. As of writing, the pair was trading at 0.6532, still down 0.25% on a daily basis. Nevertheless, this modest recovery seems to be a technical correction and the pair is likely to remain vulnerable in the short-term. Focus remains on coronavirus The lack of significant macroeconomic data releases at the start of the week caused the headlines surrounding the coronavirus outbreak to continue to drive the markets. With no signs of containment of the outbreak, investors are worried about the potential negative impact on the Chinese economy. In the meantime, the data published by the US Census Bureau on Tuesday showed that Durable Goods Orders rose 2.4% in December after falling 3.1% in November. On a negative note, however, Durable Goods Orders Excluding Defense dropped 2.5% in the same period. The US Dollar Index largely ignored the mixed data and continues to float above the 98 handle ahead of the Conference Board's Consumer Confidence Index data. In the early trading hours of the Asian session on Wednesday, a significant reaction from the AUD/USD pair to the CPI data from Australia could cause the positively-correlated NZD/USD pair to move accordingly. Technical levels to watch for  

United States Redbook Index (MoM) increased to 0.1% in January 24 from previous 0%

United States Redbook Index (YoY): 5.5% (January 24) vs 5.3%

Since the start of January, the market has been dropping sharply.

The AUD/USD currency pair remains under selling pressure near two-month lows. Bear targets can be located near 0.6725 and 0.6676 levels.     AUD/USD daily chart   Since the start of January, the market has been dropping sharply. The bias remains in favor of bears and a conclusive break below the 0.6753 support could yield further weakness towards the 0.6725 and 0.6676 levels, according to the Technical Confluences Indicator. Resistances are seen near the 0.6775, 0.6796 and 0.6834 levels.   Additional key levels   

United States S&P/Case-Shiller Home Price Indices (YoY) registered at 2.6% above expectations (2.4%) in November

The USD/CAD pair remained confined in a narrow trading band below the 1.3200 round-figure mark and moved little post-US macro data. Data released this

USD/CAD consolidated the recent gains to multi-week tops.Mixed US Durable Goods Orders failed to provide any impetus.Recovering oil prices further collaborated towards capping gains.The USD/CAD pair remained confined in a narrow trading band below the 1.3200 round-figure mark and moved little post-US macro data. Data released this Tuesday showed that US Durable Goods Orders recorded a strong 2.4% growth in December, reversing the previous month's awful decline of 2.1% and surpassing even the most optimistic estimates by a big margin. USD/CAD seemed unaffected by mixed US data The positive reading, to a larger extent, was negated by the disappointing release of core durable goods orders, which fell 0.1% as against 0.2% rise expected and eventually did little to impress the US dollar bulls or provide any impetus to the major. Meanwhile, the bid tone surrounding the USD remained unabated in the wake of a turnaround in the global risk sentiment, which allowed the US Treasury bond yields to stage a solid intraday recovery from the lowest level in more than three months. The risk-on mood also helped boost demand for perceived riskier assets, like oil, which underpinned demand for the commodity-linked currency – the loonie – and turned out to be one of the key factors keeping a lid on any strong gains. Tuesday's US economic docket also features the release of the Conference Board's Consumer Confidence Index, which might influence the USD price dynamics and produce some short-term trading opportunities. Technical levels to watch  

Durable Goods Orders in the United States rose 2.4% on a monthly basis in December following November's decline of 3.1% (revised from 2%), the data pu

Durable Goods Orders rebound in December following November's drop.US Dollar Index clings to daily gains above 98 after data.Durable Goods Orders in the United States rose 2.4% on a monthly basis in December following November's decline of 3.1% (revised from 2%), the data published by the US Census Bureau showed on Tuesday. This reading came in better than the market expectation for an increase of 0.5%. "Excluding transportation, new orders decreased 0.1%," the press release read. "Excluding defense, new orders decreased 2.5%. Transportation equipment, up following three consecutive monthly decreases, drove the increase, $5.9 billion or 7.6% to $82.9 billion." USD reaction The US Dollar Index, which tracks the dollar's performance against a basket of six major currencies, ignored the data and was last at 98.07, adding 0.14% on a daily basis.

United States Durable Goods Orders ex Transportation came in at -0.1% below forecasts (0.2%) in December

United States Durable Goods Orders came in at 2.4%, above forecasts (0.5%) in December

United States Durable Goods Orders ex Defense below expectations (0.5%) in December: Actual (-2.5%)

The breakout from the triangle formation looks like it is failing below the 1.3100 figure. The spot broke below the 50-day simple moving average (SMA) and is n

The bullish breakout from the triangle pattern is failing.The level to beat for sellers is the 1.2973 level.  GBP/USD daily chart    The breakout from the triangle formation looks like it is failing below the 1.3100 figure. The spot broke below the 50-day simple moving average (SMA) and is nearing and ascending trendline.     GBP/USD four-hour chart   The pound is challenging the session’s lows while below the main SMAs on the four-hour chart. In the last four sessions, the bears have taken the lead. The odds are tilted to the downside and GBP/USD could reach 1.2973, 1.2932 and 1.2900 figure. Resistances are seen near 1.3030, 1.3067, 1.3094 and 1.3135 levels, according to the Technical Confluences Indicator.      Additional key levels  

The USD/CHF dropped to 0.9680 area during the European trading hours but staged a rebound ahead of the American session and was last seen trading at 0

10-year US Treasury bond yield erased early losses.Wall Street's main indexes look to open decisively higher.US Dollar Index climbs to fresh multi-week highs above 98.The USD/CHF dropped to 0.9680 area during the European trading hours but staged a rebound ahead of the American session and was last seen trading at 0.9720, adding 0.26% on a daily basis. Recovering market sentiment and the broad-based USD strength seems to be helping the pair gain traction. Reports suggesting that the coronavirus outbreak could reach its peak in the next seven to ten days seem to be helping the market mood to turn positive with the 10-year US Treasury bond yield erasing its losses and rising nearly 1% at the time of writing. Furthermore, the S&P 500 futures are up nearly 0.6% to suggest that Wall Street's main indexes are likely to start the day sharply higher. US Dollar Index rises above 98 Meanwhile, the US Dollar Index is posting gains for the fourth straight day on Tuesday and is above the 98 mark for the first time since early December to help the pair preserve its bullish momentum. The Durable Goods Orders data, which is expected to show an increase of 0.5% in December following November's 2.1% drop, and the Conference Board's Consumer Confidence Index will be looked upon for fresh catalysts. Participants will be paying close attention to Wall Street's performance as well. Technical levels to watch for  

According to Piotr Matys, Senior Emerging Markets FX Strategist at Rabobank, the CEEMEA currencies remain driven by the latest news regarding China’s

According to Piotr Matys, Senior Emerging Markets FX Strategist at Rabobank, the CEEMEA currencies remain driven by the latest news regarding China’s coronavirus. Key Quotes: “In the early hours of trading we witnessed signs of stabilisation following yesterday’s sell-off in stocks (the S&P 500 Index plunged 1.57%). However, this proved short-lived as travel restrictions announced by Hong Kong instead of improving sentiment spooked the markets, which are already on edge.” “It is fair to assume, therefore, that the worst may yet to come. Any positive impact on the CEEMEA currencies of the phase one trade deal could be fully offset by rising concerns that the coronavirus will have serious negative implications not only for China, but for the global economy as well.“ “The plunge in oil prices to the lowest level so far this year provided USD/RUB with sufficient upside traction to reach the December 23 high at 63.1057. Unless fresh news from China provide concrete evidence that the virus is under control, the path of the least resistance will remain to the upside with 64.49 as the next potential target for USD/RUB.”

Russia Unemployment Rate meets forecasts (4.6%) in December

Gold finally broke down of its consolidative trading range held over the past 24-hours or so and dropped to fresh session lows, around the $1572-71 re

Gold turns lower sharply amid improving risk sentiment, pickup in the US bond yields.Sustained weakness below 50-hour SMA might have prompted some technical selling.Gold finally broke down of its consolidative trading range held over the past 24-hours or so and dropped to fresh session lows, around the $1572-71 region in the last hour, filling the weekly bullish gap. A goodish recovery in the global risk sentiment dented demand for traditional safe-haven assets, which coupled with a pickup in the US Treasury bond yields exerted pressure on the non-yielding yellow metal. Meanwhile, the latest leg of a sudden fall over the past hour or so could further be attributed to some technical selling on a sustained weakness below 50-hour SMA support near the $1576 region. Oscillators on the 1-hourly chart have been drifting lower within the negative territory and support prospects for an extension of the corrective slide from three-week tops set in the previous session. However, technical indicators on 4-hourly/daily charts have managed to hold with a bullish bias, warranting some caution for aggressive bearish traders and positioning for any deeper losses. Gold 1-hourly chart  

Tuesday's US economic docket highlights the release of durable goods orders data for December. The US Census Bureau is scheduled to release the monthl

US durable goods orders overview Tuesday's US economic docket highlights the release of durable goods orders data for December. The US Census Bureau is scheduled to release the monthly report at 13:30 GMT and consensus estimates point to a 0.5% rise during the reported month as compared to November's awful reading of -2.1%. Meanwhile, core durable goods orders, which exclude transportation items and tend to have a broader impact than the volatile headline figures, are anticipated to register a modest growth of 0.2% in December as against a 0.1% decline recorded in the previous month. On the other hand, non-defence capital goods orders (excluding aircraft and parts) - a proxy for business investment - are forecasted to rise by 0.5% as compared to November's growth of 0.7%. How could it affect EUR/USD? As FXStreet's Senior Analyst, Joseph Trevisani explains: “With all of the world’s major central bank on a sustained policy hold the relative strength of their currencies depends on economic comparison. For the US dollar the better the performance of the economy the better for the greenback.” Meanwhile, FXStreet Editor Pablo Piovano offered a brief technical outlook and important levels to trade the EUR/USD pair: “The ongoing leg lower in EUR/USD appears to have met some contention in the 1.10 neighbourhood for the time being. However, if the selling impetus regains steam, then the 1.0980 region – where is located November’s low – should return to the traders’ radar. In the broader picture, as long as the 55-day SMA - today at 1.1089 - caps the upside, the bearish stance on the spot is seen unchanged.” “Although not favoured in the short-term view, if bulls regain the upper hand, interim resistance is seen at the 100-day SMA at 1.1068. This area of resistance is reinforced by the proximity of the 3-month resistance line. Something to keep in mind: the RSI is close to the oversold territory, while the ADX at around 15, shows the current downtrend lacks (proper?) strength,” Pablo added further. Key Notes    •  US Durable Goods Orders Preview for December: Positive patience    •  EUR/USD Forecast: The 1.10 area is seen holding the downside    •   EUR/USD Price Analysis: A breach of 1.10 exposes a test of 1.0980 About US durable goods orders The Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation. The final figure shows the state of US production activity. Generally speaking, a high reading is bullish for the USD.

The USD/JPY pair staged a technical rebound during the first half of the day but failed to hold above the 109 mark as the JPY continues to find demand

10-year US Treasury bond yield erases more than 1%.US Dollar Index advances beyond 98 on Tuesday.Coming up: CB Consumer Confidence Index and Durable Good Orders data from US.The USD/JPY pair staged a technical rebound during the first half of the day but failed to hold above the 109 mark as the JPY continues to find demand as a safe-haven amid concerns over the coronavirus outbreak weighing on the Chinese economy and the global economic recovery. As of writing, the pair was trading at 108.80, erasing 0.08% on a daily basis. JPY continues to capitalize on risk-off flows According to the latest available data, the death toll from the coronavirus now stands at 106 with the number of confirmed cases rising above 4,000. Commenting on the potential impact of the outbreak on the Chinese economy, "we expect the epidemic to be particularly hard on the service sector in China, but retail sales could also suffer, which could hurt imports," said Danske Bank analysts.  Reflecting the sour market sentiment, the 10-year US Treasury bond yield, which closed the previous six trading days in the negative territory, is down more than 1% on Tuesday. On the other hand, the S&P 500 futures are up 0.2% but this situation reflects a correction following Monday's sharp fall rather than a recovering sentiment. In the meantime, the US Dollar Index is at its highest level since early December at 98.07, adding 0.13% on the day to help the pair limit its losses. Durable Goods Orders and the Conference Board's Consumer Confidence data from the US will be looked upon for fresh impetus in the second half of the day. Technical levels to watch for  

According to FX Strategists at UOB Group, USD/JPY could extend the downside to the 108.40 region in the next weeks. Key Quotes 24-hour view: “USD gapp

According to FX Strategists at UOB Group, USD/JPY could extend the downside to the 108.40 region in the next weeks. Key Quotes 24-hour view: “USD gapped lower upon opening yesterday and plummeted to a low of 108.72 before ending the day at 108.89 (-0.35%). Severely oversold conditions suggest further sustained weakness is unlikely. USD is more likely to consolidate and trade sideways, expected to be between 108.70 and 109.25.” Next 1-3 weeks: “While we indicated last Thursday (23 Jan, spot at 109.55) that the risk for USD ‘has shifted to the downside’, the manner by which it cracked 109.00 came as a surprise (USD gapped lower upon opening yesterday and dropped to 108.72). The price action suggests USD could weaken further to 108.40. At this stage, the prospect for further weakness to 108.00 is not high. Only a move above 109.50 would indicate the current weakness has stabilized.”

The offered bias remains well and sound around the shared currency, motivating EUR/USD to challenge the psychological support at 1.10 the figure. If t

EUR/USD stays offered near YTD lows in the 1.10 area.The next support of relevance is located in the 1.0980 region.The offered bias remains well and sound around the shared currency, motivating EUR/USD to challenge the psychological support at 1.10 the figure. If this key area of support is cleared, then the November’s low in the 1.0980 region should emerge as the next significant target. The offered bias in the spot should remain unchanged below the 55-day SMA, today at 1.1089. EUR/USD daily chart  

Further losses are seen in the Aussie dollar in the short-term horizon, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “The large and rap

Further losses are seen in the Aussie dollar in the short-term horizon, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “The large and rapid decline in AUD (0.6759, -0.96%) is accompanied by strong momentum. However, the decline is deep in oversold territory and while a dip below the overnight low of 0.6752 would not be surprising, the next support at 0.6725 is likely out of reach. On the upside, only a move above 0.6795 would indicate that current weakness in AUD has stabilized (minor resistance is at 0.6780). Next 1-3 weeks: “Our latest narrative for AUD was from last Wednesday (22 Jan, spot at 0.6845) wherein the ‘odds for AUD to move below 0.6820 have increased but there is another solid support at 0.6790’. After hovering a few days above 0.6820, AUD sliced through both 0.6820 and 0.6790 yesterday (27 Jan) and plunged to a low of 0.6752. The rapid improvement in momentum suggests further weakness in AUD. That said, severely oversold conditions indicate that the 2019 low at 0.6670 may not come into the picture. All in, AUD is expected to stay on the back foot unless it can reclaim the ‘strong resistance’ level at 0.6830.”

Mexico Trade Balance, $ above forecasts ($0.138B) in December: Actual ($3.068B)

Mexico Trade Balance s/a, $ above expectations ($0.21B) in December: Actual ($1.283B)

The upside momentum in the dollar remains well and sound for yet another session and is now lifting DXY to new YTD peaks beyond 98.00 the figure. Abov

The rally in DXY prints fresh yearly highs in the 98.00 neighbourhood.Immediately to the upside aligns 98.54, November’s high.The upside momentum in the dollar remains well and sound for yet another session and is now lifting DXY to new YTD peaks beyond 98.00 the figure. Above this area, the index should target the November’s peak in the mid-98.00s. In the broader picture, the outlook on the buck is seen constructive while above t he 200-day SMA, today at 97.72. DXY daily chart  

Analysts at TD Securities (TDS) offered a brief highlight of Tuesday trading action and preview of the upcoming US macro releases – durable goods and

Analysts at TD Securities (TDS) offered a brief highlight of Tuesday trading action and preview of the upcoming US macro releases – durable goods and consumer confidence data. Key quotes: “Risk sentiment has stabilized somewhat overnight, but we think this will prove temporary. Virus contagion concerns are likely to remain a FX market driver for some time to come. We think tactical positioning favors a defensive playbook.” “We forecast a 0.3% m/m decline in durable goods orders, largely explained by a retreat in the nondefense aircraft segment. The decline in the latter should offset a gain in ex-transportation orders, which we pencil in at +1.2% m/m.” “Separately, the consensus is looking for a modest improvement in the Richmond Fed's manufacturing index to -3 in Jan from -5 in Dec, which would be consistent with the gains in the regional indices published so far.” “Lastly, we anticipate a decent increase in the Conference Board's consumer confidence index, to 129.5 in Jan from 126.5 in Dec.”

FX Strategists at UOB Group expect Cable to remain sidelined in the 1.2900-1.3200 range in the near-term. Key Quotes 24-hour view: “GBP traded between

FX Strategists at UOB Group expect Cable to remain sidelined in the 1.2900-1.3200 range in the near-term. Key Quotes 24-hour view: “GBP traded between 1.3041 and 1.3104 before settling on a soft note at 1.3054 (-0.12%). The soft underlying tone suggests GBP could drift lower to 1.3025. The next support at 1.2990 is unlikely to come into the picture. Resistance is at 1.3085 followed by 1.3110.” Next 1-3 weeks: “GBP popped to a high of 1.3120 last Friday (24 Jan) before dropping back quickly. The recent sharp but short-lived price actions have resulted in a mixed outlook. From here, GBP could continue to trade in an erratic manner within a 1.2900/1.3200 range.”  

The downside in EUR/JPY has picked up extra pace after breaching the key 200-day SMA in the 120.80 region on Friday and the 100-day SMA around 120.30

EUR/JPY accelerates the sell-off below the 120.00 mark.Immediately to the downside emerges the 119.60 region.The downside in EUR/JPY has picked up extra pace after breaching the key 200-day SMA in the 120.80 region on Friday and the 100-day SMA around 120.30 on Monday. While sellers remain in control, then the area of 119.60, or late November lows, should emerge on the horizon ahead of November’s low at 119.25. Furthermore, as long as the 200-day SMA caps the upside, the selling bias in the cross is expected to remain unchanged. EUR/JPY daily chart  

China’s President Xi Jinping told the World Health Organization (WHO) Director-General that China is confident and capable of winning the battle again

China’s President Xi Jinping told the World Health Organization (WHO) Director-General that China is confident and capable of winning the battle against the coronavirus, China's state TV reported on Tuesday. "The most important task at present is virus prevention and control," Xi said and noted that he believes that the WHO and the international community will give a calm and objective assessment of the virus. Market reaction These comments don't seem to be helping the market sentiment improve. As of writing, the 10-year US Treasury bond yield was down 1.85% on the day while major European equity indexes were trading mixed.

Retail sales volumes in the UK stayed unchanged for the third straight month in January, the latest CBI Distributive Trends Survey showed on Tuesday.

Retail sales volumes in the UK stayed unchanged for the third straight month in January, the latest CBI Distributive Trends Survey showed on Tuesday. "Retail sales volumes posted no growth in the year to January (0%, unchanged from December)," the CBI noted in its press release. "Retailers expect sales volumes to remain unchanged in the year to February (0%)." Commenting on the data, "2020 looks set to be another tough year for the sector as growth in households’ disposable income is set to remain modest and retailers continue to battle longer-term issues such as digital disruption and the cumulative burden of policy costs," noted Anna Leach, CBI Deputy Chief Economist. Market reaction The GBP/USD pair edged lower on the disappointing data and was last seen trading at 1.3008, erasing 0.35% on a daily basis.

If the spread of the coronavirus continues to weigh on crude oil prices and the oil demand in China, OPEC is likely to extend the current oil output c

If the spread of the coronavirus continues to weigh on crude oil prices and the oil demand in China, OPEC is likely to extend the current oil output cut agreement at least until June, Reuters reported on Tuesday, citing three OPEC sources familiar with talks. Sources further added that an extension until the end of the year and deeper oil output cuts were other options that could be considered to battle falling prices. WTI rebounds modestly These comments helped crude oil prices recover slightly on Tuesday. As of writing, the barrel of West Texas Intermediate was trading near the $53 mark, adding 0.3% on a daily basis.

Ireland Retail Sales (YoY) climbed from previous 1.4% to 5.8% in December

Ireland Retail Sales (MoM) up to 3.6% in December from previous -3.3%

United Kingdom CBI Distributive Trades Survey - Realized (MoM) came in at 0% below forecasts (3%) in January

While risks point to further downside, EUR/USD is likely to meet a tough support around 1.0980, suggested FX Strategists at UOB Group. Key Quotes 24-h

While risks point to further downside, EUR/USD is likely to meet a tough support around 1.0980, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “While EUR dipped to a 2-month low of 1.1008, it recovered to end the day little changed at 1.1016 (-0.06%). Downward momentum is patchy at best and EUR is unlikely to weaken much further. That said, it is too early to expect a recovery. EUR is more likely to trade sideways at these lower levels, expected to be within a 1.1000/1.1050 range.” Next 1-3 weeks: “While we have held the view that EUR is in a ‘corrective pullback’ since early this month we held the view that lackluster momentum suggests EUR could ‘stabilize ahead of 1.1030’. EUR cracked 1.1030 last Thursday (23 Jan) and extended its decline to 1.1008 yesterday (27 Jan). While downward momentum has picked up, the current decline is approaching oversold territory. That said, the risk remains on the downside and only a move above the ‘strong resistance’ at 1.1085 would indicate that the current weakness has stabilized. Until then, EUR could continue to edge lower but any weakness is expected to encounter solid support near last November’s low near 1.0980. Looking ahead, if EUR were to register a daily closing below 1.0980, it could open up the way for further weakness towards 1.0945, possibly retesting 1.0875, the low in 2019.”

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, noted the outlook on the cross stays on the negative side. Key Quotes “EUR/JPY

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, noted the outlook on the cross stays on the negative side. Key Quotes “EUR/JPY last week eroded its 4 month uptrend and our outlook remains negative. The recent low at 120.17 has been eroded on a closing basis and this should be enough to refocus attention on the 119.26 mid-November low. Failure here would be considered to be negative and this will target the 115.87 September low (favoured).”

Chile Industrial Production (YoY) up to -1.8% in November from previous -3.4%

Chile Industrial Production (YoY) above expectations (-6%) in October: Actual (-3.4%)

Chile Industrial Production (YoY) down to -0.2% in September from previous 1.4%

After closing the first day of the week in the positive territory, the USD/CAD pair continued to push higher on Tuesday and rose above the 1.32 mark f

Coronavirus concerns continue to weigh on market sentiment.WTI trades at its lowest level since early October.US Dollar Index stays near 98 ahead of Durable Goods Orders data.After closing the first day of the week in the positive territory, the USD/CAD pair continued to push higher on Tuesday and rose above the 1.32 mark for the first time since early December. As of writing, the pair was up 0.07% on the day at 1.3202. Concerns over the potential negative impact of coronavirus outbreak on the Chinese economy and global trade continue to weigh on crude oil prices to make it difficult for the commodity-sensitive CAD to find demand. The barrel of West Texas Intermediate, which erased more than 7% last week, was last seen posting small recovery gains near $53. USD stays strong ahead of key macro events On the other hand, the greenback takes advantage of the risk aversion and helps the pair preserve its bullish momentum with the US Dollar Index adding 0.07% on the day at 98. In the second half of the day, Durable Goods Orders, Conference Board's Consumer Confidence Index and the Richmond Fed's Manufacturing Survey from the US will be looked upon for fresh impetus. There won't be any macroeconomic data releases from Canada on Tuesday. On Wednesday, the FOMC will announce its interest rate decision and publish the monetary policy statement, which will be followed by FOMC Chairman Jerome Powell's press conference. Technical levels to watch for  

Chile Industrial Production (YoY): 1.4% (August) vs previous 2.6%

United Kingdom 10-y Bond Auction down to 0.5% from previous 0.794%

Gold traded with a mild negative bias through the early European session on Tuesday, albeit remained well within the previous session's broader tradin

Gold edges lower amid a modest rebound in equity markets.Concerns about coronavirus continued lending some support.A subdued USD demand further helped limit the downside.Gold traded with a mild negative bias through the early European session on Tuesday, albeit remained well within the previous session's broader trading range. The precious metal failed to capitalize on the previous session's bullish gap opening and a subsequent move to three-week tops. A modest rebound in the global risk sentiment – as depicted by signs of stability in the equity markets – turned out to be one of the key factors weighing on the precious metal's perceived safe-haven status. The downside remains cushioned The market sentiment, however, remained fragile amid concerns heightened anxiety about the economic impact of the outbreak of the virus in China. This was evident from a sharp intraday turnaround in the US Treasury bond yields, which extended some support to the non-yielding yellow metal and helped limit deeper losses. Currently hovering around the $1580 region, the dollar-denominated commodity further benefitted from a subdued US dollar price action ahead of US macro releases. Tuesday's US economic docket features the release of Durable Goods Orders and the Conference Board's Consumer Confidence Index, which might produce some short-term trading opportunities. Technical levels to watch  

WTI (oil futures on NYMEX) remains on the back foot below the 53 mark, having failed the recovery attempts above the last on multiple occasions. The b

WTI bears take a breather amid OPEC supply buts extension hopes.Coronavirus crisis continues to weigh on risk, fuel growth concerns. Markets await US weekly API Crude Stock data and virus updates.WTI (oil futures on NYMEX) remains on the back foot below the 53 mark, having failed the recovery attempts above the last on multiple occasions. The bears take a breather after Monday’s 4% slump to $52.16, the lowest levels since early October. S&P Global Platts quoted a source, as saying that the OPEC is considering extending its ongoing output cuts or even deepening them to stem the excessive oil price declines due to the virus spread. The report appears to cap the downside in the prices for the time being.  Despite the pause in the week-long rout, the risk remains to the downside amid heightening concerns over the economic impact of the China coronavirus contagion, which could likely dampen the oil demand growth outlook. The US yield curve has already inverted suggesting increased odds of a US recession, in the face of the coronavirus outbreak. US 3-month/10-yr Treasury curve inverts for the first time since Oct. Further, a broadly firmer US dollar also keeps the black gold under pressure. A stronger greenback makes the USD-denominated oil expensive to the holders in foreign currencies.Markets now await the US weekly Crude Stocks data from the American Petroleum Institute (API) for near-term trading opportunities in the barrel of WTI. Meanwhile, the risk trends will continue to influence the oil price action amid incoming updates on the China virus epidemic. WTI Technical levels to consider      

In evidence of escalating concerns about the economic impact from a coronavirus outbreak in China, the US Treasury yield curve inverted on Tuesday for

In evidence of escalating concerns about the economic impact from a coronavirus outbreak in China, the US Treasury yield curve inverted on Tuesday for the first time since October 2019. The yield differential between three-month and 10-year Treasury yields narrowed to -0.015 basis points. The yield curve inversion has mostly suggested a likelihood of US economic recessions in the past. This has been reflective in the Fed fund futures, as markets now see a Federal Reserve (Fed) rate cut by September versus a rate cut seen in November previously. In response to increased odds of a Sept Fed rate cut amid the US yield curve inversion has likely dragged the US dollar lower from eight-week highs of 98.03 reached against its main competitors in the last hour. Its worth noting that the FOMC begins its two-day monetary policy review meeting later on Tuesday, with the decision likely to be announced on Wednesday at 1900 GMT.

In opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, Cable could shed further ground and visit the 1.2900 zone. Key Q

In opinion of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, Cable could shed further ground and visit the 1.2900 zone. Key Quotes “GBP/USD charted an outside day to the downside on Friday and it is possible that it will react back to its 1.2902 uptrend near term. This will need to hold for scope for a deeper recovery to the 1.3285 Fibonacci retracement to be seen.” “The market is currently underpinned by the 1.2902 uptrend and the December low at 1.2908. Failure here would put the 200 day moving average at 1.2690 back on the plate. We have no strong bias.”

Barnabas Gan, Economist at UOB Group, gives his views on the manufacturing sector in Singapore. Key Quotes “Singapore’s industrial production fell 0.7

Barnabas Gan, Economist at UOB Group, gives his views on the manufacturing sector in Singapore. Key Quotes “Singapore’s industrial production fell 0.7% y/y (+4.1% m/m sa) in December 2019. Excluding biomedical manufacturing, output fell 3.2% y/y. Manufacturing growth has also been revised to -8.9% y/y in November 2019, up from the previous estimate of -9.3%. Accounting for the latest data, manufacturing fell 2.3% in 4Q19, and averaged -1.4% in 2019.” “Clusters such as biomedical engineering and precision engineering underpinned overall growth, although laggards included general manufacturing, transport engineering and chemicals.” “The Singapore economy had indeed shown signs of stabilisation especially in the fourth quarter of 2019. Barring unforeseen escalation of global trade tensions in the year ahead, we remain cautiously optimistic that manufacturing could expand by 0.5% in 2020.”

CME Group’s flash data showed investors added around 3.6K contracts to their open interest positions on Monday. Volume, instead, reversed the previous

CME Group’s flash data showed investors added around 3.6K contracts to their open interest positions on Monday. Volume, instead, reversed the previous build and shrunk by around 37.5K contracts. GBP/USD: Scope for a move below 1.30Cable’s negative price action on Monday was accompanied by rising open interest and a decline in volume. That said, while some consolidation is probable in the short-term horizon, a drop and test of sub-1.30 levels should not be discarded for the time being.

The Bank of Japan (BOJ) Governor Kuroda said that its important for the government to take steps to maintain medium and long-term fiscal health while

The Bank of Japan (BOJ) Governor Kuroda said that its important for the government to take steps to maintain medium and long-term fiscal health while speaking in parliament this Tuesday. Key Quotes: Central bank's monetary easing steps were aimed solely at achieving its inflation target, and not at monetizing public debt. It's important for the government to take steps to maintain Japan's fiscal health.

Open interest rose for the third consecutive session at the beginning of the week, this time by nearly 6.5K contracts according to preliminary data fr

Open interest rose for the third consecutive session at the beginning of the week, this time by nearly 6.5K contracts according to preliminary data from CME Group. In the same line, volume rose by just 672 contracts, reversing the previous drop. EUR/USD looks to 1.10 and belowEUR/USD has extended the downside to the boundaries of the psychological 1.10 mark on Monday amidst rising open interest and volume, all opening the door for the continuation of the leg lower in the near-term at least.

Spain Unemployment Survey registered at 13.78%, below expectations (14%) in 4Q

Amid rapidly spreading China’s coronavirus across the borders, Japan now confirms its fifth case. However, much to everyone’s surprise the case is of

Amid rapidly spreading China’s coronavirus across the borders, Japan now confirms its fifth case. However, much to everyone’s surprise the case is of a Japanese bus driver who has not traveled to Wuhan. Separately, Hong Kong’s leader Carrie Lam announced the suspension of personal travel permits from China amid mounting coronavirus contagion risks. Key Quotes: Hong Kong to shut high-speed rail service from China. Hong Kong to close some of the travel checkpoints with China. Hong Kong to halve number of flights from China. Hong Kong to suspend all ferry services to and from China.

The NZD/USD pair edged lower through the early European session on Tuesday and dropped to seven-week lows, around the 0.6525-20 region in the last hou

NZD/USD remains under some selling pressure for the third straight session.The downfall seemed rather unaffected by recovery in the risk sentiment.The NZD/USD pair edged lower through the early European session on Tuesday and dropped to seven-week lows, around the 0.6525-20 region in the last hour. The pair added to the overnight heavy losses and remained under some selling pressure for the third consecutive session on Tuesday. Concerns about the economic impact of a deadly coronavirus in China kept exerting some pressure on the commodity-linked currencies – like the kiwi. NZD/USD struggles to find buyers Meanwhile, the ongoing downward momentum to the lowest level since December 11 seemed rather unaffected by a goodish rebound in the global risk sentiment. Bulls even shrugged off a subdued action surrounding the US dollar, which failed to benefit from a pickup in the US Treasury bond yields. The pair has now dropped closer to the very important 200-day SMA support, around the 0.6510 region, which if broken should pave the way for an extension of the recent sharp pullback from over five-month tops set on the last day of 2019. Moving ahead, market participants now look forward to the US economic docket – highlighting the release of Durable Goods Orders and the Conference Board's Consumer Confidence Index – in order to grab some short-term trading opportunities later during the early North-American session. Technical levels to watch  

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, noted the outlook on the pair is now neutral to negative. Key Quotes “EUR/USD

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, noted the outlook on the pair is now neutral to negative. Key Quotes “EUR/USD last week eroded the 3 month uptrend. The intraday Elliott wave signals remain slightly negative and this leaves attention on the downside to initially the 1.0981 29th November low. More importantly it has left our bias neutral to negative. Very near term we note the 13 counts on the intraday charts and suspect that we will see a small rebound ahead of further weakness. This should terminate around 1.1075.” “Below 1.0980 will imply a retest of 1.0879, the October low.”

According to Germany’s powerful BDI industry association, it is 'impossible' for the EU-UK trade deal by the end of the year. Key Quotes: The risk of

According to Germany’s powerful BDI industry association, it is 'impossible' for the EU-UK trade deal by the end of the year. Key Quotes: The risk of a disorderly Brexit will remain even after the UK leaves this week. No reason to sound the all-clear now since transition period only lasts up to a year. It is impossible to complete such a project by the end of the year. Urges EU27 to remain united and strong in negotiations. UK decision to rule out extension of transition period is a 'grave mistake'.

Lee Sue Ann, Economist an UOB Group, assessed the inflation figures in New Zealand during last year. Key Quotes “Consumer prices in New Zealand were u

Lee Sue Ann, Economist an UOB Group, assessed the inflation figures in New Zealand during last year. Key Quotes “Consumer prices in New Zealand were up 0.5% q/q in the final quarter of 2019. This is slightly higher than expectations for an increase of 0.4% q/q but lower than the 0.7% q/q print in the three months prior. On a yearly basis, inflation surged 1.9% y/y, also above expectations for 1.8% y/y, and much higher from the 1.5% y/y reading in the previous three months.” “Seasonal increases in transport costs, and rising household costs such as rents, rates and insurance were the main drivers. Rents rose at the fastest pace in more than a decade in 2019, amid strong demand and new rules for accommodation.” “Overall, the latest inflation numbers would add some cheer to the Reserve Bank of New Zealand (RBNZ). At 1.9%, inflation is very near the midpoint of the 1%-3% target band. The RBNZ had forecast a quarterly increase of 0.2% in its November monetary policy statement, which would have taken the annual rate to 1.6%. We expect the upside surprise will allow the RBNZ to sit tight when it releases its next monetary policy statement on 12 February.”

According to analysts at Rabobank, global stocks are in a risk-off mode amid escalating concerns about the coronavirus and the beginning of 2020 has s

According to analysts at Rabobank, global stocks are in a risk-off mode amid escalating concerns about the coronavirus and the beginning of 2020 has started to look alarmingly similar to 2018. Key Quotes: “Back then the US stocks extended their impressive 2017 gains in the first few weeks of trading only to plunge at the end of January and sustain heavy losses in the first half of February. In that period the S&P 500 Index plunged almost 12% from the peak to trough on the back of rising concerns that inflation may rise much faster than initially anticipated forcing the Fed to accelerate the pace of monetary policy tightening. It was just a taste of what was to come as 2018 proved to be a tumultuous year for the US equities which set record highs in September only to end the year deep in the red.” “Back to 2020, global stocks are in a risk off mode amid escalating concerns about the coronavirus. The S&P 500 Index plunged 1.57% on Monday trimming its year-to-date gains to just 0.40%. One could argue that this is just a correction from seriously stretched levels that will ultimately prove as an opportunity to buy stocks on the back of an assumption that the Chinese officials will, eventually, get on top of the coronavirus.” “Looking more broadly at the EM space, the pace of capital inflows into risky assets slowed down last week when concerns about the coronavirus increased. Exchange-traded funds focused on emerging markets attracted USD 311.7mn in the week ending January 14 – this was significantly lower than USD 3.16bn in the previous week. The impressive run of 16 consecutive weeks of inflows may come to an end if risk aversion continues to rise.”

Sweden Retail Sales (YoY) increased to 3.4% in December from previous 1.3%

Sweden Producer Price Index (MoM): -0.5% (December) vs previous 0.3%

Sweden Retail Sales (MoM) above expectations (-0.9%) in December: Actual (0.5%)

Sweden Producer Price Index (YoY) increased to 1.3% in December from previous 1.2%

Sweden Trade Balance (MoM): 0.3B (December) vs previous 2.9B

The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to one-week lows, around the 1.3025 region in the last hour.

GBP/USD remained depressed for the fourth consecutive session on Tuesday.BoE rate cut speculations, no-deal Brexit fears weighed on the British pound.A modest USD uptick added to the selling bias ahead of the US macro releases.The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to one-week lows, around the 1.3025 region in the last hour. The pair extended its recent pullback from the 1.3170 region and remained depressed for the fourth consecutive session on Tuesday. Despite last week's positive UK macro data, the fact that the market is still pricing in over 50% chances of a BoE rate cut on Thursday was seen as one of the key factors undermining the British pound. GBP/USD weighed down by a combination of factors This coupled with fears of a no-deal Brexit exerted some additional pressure on the sterling. It is worth mentioning that market worries were further fueled by the EU chief Brexit negotiator Michel Barnier's warning on Monday, saying that there is still the risk of a cliff-edge Brexit at the end of 2020. The pair was further pressurized by a modest US dollar uptick. As investors looked past Monday's surprise fall in the US new home sales data, a modest pickup in the US Treasury bond yields extended some support to the greenback and further contributed to the pair's weaker tone. Apart from this, possibilities of some short-term trading stops being triggered on a sustained break below 50-day SMA support, around mid-1.3000s, seemed to have prompted some technical selling and further attributed to the pair's latest leg of a downfall during the early European session. In the absence of any major market-moving economic data from the UK, the release of the US Durable Goods Orders data and the Conference Board's Consumer Confidence index might influence the USD price dynamics and produce some meaningful trading opportunities on Tuesday. Technical levels to watch  

Spain Unemployment Survey below forecasts (14%) in 4Q: Actual (13.8%)

The USD/JPY pair regained some positive traction on Tuesday, with bulls now looking to extend the momentum further beyond the 109.00 round-figure mark

USD/JPY pair regains traction amid fading safe-haven demand.A subdued USD price action might keep a lid on any strong gains.Traders now eye US economic data for some meaningful impetus.The USD/JPY pair regained some positive traction on Tuesday, with bulls now looking to extend the momentum further beyond the 109.00 round-figure mark. Despite concerns about the economic impact of a deadly coronavirus in China, a sharp turnaround in the global risk sentiment undermined the Japanese yen's safe-haven demand and helped the pair to recover further from three-week lows set in the previous session. The upside seems limited Bullish traders further took cues from a modest uptick in the US Treasury bond yields. However, though a subdued US dollar price action did little to provide any additional boost and might turn out to be the only factor keeping a lid on any strong recovery for the major. The greenback remained on the back foot in the wake of a surprise fall in new home sales, which dropped 0.4% to a seasonally adjusted annual rate of 694,000 units in December and missed consensus estimates by a big margin – pointing to rise by 1.5%. Currently hovering around the 109.10 region, session tops, traders are likely to wait for some strong follow-through buying beyond the very important 50-day SMA, around the 109.20 region, before positioning for any further near-term appreciating move. Moving ahead, Tuesday's US economic docket – highlighting the release of Durable Goods Orders and the Conference Board's Consumer Confidence Index – will now be looked upon for some short-term trading impetus later during the early North-American session. Technical levels to watch  

The Deutsche Bank Macro Strategists express their take on the US economic data released on Monday. Key Quotes: “December’s new home sales also came in

The Deutsche Bank Macro Strategists express their take on the US economic data released on Monday. Key Quotes: “December’s new home sales also came in below expectations at a seasonally-adjusted annual rate of 694k in December (vs. 730k expected), with the previous month’s figure revised down by -22k. However, the Dallas Fed manufacturing activity did rise to -0.2 in January (vs. -2.0 expected), with the new orders indicator rising to 17.6, the highest since October 2018.”

US Agriculture Sec. Perdue: Europe may secure quick trade deal with US - Politico More to come ...

After a meeting with the European Union (EU) Trade Commissioner Phil Hogan, the US Agriculture Secretary Perdue said on Tuesday that Europe may secure a quick trade deal with the US if it offers real concessions on food standard, Politico reports.

The AUD/USD pair reversed an early dip to over three-month lows and is currently placed near the top end of its daily trading range, around the 0.6760

AUD/USD remained on the defensive through the Asian session on Tuesday.A turnaround in the global risk sentiment helped ease the bearish pressure.Investors look forward to the US macro releases for some trading impetus.The AUD/USD pair reversed an early dip to over three-month lows and is currently placed near the top end of its daily trading range, around the 0.6760 region. The pair added to its recent losses and lost some additional ground through the Asian session on Tuesday. The disappointing release of National Australia Bank's (NAB) Business Confidence, which fell to its lowest level since mid-2013 in December, was seen as a key factor weighing on the Australian dollar. Aussie finds some support amid improving risk sentiment The pair dropped to the lowest level since October 16 but showed some resilience below mid-0.6700s. A strong recovery in the global risk sentiment, coupled with a subdued US dollar price action extended some support to perceived riskier currencies and helped ease the bearish pressure surrounding the aussie. However, heightened anxiety about the economic impact of a deadly new coronavirus in China might continue to undermine the China-proxy aussie. Adding to this, speculations that RBA may be forced to take aggressive easing measures might further contribute towards keeping a lid on any runaway rally for the major. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term recovery move. Market participants now look forward to the US Durable Goods Orders data and the Conference Board's Consumer Confidence index for some short-term trading impetus. Technical levels to watch  

The Australia and New Zealand Banking Group (ANZ) analysts assess the impact of the China coronavirus outbreak on the Australian debt markets. Key Quo

The Australia and New Zealand Banking Group (ANZ) analysts assess the impact of the China coronavirus outbreak on the Australian debt markets. Key Quotes: “The outbreak of a coronavirus strain in the Chinese city of Wuhan is having a growing impact on market sentiment. Bond yields have fallen sharply in the past ten days or so. 3y and 10y ACGB yields are closing in on previous historical lows. The rally in the 10y ACGB has outpaced that of the front-end, with the curve flattening. This reflects both the proximity of the RBA’s effective lower bound (ELB) and the strength of the US rally. We think it is far too early to start looking for the rebound in yields that will almost certainly follow news that the virus is contained. It seems more likely that historic lows in the 3y and 10y ACGB yields will be reached in the meantime, with the curve bull flattening.”

Switzerland Exports (MoM) declined to 17232M in December from previous 20839M

Switzerland Imports (MoM) fell from previous 16924M to 15268M in December

Switzerland Trade Balance came in at 1964M below forecasts (3337M) in December

China’s news agency, Xinhua, is out with the latest comments from the World Health Organization (WHO) Director-General, as he makes some comments on t

China’s news agency, Xinhua, is out with the latest comments from the World Health Organization (WHO) Director-General, as he makes some comments on the China coronavirus spread. Key Quotes: Approves of China government's measures to curb coronavirus spread, thanks governments for efforts. Does not advocate evacuation of foreign nationals in China to overseas. Encourages everyone to stay calm in current circumstances, no need to overreact. Confident in China's ability to control and contain the spread of the virus.

After briefly visiting the 1.10 neighbourhood – or fresh yearly lows – at the beginning of the week, EUR/USD has managed to regain some shine and adva

EUR/USD briefly dropped to the 1.10 area on Monday.Focus stays on Wuhan virus vs. impact on global growth.Key US data next of relevance later in the day.After briefly visiting the 1.10 neighbourhood – or fresh yearly lows – at the beginning of the week, EUR/USD has managed to regain some shine and advance to the 1.1020 region. EUR/USD looks to coronavirus, data The pair is up smalls to the 1.1020/30 band ahead of the opening bell in Euroland on Tuesday and is also looking to reverse three consecutive daily pullbacks amidst the generalized bearish view on the spot. In fact, the improved mood surrounding the dollar in combination with global growth concerns amidst the spread of the Chinese coronavirus have been keeping the pair under heavy pressure in past days, favouring at the same time the demand for safer assets. Nothing scheduled data wise in the Old Continent on Tuesday, whereas markets’ attention is expected to be on the US docket with the releases of Durable Goods Orders, the S&P/Case-Shiller index and January’s Consumer Confidence gauged by the Conference Board. What to look for around EUR The pair remains under pressure although off Monday’s YTD lows near the psychological 1.10 mark. Dynamics around the buck are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the Wuhan coronavirus. On another scenario, the ECB is expected to finish its strategic review (announced last Thursday) by year-end, leaving speculations of any change of the monetary policy before that time pretty flat. Further out, some better-than-expected results in the euro region as of late seem to have lent support to the idea that the bloc could have left the worst behind, although that view looks premature, to say the least. EUR/USD levels to watch At the moment, the pair is up 0.01% at 1.1019 and the next resistance is seen at 1.1068 (100-day SMA) seconded by 1.1089 (55-day SMA) and finally 1.1129 (200-day SMA). On the downside, a breakdown of 1.1009 (weekly/2020 low Jan.27) would target 1.1000 (psychological level) en route to 1.0981 (monthly low Nov.29 2019).

FX option expiries for Jan 28 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1080 1.4bn - USD/JPY: USD amounts 1

FX option expiries for Jan 28 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1080 1.4bn - USD/JPY: USD amounts  108.80 920m  109.25 434m  110.20 430m  110.40 400m - AUD/USD: AUD amounts  0.6840 645m - USD/CAD: USD amounts  1.3095 730m - EUR/GBP: EUR amounts 0.8530 750m 

Here is what you need to know on Tuesday, January 28: China’s fast-spreading coronavirus epidemic and the rising death toll ensued a slump in the Asia

Here is what you need to know on Tuesday, January 28:  China’s fast-spreading coronavirus epidemic and the rising death toll ensued a slump in the Asian equity markets, as investors remained wary about the contagion risks and its implications on the global economic growth. China’s National Health Commission (NHC) reported confirmed coronavirus cases at 4,515 and death toll at 106 while the first case of the virus was confirmed in Germany. However, a sense of calm prevailed across G10 fx space, with most majors in tight trading ranges, as the US dollar held steady near two-month highs against its main competitors. The US Treasury yields traded modestly flat while the US stock futures rebounded over 0.50%.USD/JPY held onto minor recovery gains around 109.00 while the Antipodeans renewed multi-week lows. AUD/USD breached 0.6850 after the Australian NAB Business Survey disappointed. The Kiwi hit a new seven-week low at 0.6536, tracking the weakness in the Chinese yuan. Meanwhile, the Canadian dollar was undermined by weaker oil prices, as USD/CAD tested the 1.32 handle.EUR/USD traded close to 2020 lows on 1.1000 despite the upbeat German IFO survey. GBP/USD stalled its overnight bounce and traded flat in mid-1.30s, with all eyes on the Bank of England (BOE) base rate decision and post-Brexit trade talks with the EU. Amid fragile market mood, gold prices consolidated the recent gains around $1480 while oil prices traded on the back foot, extending a week-long losings streak.Cryptocurrencies traded with moderate gains, with Bitcoin trading above $9,000 mark. US Durable Goods Orders Preview for December: Positive patience US Conference Board Consumer Confidence January Preview: Now who's happy, We're all happy  

Economist Lee Sue Ann at UOB Group reviewed the developments from the latest ECB meeting. Key Quotes “In its first monetary policy decision of the yea

Economist Lee Sue Ann at UOB Group reviewed the developments from the latest ECB meeting. Key Quotes “In its first monetary policy decision of the year, the European Central Bank (ECB) kept interest rates unchanged – the main refinancing operations, as well as interest rates on the marginal lending facility and the deposit facility at 0.00%, 0.25% and -0.50% respectively. The ECB also maintained its asset purchase programme (APP) at a monthly pace of €20 billion.” “The ECB also launched the long-awaited Monetary Strategy Review, the first one since 2003, and one of the first moves announced by ECB President Christine Lagarde upon starting her tenure. It was hardly impressive, though and the details were disappointingly thin. Aimed to be completed by December 2020, Lagarde said the ECB would reconsider the inflation target that defines its core price-stability mandate, along with the effectiveness and potential side-effects of the tools used to achieve it. The framework also set up a battle over how much central banks should do to tackle climate change by promising to examine “how other considerations, such as financial stability, employment and environmental sustainability, can be relevant in pursuing the ECB’s mandate.” “Given the continued softness in the Eurozone economy, and the exceptional extent of monetary policy measures already in place, we expect the ECB to keep its policy rates and asset purchase programme (APP) unchanged through end-2021.”

EUR/GBP trades modestly flat near 0.8442 ahead of the European session on Tuesday. The pair stays below a short-term falling trend line while clinging

EUR/GBP clings to 23.6% Fibonacci retracement of January 14-24 fall.A two-week-old descending trend line, 50% Fibonacci retracement limit near-term upside.EUR/GBP trades modestly flat near 0.8442 ahead of the European session on Tuesday. The pair stays below a short-term falling trend line while clinging to 23.6% Fibonacci retracement of its declines between January 14 and 24. Unless breaking the 0.8448 immediate resistance, the quote is less likely to avoid visiting the support line of the short-term rising triangle, at 0.8424. Should EUR/GBP prices slip below 0.8424, 0.8408 and the monthly bottom surrounding 0.8390 will gain the market’s attention. Alternatively, the pair’s successful break of 0.8448 resistance line can escalate its recovery moves to a fortnight-long descending trend line and 50% Fibonacci retracement near 0.8490/95. In a case where the bulls manage to conquer 0.8495, also dominate beyond 0.8500 round-figure, odds favoring the return of the 0.8555 and 0.8600 can’t be ruled out. EUR/GBP hourly chart Trend: Bearish  

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, is looking for direction in the vicinity of yearly highs a

DXY clinched YTD peaks at 98.00 on Monday.Chinese coronavirus remains in centre stage.Consumer Confidence, Durable Goods Orders next on tap.The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, is looking for direction in the vicinity of yearly highs around 98.00. US Dollar Index focused on data, China The index is navigating the upper end of the weekly range following Monday’s 2020 highs in the 98.00 neighbourhood. In the meantime, inflows into the safe haven universe have been gathering traction in past days as the impact on global growth from the Wuhan coronavirus continues to drag on investors’ sentiment. In fact, the demand for safer assets have dragged yields of the US 10-year note to levels last seen in October around 1.60%, inverting at the same time the 2y-10-y yield curve for the first time since December, while the 3m-10-y yield curve flattened to around 6 bps. Later in the US docket, the Conference Board’s Consumer Sentiment should grab all the attention seconded by December’s Durable Goods Orders and house prices measured by the S&P/Case-Shiller Index. What to look for around USD DXY extended the recent breakout of the key 200-day SMA to the 98.00 mark, recording at the same time fresh yearly tops. In the meantime, headlines from the Chinese coronavirus remain in centre stage and are expected to keep dictating the price action in the global markets for the time being. On another scenario, the index keeps the positive view above the 200-day SMA, always supported by the current ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’. Later in the week, the FOMC event (Wednesday) and key US data releases should keep the dollar under the microscope. US Dollar Index relevant levels At the moment, the index is losing 0.01% at 97.93 and is expected to meet the next support at 97.71 (200-day SMA) seconded by 97.54 (55-day SMA) and then 97.09 (weekly low Jan.16). On the flip side, a break above 98.00 (2020 high Jan.27) would aim for 98.54 (monthly high Nov.29 2019) and finally 98.93 (high Aug.1 2019).

Following the release of December month National Australia Bank’s (NAB) Business Condition and Business Confidence data, analysts at Westpac came out

Following the release of December month National Australia Bank’s (NAB) Business Condition and Business Confidence data, analysts at Westpac came out with their analysis of the data. Overall, the research anticipates soft forward-looking employment indicators and a likely lag in business conditions. Key quotes The business confidence index fell further, down 2pts to -2. That is the weakest reading since July 2013. As to business conditions detail for December: trading conditions fell by 1pt to +5; profitability fell by 2pts to +1; and employment conditions moved sideways, at +4. Subsequent to this survey, the outbreak of the coronavirus has emerged. This will adversely impact the Australian economy in the short-term - particularly international tourism and education - and will dent confidence. The survey suggests that employment conditions at this level are consistent with job gains averaging 18k per month near-term (down a little from the 2019 average of 22k per month). Such an outcome would - subject to a steady participation rate - hold the unemployment rate broadly unchanged. Forward orders are weak at -1, albeit that is a small improvement on the low of -4 over the months May to August (around the time of the 2019 Federal election). A rebound in response to policy stimulus has yet to materialize.

USD/CAD softens to 1.3187 during the pre-European session on Tuesday. The pair recently crossed 61.8% Fibonacci retracement of its fall from early-Dec

USD/CAD pulls back from the five-week top.A confluence of 200-bar SMA and 38.2% Fibonacci retracement offers strong intermediate support ahead of the channel’s lower line.A seven-week-old horizontal resistance restricts the pair’s upside beyond the channel’s upper line.USD/CAD softens to 1.3187 during the pre-European session on Tuesday. The pair recently crossed 61.8% Fibonacci retracement of its fall from early-December 2019 to the start of 2020. However, the upper line of the monthly ascending trend channel seems to restrict the short-term advances. With this, the quote is likely to revisit 61.8% Fibonacci retracement level of 1.3178, a break of which could drag it to 50% Fibonacci retracement and Friday’s low, around 1.3130 and 1.3115 respectively. It should, however, be noted that 200-bar SMA and 38.2% Fibonacci retracement near 1.3090/85 will limit the pair’s declines below 1.3115. Should the bears refrain from respecting 1.3085 support confluence, the channel’s support at 1.3060 will be the key as sellers can take aim at 1.3000 on the break of it. USD/CAD four-hour chart Trend: Pullback expected  

Analysts at TD Securities note that the deterioration in the German construction and services sector dragged the headline index lower this month. Key

Analysts at TD Securities note that the deterioration in the German construction and services sector dragged the headline index lower this month. Key Quotes: “German IFO data was disappointing with the headline index unexpectedly falling 0.4pts to 95.9 in January (mkt 97.0), with all the downside coming from expectations as it slipped to 92.9 (mkt 94.8). Looking at the details of IFO expectations, manufacturing did manage to gain some further ground in Jan, though is still sitting well into negative territory. The weakness came from construction (worst print since Dec 2014) and services, which gave back all of December's short-lived blip higher and is sitting around zero. While markets have generally been more upbeat on the back of the US-China trade deal, in the Eurozone the risk still exists that some of the weakness we saw in manufacturing through 2019 spills into the services sector.”

GBP/USD remains modestly flat near 1.3060 while heading into the London open on Tuesday. In doing so, the pair snaps the previous three-day declines.

GBP/USD struggles for direction amid a lack of major catalysts.China’s coronavirus, fears of hard Brexit weigh on the pair.Recently positive data indicate a hawkish statement and intermediate strength.GBP/USD remains modestly flat near 1.3060 while heading into the London open on Tuesday. In doing so, the pair snaps the previous three-day declines. While the uncertainty surrounding the post-Brexit trade deal between the European Union (EU) and the UK recently weighed on the pair, the US dollar’s broad strength amid risk-off also dragged the quote down. The present pullback could be attributed to the risk reset amid a lack of major catalysts as well as ahead of the key events like BOE and Brexit talks. Latest on the Brexit suggests that the EU’s top Brexit negotiator Michel Barnier turned down the UK Boris Johnson’s claims over no checks at the Northern Irish borders. Further, the Irish Taoiseach Leo Varadkar said that the EU will have an upper hand in Brexit talks that could miss the deadline but the UK leader “respectfully” disagreed. Over the economic front, the latest data from Britain have helped cut the odds of the BOE’s rate cut, that were previously seen as confirmed due to the Governor’s bearish tone and downbeat figures. According to BOEWATCH, BOE rate cut expectations reached 70% last week, but have since been trimmed, to 59%. Elsewhere, the market’s risk-tone remains heavy as the fears of China’s coronavirus outbreak spread across the board with the World Health Organization (WHO) terming it as “high” risk following the earlier “moderate” tag. With this, the US 10-year treasury yields seesaw near the early October lows to 1.61% whereas most stocks in Asia are in red despite Chinese markets’ off due to Lunar New Year break. While Thursday’s BOE will be the first trigger for the GBP/USD, followed by Brexit talks during the early February, traders will also keep eyes on the US data and risk headlines for intermediate direction. Technical Analysis Unless breaking a 21-day SMA level of 1.3070, the return of sub-1.3000 area can’t be denied.  

Speaking at a parliamentary hearing on Tuesday, Indonesian Finance Minister Sri Mulyani Indrawati said Indonesia's economic growth seems to have expan

Speaking at a parliamentary hearing on Tuesday, Indonesian Finance Minister Sri Mulyani Indrawati said Indonesia's economic growth seems to have expanded slightly in the fourth quarter of 2019 to 5.06%. Key Quotes: Consumption is likely to have stagnated and public spending weakened. Full-year 2019 growth was seen at 5.05%, below the government's target of 5.3%. The government is scheduled to release the official GDP data next week. USD/IDR Price Analysis: Indicators suggest downside momentum may be ebbing

USD/INR consolidates gains from the multi-day high, flashed yesterday, while declining to 71.40 ahead of the European session on Tuesday.

USD/INR pulls back from nearly three-week top flashed the previous day.Global financial markets, including Asia, bear the burden of China’s coronavirus outbreak.Indian budget is anticipated to unveil tax benefits while asset monetization is also likely.USD/INR consolidates gains from the multi-day high, flashed yesterday, while declining to 71.40 ahead of the European session on Tuesday. While fears surrounding the outbreak of China’s coronavirus weigh on the trading sentiment, the Indian rupee (INR) buyers expect special reliefs from the government in the upcoming union budget, up for publishing on Saturday. There are more than 107 confirmed deaths from the outbreak of coronavirus from China’s Wuhan city, which is locked down off-late. Additionally, more than 4,000 people are globally affected due to the epidemic that now has its traces in Germany, Japan, Sydney and the US. Chinese policymakers are on the go while the World Health Organization (WHO) also admitted the previous error of terming the global risk from the virus as “moderate” while putting it into the “high” risk category on Monday. While portraying the market’s risk-off mood, the US 10-year treasury yields drop to early-October lows while shares in Asia follow Wall Street that flashed losses by the end of Monday. Japan’s NIKKEI loses 0.90% to 23,134 whereas India’s BSE SENSEX mark gains in the hope of economic help from the government in the union budget. Nobel laureate and economist Abhijit Banerjee rang the alarm that the Indian economy is likely in recession. The same exerted additional pressure on the Narendra Modi-led government to take steps to ease market fears. In doing so, Saturday’s union budget is mostly expected to allow tax benefits from long-term capital gains tax and dividend distribution tax. Additionally, the government is also likely to sell some or most part of its assets to fund its capital expenditure. It’s worth mentioning that today’s US data-points and Wednesday’s FOMC could offer intermediate moves, together with updates on coronavirus outbreak, to the pair. Technical Analysis Multiple bounces of 71.6550/6750 seem to portray the buyers’ reluctance in accepting the higher levels, which in turn portrays the pair’s readiness to test 71.00 and monthly low near 70.58 on the break of short-term rising support line at 71.25 now. On the upside, 71.80 and 72.00 could please the bulls during the upside.  

Japanese Economy Minister Nishimura warned on Tuesday that corporate profits and factory production could likely take a hit from the China coronavirus

Japanese Economy Minister Nishimura warned on Tuesday that the Japanese corporate profits and factory production could likely take a hit from the China coronavirus outbreak. Key Quotes: There are concerns over the impact on the global economy from the spread of infection in China, transportation disruptions, cancellation of group tours from China and an extension in the Lunar Holiday. If the situation takes longer to subside, we're concerned it could hurt Japanese exports, output and corporate profits via the impact on Chinese consumption and production. On the above headlines, the Japanese yen remains unmoved, as USD/JPY keeps its bid tone intact around the 109 level amid the China coronavirus scare induced risk-aversion and broad US dollar strength.  

An OPEC source told S&P Global Platts late Monday that the Organization of Petroleum Exporting Countries (OPEC) is reportedly considering extending th

An OPEC source told S&P Global Platts late Monday that the Organization of Petroleum Exporting Countries (OPEC) is reportedly considering extending the ongoing production cuts or even deepening them to stem the excessive oil price declines due to the China coronavirus outbreak, as cited by oilprice.com. The ministers of the OPEC+ coalition are in discussion to closely watch the market and get ready “to do anything if there is a need for it, the source said. Meanwhile, Saudi Arabian Oil Minister Prince Abdulaziz bin Salman said: “The Kingdom of Saudi Arabia and other OPEC+ producers have the capability and flexibility needed to respond to any developments, by taking the necessary actions to support oil market stability, if the situation so requires.” Both crude benchmarks trade in the red amid broad risk aversion, as the China coronavirus death toll rises. WTI drops 0.50% to trades near $52.85, at the press time.

EUR/USD has erased almost entire gains seen in December and is fast closing on the psychological support at 1.10. The currency pair is currently tradi

EUR/USD has reversed December's rise from 1.1015 to 1.1240. The single currency has dropped despite a string of upbeat German data. EUR/USD has erased almost entire gains seen in December and is fast closing on the psychological support at 1.10.  The currency pair is currently trading at 1.1022, having started the month at 1.1222. The pair had risen from 1.1015 to 1.1240 in December.  Bears on top despite upbeat German data A majority of German economic data released this month reinforced expectations of a stronger economic rebound in 2020.  An Ifo institute economist on Monday said that it is likely the German economy would grow by 0.2% in the first quarter of 2020, having expanded by 0.1% in the final quarter of 2019. So far, however, the nascent recovery in the German economy has failed to impress the bulls. As noted earlier, EUR/USD has erased January gains.  The EUR's inability to score gains indicates the market focus has likely shifted to the possibility of a US-EU trade war following the signing of the US-China phase-one trade deal. That said, analysts at Danske Bank think a wider EU-US trade war is unlikely.  Also, the single currency took a beating last week as European Central Bank's President Christine Lagarde sounded more dovish-than-expected.  The single currency may continue to trade on the defense for the rest of the week as safe-haven US treasuries are drawing bids on Coronavirus fears. The bid tone around the US dollar would strengthen if the US Durable Goods, scheduled for release at 13:30 GMT on Tuesday, betters estimates.  Technical levels  

Considering the importance of analyzing historical market behavior around major epidemics, analysts at Nordea Markets recently came out with the marke

Considering the importance of analyzing historical market behavior around major epidemics, analysts at Nordea Markets recently came out with the market performance report near the outbreak of SARS, Bird and Swine flu. Key quotes Equities are likely to sell off temporarily, while long bonds could perform. Risk-off moves in FX space were limited, while Gold performed in commodity space. Current fatality rates of the Wuhan virus are still below that of SARS (3% vs. 10% approximately) but one should, of course, consider that China has at the very least doubled its importance for the global economy as a whole since 2002/2003 when SARS broke out.  Equities temporarily sold off post-SARS. Europe was hit the worst (20-25% drawdown), while the MSCI World drawdown was less than 10%. Hang Seng hit after both SARS and Bird-flu outbreaks. Long bonds up (rates lower), more cuts priced but only marginally flatter curve – same pattern in EUR and USD. Bunds rose markedly post the SARS-outbreak. Risk-off moves were limited in FX space. USD weakened ultimately while AUD and CAD performed. NOK and SEK performed flattish versus EUR. Current moves “outpace” the moves seen around SARS and Bird flu. Gold should be underpinned, while industrial metals could suffer.

USD/CHF pierces 0.9700 by the press time of early Tuesday. The pair have recently been recovering but not beyond a downward sloping trend line since January 16.

USD/CHF stays beyond 23.6% Fibonacci retracement but fails to clear a fortnight-long falling trend line.200-bar SMA, 61.8% Fibonacci retracement add to resistance.USD/CHF pierces 0.9700 by the press time of early Tuesday. The pair have recently been recovering but a downward sloping trend line since January 16 caps immediate upside. Even if the buyers cross 0.9715 resistance line, 200-bar SMA and 61.8% Fibonacci retracement of its December 24, 20119 to January 16, 2020 fall, near 0.9735 and 0.9750 respectively, could challenge the bulls. In a case where the USD/CHF prices rally beyond 0.9750, January 10 top surrounding 0.9765 could challenge further upside. Meanwhile, 23.6% Fibonacci retracement, at 0.9665, holds the key to pair’s declines towards the monthly bottom of 0.9613 and then to 0.9600 round-figure. USD/CHF four-hour chart Trend: Bearish  

Reuters reports the latest statement released by China’s National Health Commission (NHC) on the coronavirus outbreak, with the key headlines noted be

Reuters reports the latest statement released by China’s National Health Commission (NHC) on the coronavirus outbreak, with the key headlines noted below. Expects a one-week sufficient recovery for mild coronavirus symptoms. Mild coronavirus symptoms do not present as pneumonia, just slight fever. Difficulty in accessing hospital beds has been alleviated, protective suits still in short supply.

USD/IDR's downtrend from the May 2019 high of 14,525 may be running out of steam, according to key technical indicators. The 14-day relative strength

USD/IDR's daily chart indicators are reporting bullish developments. A corrective bounce to resistance near 14,700 could be in the offing.USD/IDR's downtrend from the May 2019 high of 14,525 may be running out of steam, according to key technical indicators.  The 14-day relative strength index has charted higher lows over the last two weeks, contradicting lower lows on the price chart. The bullish divergence indicates a price bounce could be in the offing.  The daily chart MACD histogram is also trending north (albeit below zero) since Jan. 17, warning an impending bullish reversal.  A move above 13,714 (Jan. 15 high) would imply a temporary bottom has been made and could yield a rally to 13,910 (September low). The odds of a corrective bounce would weaken if prices find acceptance under 13,560 (June 24 low).  Daily chartTrend: Bullish Technical levels  

South Korean Finance Minister Hong Nam-ki said in a policy meeting in Seoul that the government will fund efforts to contain the spread of coronavirus

South Korean Finance Minister Hong Nam-ki said in a policy meeting in Seoul that the government will fund efforts to contain the spread of coronavirus within the existing budget. Additional Headlines: Govt will be 'all out' to protect citizens from coronavirus, minimize the impact on the economy. Closely monitoring financial markets, will promptly act to stabilize markets if needed. The impact on local economy from coronavirus seen limited so far. Virus outbreak may impact S. Korea's exports, economic growth.

Prime Minister Shinzo Abe has nominated economist Seiji Adachi, a reflationist, to replace another reflationist Yutaka Harada on the Bank of Japan's p

Prime Minister Shinzo Abe has nominated economist Seiji Adachi, a reflationist, to replace another reflationist Yutaka Harada on the Bank of Japan's policy board. Japan's Diet, the national bicameral legislature, is likely to approve the nomination before Harada ends his five-year term on March 25. Adachi has written a book in the past on spurring prices to restore growth in the Japanese economy.  The BOJ has been running an ultra-accommodative monetary policy since 2013, but so far, inflation has remained well below the 2% target.  The central bank now looks to have run out of ammo. Meanwhile, Abe has been signaling since last year that achieving 2% inflation is not the only goal of his Abenomics policy to restore stable growth.
 

The Australian and New Zealand Banking Group analysts offer a quick reaction to the Australian NAB Business Survey that disappointed in December. Key

The Australian and New Zealand Banking Group analysts offer a quick reaction to the Australian NAB Business Survey that disappointed in December. Key Quotes: “Business conditions fell 1.6 points in December, putting an end to the gradual improvement over the previous few months. Business confidence dropped to -1.9, the lowest level since July 2013. The employment index was fairly stable at +4.2 and remains the standout component at 2.2pts above its long-run average. Forward orders improved 0.9pts, albeit not enough to get back into positive territory. Capacity utilization was down 0.2ppts to 80.9%. Profitability fell 2.5pts from its November eight-month high, while trading also fell 1.5pts. We expected that bushfires, smoke haze and a weaker Christmas shopping season could have had a negative effect, but NAB indicated that the impact of the bushfires may not yet be apparent in the results. NAB has previously warned that caution should be taken when interpreting the data around the Christmas/New Year period. We will look to the January survey due out in two weeks to get a better idea of the underlying momentum.”

According to people familiar with the matter, as cited by Reuters, US President Trump is scheduled to travel to India between February 21 and February

According to people familiar with the matter, as cited by Reuters, US President Trump is scheduled to travel to India between February 21 and February 24, with a day devoted to a joint public function with Prime Minister Narendra Modi. Officials said that the central focus of Trump's India visit is expected to be a trade deal, and the two leaders will also discuss China, the Indo-Pacific, Afghanistan, Iran and terrorism emanating from Pakistan. “They added that India's expectation from the interaction is the reinstatement of the Generalized System of Preferences (GSP) scheme, which allowed zero tariffs on exports worth $5.6 billion to the US. India is likely to roll back its retaliatory tariffs post the withdrawal of GSP. While the US wants India to buy around USD $6 billion worth of farm goods in order to cut down the trade deficit, New Delhi would like to get assurances on oil or shale gas to strike the deal,” per Hindustan Times. Meanwhile, USD/INR extends its overnight consolidative mode around 71.45 region, as the Asian currencies continue to remain under pressure on account of the China coronavirus spread, which benefits the safe-haven US dollar.

Gold has largely been in a consolidation mode since Monday's early Asian session and is currently sidelined near $1,580. The hourly chart shows the ye

Gold is trapped in a pennant pattern on the hourly chart. A breakout would allow a re-test of recent highs above $1,600.Gold has largely been in a consolidation mode since Monday's early Asian session and is currently sidelined near $1,580. The hourly chart shows the yellow metal is trapped in a pennant pattern. A bullish breakout would imply a continuation of the rally from the Jan. 24 low of $1,556 and would open the doors to re-test of the 2019 high of $1,611. On the other hand, the pennant breakdown would allow a drop to the hourly chart support at $1,567.  A pennant breakout looks likely, as the daily chart is reporting bullish conditions.  Hourly chartTrend: Neutral-to-bullish Technical levels  

The selling interest around the New Zealand dollar is now picking up the pace and is pushing NZD/USD lower to multi-week lows. At press time, the curr

Risk-off has pushed NZD/USD to multi-week lows below 0.6540.The pair may challenge the key ascending trendline if the risk aversion worsens. At press time, futures on the S&P 500 are pointing to risk reset. The selling interest around the New Zealand dollar is now picking up the pace and is pushing NZD/USD lower to multi-week lows.  At press time, the currency pair is trading at 0.6538, the lowest level since Dec. 11, having found acceptance under the previous seven-week low of 0.6542 a few minutes ago.  Offered on Coronavirus scare Risk is under pressure with fears dominating markets that China is struggling to contain the deadly Coronavirus.  Investors are growing increasingly concerned about the economic impact of the fast-spreading coronavirus. This is evident from the decline in the treasury yields and the losses in the equity markets. The US stocks fell by more than 1.5% on Monday and the 10-year yield declined to over three-month lows below 1.6%.  However, at press time, the futures on the S&P 500 are pointing to mild risk reset with a 0.30% gain. That may help NZD/USD reverse losses during the day ahead.  The currency pair will likely challenge and breach support of the trendline rising from October and November lows if risk aversion worsens.  "We expect the RBA and the Fed to cut by more than the RBNZ, however, risk-off sentiment in financial markets is likely to be a counter-balance to the change in interest rate differentials," Westpac analysts wrote in their weekly note.  Technical levels
 

After Bloomberg confirmed that the death toll China’s coronavirus jumped to 100 in Hubei province, China’s People’s Daily reports that the death toll

After Bloomberg confirmed that the death toll China’s coronavirus jumped to 100 in Hubei province, China’s People’s Daily reports that the death toll rises to 106. Total number of confirmed coronavirus cases in China at 4,193, the news outlet confirmed. Meanwhile, China announced that the 2020 spring semester for schools will be postponed due the fatal outbreak. The UK Telegraph cites that about 1,500 people who have returned to the UK from Wuhan since mid-January will be quarantined for at least a fortnight.

USD/JPY pulls back from 100-day SM awhile taking the bids to 109.03 during early Tuesday. Following its declines below 61.8% Fibonacci retracement of

USD/JPY recovers from nearly three-week low amid bearish MACD.50% Fibonacci retracement, 200-day SMA add to the support.61.8% of Fibonacci retracement offers short-term resistance.USD/JPY pulls back from 100-day SM awhile taking the bids to 109.03 during early Tuesday. Following its declines below 61.8% Fibonacci retracement of April-August 2019 fall, the pair dropped to the lowest since January 08, amid bearish MACD, in recent days. While 61.8% Fibonacci retracement, at 109.52, will act as the support-turned-resistance, 109.80 and 110.00 could entertain buyers ahead of making them confront the upper line of the trend channel stretched from early-October 2019, currently near 110.35. Alternatively, pair’s declines below 100-day SMA level of 108.70 will be limited by 50% Fibonacci retracement and 200-day SMA, 108.60 and 108.45 respectively. During the quote’s extended weakness under 108.45, the aforementioned channel’s support line near 107.90 will be the key to watch. USD/JPY daily chart Trend: Pullback expected  

Analysts at TD Securities enlist key economic events due out of the US on Tuesday, with the Durable Good Orders to headline. Key Quotes: “We forecast

Analysts at TD Securities enlist key economic events due out of the US on Tuesday, with the Durable Good Orders to headline. Key Quotes: “We forecast a 0.3% m/m decline in durable goods orders, largely explained by a retreat in the nondefense aircraft segment. The decline in the latter should offset a gain in ex-transportation orders, which we pencil in at +1.2% m/m. Separately, the consensus is looking for a modest improvement in the Richmond Fed's manufacturing index to -3 in Jan from -5 in Dec, which would be consistent with the gains in the regional indices published so far. Lastly, we anticipate a decent increase in the Conference Board's consumer confidence index, to 129.5 in Jan from 126.5 in Dec.”

ANZ analysts believe governments across the globe need to play a bigger role in supporting economic growth by loosening their purse strings. Key quote

ANZ analysts believe governments across the globe need to play a bigger role in supporting economic growth by loosening their purse strings.  Key quotes Recent easing by global central banks is putting a floor under the slowdown, which alongside a more conciliatory tone between the US and China is a welcome development.  The hurdle for further easing isn’t high, but with many central banks running low on ammo, it could be time for fiscal policy to up the ante. The global economy is expected to rebound in 2020, courtesy of aggressive monetary policy easing last year and thawing US-China trade tensions. The Federal Reserve delivered three 25 basis point rate cuts in the second half of 2020 and recently cited persistently high inflation as a prerequisite for rate hikes.  Both BOJ and the ECB are already running negative interest rate policies, while rates are closing to zero lower bound in Australia and New Zealand. So, there is limited room for further monetary stimulus.

USD/CNH consolidates the recent gains to 0.6815, stepping back from the four-week high of 6.9899, during the early Tuesday’s trading session.

USD/CNH bulls catch a breath after a multi-day-old upward trajectory.Coronavirus death toll reaches 106 globally with 4,295 confirmed cases.The US, Canada issued advice to avoid China's visit, Germany registered the first case.USD/CNH consolidates the recent gains to 0.6815, stepping back from the four-week high of 6.9899, during the early Tuesday’s trading session. The fears of China’s coronavirus outbreak propel the pair’s recent rally despite the Lunar New Year holidays in Beijing. With more than 100 deaths and +4,300 confirmations from across the globe, the coronavirus renews the fears of Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 26 countries during 2002/03. The US and Canada have already issued travel alerts whereas Germany recently registered its first case. Chinese authorities have extended the Lunar New year break from January 30 to February 02 with no clear directions for the schools/colleges to resume. The diplomats have also downed its tourism websites while banned inter-city travels to/from the major affected areas. Also positively supporting the pair are the recently published data from the US, including Monday’s Dallas Fed Manufacturing Business Index, which increases the optimism at the Fed. The contagion has severally challenged global trade sentiment while dragging the US 10-year treasury yields and Wall Street benchmarks down. Investors await fresh clues of any action plan to stop/cure the epidemic in order to renew the Chinese currency. Technical Analysis Buyers will wait for sustained trading beyond 7.000 mark to take aim at 100-day SMA near 7.0280.  

The director-general of the World Health Organization is visiting Beijing to assess China’s response to a deadly coronavirus as the death toll climbed

The director-general of the World Health Organization is visiting Beijing to assess China’s response to a deadly coronavirus as the death toll climbed to at least 100, Bloomberg News reports.  Key quotes Chinese officials said the virus isn’t yet under control despite aggressive steps to limit movement for millions of people who live in cities near Wuhan, the epicenter of the outbreak. Deaths in Hubei, where most of the fatalities have occurred, rose to 100 from 76, according to the latest number released by the provincial Health Commission. Confirmed cases in Hubei, where Wuhan is located, jumped to 2,714. China’s National Health Commission on Monday announced 80 deaths on the mainland. Cases of infection have been reported throughout Asia and Australia, as well as in the U.S., France and Canada. Germany confirmed its first case. WHO Director-General Tedros Adhanom Ghebreyesus said he’s heading to Beijing to meet with the government and assess the response. That follows a visit on Monday by Chinese Premier Li Keqiang to Wuhan. Last week, the WHO declined to label the coronavirus an international emergency, a designation that would have allowed the United Nations agency to begin coordinating government responses. As the outbreak accelerates, China has extended the Lunar New Year holiday to Feb. 2 from the original Jan. 30 date to reduce travel. Authorities have also locked down cities with a combined 40 million people around Wuhan, as they race to contain the virus. Market implications  The fear of contagion and the concerns that the virus is unlike nothing seen before is keeping markets on edge. The US 10-year Treasury yield drops below 1.60% for the first time since OctoberSubsequently, the S&P 500 lost 52 points, or 1.57%, to end near 3,244 while the Dow Jones Industrial Average, DJIA, lost 454 points, or 1.6%, to end 28,535, based on preliminary numbers. The Nasdaq Composite tumbled 176 points, or 1.9%, to close at around 9.139.  

EUR/USD is flashing green in Asia, having dropped for the third straight day on Monday. The currency pair is currently trading at 1.1025, representing

EUR/USD is attempting a corrective bounce, having dropped for three straight trading days. Key intraday indicators are reporting a bullish divergence. EUR/USD is flashing green in Asia, having dropped for the third straight day on Monday.  The currency pair is currently trading at 1.1025, representing marginal gains on the day.  The single currency could rise further to the descending 5-day average at 1.1043, as the hourly chart is reporting a bullish divergence of the relative strength index (RSI).  The  4-hour chart RSI has also created a bullish divergence (higher lows) and the MACD is printing higher lows below zero, indicating a weakening of downside momentum. The case for a corrective bounce would weaken if the spot finds acceptance under Monday's low of 1.1009. That would invalidate the bullish RSI divergence seen on the hourly and 4-hour charts.  4H chartTrend: Corrective bounce Technical levels  

Ahead of a scheduled press conference by New Zealand’s Prime Minister Jacinda Ardern, headlines are crossing the wires, announcing that NZ general ele

Ahead of a scheduled press conference by New Zealand’s Prime Minister Jacinda Ardern, headlines are crossing the wires, announcing that NZ general election will be held on September 19th this year.   More to come ...

Bloomberg news rpeorts that the new US travel alert, Level 3, is the second-highest of four State Department advisories. Key notes Previously, the US

Bloomberg news rpeorts that the new US travel alert, Level 3, is the second-highest of four State Department advisories. Key notes Previously, the US had urged citizens to “exercise increased caution” when visiting China, while avoiding any travel to the area near Wuhan, the city of 11 million where the epidemic started. The US may also expand travel screening at its borders and is closely monitoring 110 people to stop the virus, testing them for presence of the pathogen. As of Monday morning, there have been no new U.S. cases after the first five patients were identified in the past week. “At this time in the US, this virus is not spreading in the community,” said Nancy Messonnier, the Centers for Disease Control and Prevention’s director of the National Center for Immunization and Respiratory Diseases. Anxiety is growing amid evidence that the disease has an incubation period of as long as two weeks before those infected start to show symptoms. That raises the possibility that people could travel and eventually infect others before realizing they have the illness. But Messonnier said that so far there has been no clear evidence that the virus can spread during the incubation period before patients have symptoms. The new coronavirus appears to be less contagious than highly infectious viruses like the measles, she said. Coronaviruses like this one, so named because of their crown-like shape, are generally transmitted by respiratory droplets, she said.

The Baltic Dry Index – which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities – is down a staggering 78 percent

The Baltic Dry Index – which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities – is down a staggering 78 percent from highs in September, as noted by Jeroen Blokland, Portfolio Manager for the Robeco Multi-Asset funds, Robeco ONE and Robeco Pension Return Portfolio. Analysts are associating the relentless slide with an end to front-loading, triggering by easing of US-China trade tensions. The two sides signed the phase-one trade deal, which had been doing the rounds since the beginning of the final quarter of 2019.  The index, however, is considered a valuable indicator of the stage of the global economy. The steep slide, therefore, is also being viewed as a sign of a global economic slowdown. 
 

Analysts at TD Securities have explained that the Contagion concerns about the coronavirus resulted in a classic flight to quality trade over the past

Analysts at TD Securities have explained that the Contagion concerns about the coronavirus resulted in a classic flight to quality trade over the past week, with the S&P lower by 3% and 10y rates lower by 21bp. Key quotes "There remains substantial uncertainty about the virulence and transmission of the virus, and incoming news should keep markets on edge." "Coronavirus impacts markets through two channels — directly via Chinese growth (and hence global growth) and indirectly via a tightening in financial conditions. While the information to date doesn't suggest a global pandemic with significant growth implications, many questions persist." "One could argue that the market reaction so far to the coronavirus has been bigger than past outbreaks. However, it is difficult to use historical episodes to gauge the impact of a potential coronavirus epidemic on the economy and markets." "Each epidemic had different rates of transmission. Further, there were other significant macro developments that impacted markets at the time. Nevertheless, many of these episodes resulted in a negative impact on regional growth and a temporary risk-off reaction." "We took off our long 10y Treasury position at 1.6% as the risk-reward is no longer attractive given an uncertain headline-driven world. However, Treasuries remain a risk-off hedge and should benefit from more convexity receiving flows. We think that any further risk-off moves should be accompanied by a steeper 5s30s curve as the market should reprice for more Fed rate cuts."
 

WTI bears catch a breath as the quote flashes $53.00 during the initial trading session on Tuesday.

WTI seesaws near 15-week low flashed the previous day.Oversold RSI could repeat patterns registered from early-January 2019.$57.35/25 becomes the key resistance confluence.WTI bears catch a breath as the quote flashes $53.00 during the initial trading session on Tuesday. The energy benchmark recently dropped to the lowest since October and is declining towards 61.8% Fibonacci retracement of its upside from December 2018 to April 2019. Even so, overbought conditions of RSI can help repeat the bounces off $51.60 key Fibonacci level, if not then $50.00 could try disappointing the sellers. In a case where the black gold continues to linger beneath $50.00, high marked on December 26, 2018, near $47.00 will be in the spotlight. On the flip side, a 50% Fibonacci retracement level of $54.50 could please the short-term buyers during the pullback. However, a confluence of 100 and 200-day SMA, as well as 38.2% Fibonacci retracement, will cap the rise around $57.25/35, if not then a fresh run-up towards $60.00 could be expected. WTI daily chart Trend: Pullback expected  

The US 10-year treasury yield fell to over three-month lows on Monday as the government bonds drew haven bids amid the coronavirus scare. The benchmar

Treasury yields tumble as bonds draw haven bids amid Coronavirus scare. The 10-year has shed over 20 basis points in the last four days and has hit 3.5-month lows. The US 10-year treasury yield fell to over three-month lows on Monday as the government bonds drew haven bids amid the coronavirus scare.  The benchmark yield fell by 10 basis points to 1.596%, the lowest reading since Oct.10. That was the fourth straight decline. Notably, the 10-year yield has dropped by more than 20 basis points in the last four trading days.  The death toll in China due to the coronavirus rose to 80, officials said on Sunday, while adding that there had been more than 2,700 confirmed cases of the deadly pneumonia-like virus.  Macro data released on Monday did little to help stave off the decline in yields. The US New home sales fell unexpectedly in December to a seasonally adjusted annual rate of 694,000 units. Looking forward, increasing concerns about the economic impact of the fast-spreading coronavirus will likely keep yields under pressure. The World Health Organization (WHO) is worried about the emergency-like situation in China as the virus is spreading fast within the country. The international body, however, feels it is not a global emergency yet. 

Gold prices pull back from the three-week top to $1,581, -0.10%, amid Tuesday’s Asian session.

Gold trades near three-week high following the recent rush to risk-safety.Fears of China’s coronavirus and the US-Iran tension act as major drivers off-late.The US data, headlines from China, the Arab world will be in focus.Gold prices pull back from the three-week top to $1,581, -0.10%, amid Tuesday’s Asian session. That said, the bullion’s latest advances could be attributed to China’s coronavirus outbreak as well as a fresh tussle between the Middle East and the US. Even so, an absence of major catalysts during the early Asian session seems to weaken the quote off-late. The rise in the confirmed case of coronavirus infected personal in China’s Shanghai and Henan followed the first German incident that grabbed global attention. The US, Japan and Sydney already registered multiple such cases and have contributed their part to spread fears of an epidemic. On the other hand, the US is considering Iran’s satellite test as a challenge and threatens to join France in making Tehran behave like normal countries. This is despite the Iraqi government’s efforts to placate the Trump administration which hates repeated attacks on their troops in Iraq. While portraying the risk-off, the US 10-year treasury yields dropped to the lowest since early October on Monday whereas major Wall Street benchmarks registered losses in excess of 1%. Challenging the gold buyers is the US dollar strength that cheers its safe-haven demand and upbeat fundamentals. Due to the same, the US Federal Reserve is mostly expected to stand pat during its monetary policy decision on Wednesday. Ahead of that the US Durable Goods Orders and consumer confidence numbers could offer intermediate directions while news/headlines will be the key to follow. Technical Analysis Only if the prices break below a monthly trend line, at $1,560 now, sellers can take aim at $1,535 else chances of the precious metal’s run-up towards marking fresh multi-year high beyond $1,612 remain on the cards.  

CAD/JPY Daily Chart: Expecting pull back 4-Hour Char: Bearish and a long entry signal is still required Daily Chart: Potential for bullish H&S contin

CAD/JPY is lower on a collapse in oil prices and on risk-off flows.CAD/JPY has reached a key support structure where a pullback/upside correction could be expected. A continuation of the upside will likely require a period of consolidation. Bears can look for a continuation to 61.8% fino target and weekly support structure in next downside impulse. CAD/JPY Weekly Chart CAD/JPY Daily Chart: Expecting pull back 4-Hour Char: Bearish and a long entry signal is still required  Daily Chart: Potential for bullish H&S continuation Bears can target 61.8% Fibonacci retracement below 82 the figure CAD/JPY has seen some large paring back of longs which have subsequently sent the pair into an oversold condition at structural support in a fast downside move. A pullback might be expected to test the trendline support. However, the 4-hour outlook is not validating an upside bias at this stage, although the price is static at a compelling zone for a period of consolidation and choppiness which could equate into an H&S pattern, potentially before the next leg higher. On the other hand, should the risk-off themes continue, oil will continue to suffer, central banks will switch dovish and the yen will catch a prolonged bid as a safe haven? In such a scenario, the downside targets are made on the weekly outlook to the 61.8% Fibonacci retracement target.  Key notes about the coronavirus Officials say they have limited knowledge about the virus and the risks posed by its mutations. At least 81 are dead in China, and more than 2,700 are confirmed to be infected. Some health experts estimate up to 100,000 people could be infected. In a report written in The Hill, Joseph Guzman explains that Chinese officials warn infected patients can spread the virus before showing symptoms: A longtime adviser to the U.S. Centers for Disease Control and Prevention, Dr. William Schaffner, told CNN the new development means “the infection is much more contagious than we originally thought.”  Schaffner called it a game changer and warned current preventative methods won’t be enough to fight off the outbreak since tracking down the contacts a patient had before experience symptoms complicates the situation.  Market implications  The fear of contagion and the concerns that the virus is unlike nothing seen before is keeping markets on edge. The US 10-year Treasury yield drops below 1.60% for the first time since OctoberWTI: Bears going to town with the coronavirus, fresh lows of $52.18 printed   

AUD/USD looks set to print a 3.5-month low below 0.6750 with Australia's business confidence gauge hitting multi-year lows. The currency pair is curre

AUD/USD risks printing multi-month lows below 0.6750 on weak data. Australia's Business Confidence dropped to multi-year lows in December. Coronavirus scale is likely to keep the AUD on the defensive. AUD/USD looks set to print a 3.5-month low below 0.6750 with Australia's business confidence gauge hitting multi-year lows.  The currency pair is currently trading at 0.6753, representing marginal losses on the day, having hit a high of 0.6762 a few minutes before press time.  National Australia Bank's (NAB) Business Confidence weakened in December, falling 2pts to -2 index points, the lowest read since mid-2013. Meanwhile, Conditions edged 1pt lower in the month to +3 index points – another below-average result and one that is well below the level seen in early 2018, according to the official report. Business Confidence was seen rising to 1 from November's 0 reading, while Conditions was forecasted to drop to 3 from November's reading of 4. The US-China trade tensions ebbed significantly in the final months of 2019, even so, Australia's Business Confidence fell into the negative, possibly because the nation battled devastating bushfires in the final month of the year.  A sustained drop in the Business Confidence may force the Reserve Bank of Australia to take aggressive easing measures. Currently, the central bank is expected to keep rates unchanged at the Feb. 4 meeting and cut rates by 25 basis points in April.  Even so, AUD/USD may continue trade on the defensive during the day ahead, courtest of growing fears that China is struggling to contain the deadly coronavirus.  Technical levels  

Australia National Australia Bank's Business Confidence below expectations (1) in December: Actual (-2)

Australia National Australia Bank's Business Conditions in line with forecasts (3) in December

Following its failure to break 61.8% Fibonacci retracement of January 14-24 upside, GBP/USD pulls back to 1.3060 during the Asian session on Tuesday.

GBP/USD bounces off 61.8% Fibonacci retracement.The monthly bottom could regain bears’ attention on the downside break.Buyers will have multiple upside barriers beyond the nearby resistance confluence.Following its failure to break 61.8% Fibonacci retracement of January 14-24 upside, GBP/USD pulls back to 1.3060 during the Asian session on Tuesday. 200-hour SMA and a falling trend line since Friday restrict the pair’s immediate upside around 1.3065, a break of which could accelerate the recovery towards 1.3105/10 area comprising multiple tops marked recently. During the pair’s sustained run-up past-1.3110, 1.3150 and 1.3175 could lure the bulls. Meanwhile, a downside break of 61.8% Fibonacci retracement, at 1.3038, will push the bears in the direction to 1.3000 mark. However, the monthly bottom surrounding 1.2950 might question the sellers below 1.3000, if not then December month low near 1.2900 will be in focus. GBP/USD hourly chart Trend: Pullback expected  

Japan's Economic Minister, Yasutoshi Nishimura, has crossed the wires stating that they are closely monitoring the impact of the virus outbreak on the

Japan's Economic Minister, Yasutoshi Nishimura, has crossed the wires stating that they are closely monitoring the impact of the virus outbreak on the economy as 30% of foreign tourists to Japan are Chinese.The first case of the new coronavirus has been confirmed in GermanyKey notes about the coronavirus Officials say they have limited knowledge about the virus and the risks posed by its mutations. At least 81 are dead in China, and more than 2,700 are confirmed to be infected. Some health experts estimate up to 100,000 people could be infected. In a report written in The Hill, Joseph Guzman explains that Chinese officials warn infected patients can spread the virus before showing symptoms. A longtime adviser to the U.S. Centers for Disease Control and Prevention, Dr. William Schaffner, told CNN the new development means “the infection is much more contagious than we originally thought.”  Schaffner called it a game changer and warned current preventative methods won’t be enough to fight off the outbreak since tracking down the contacts a patient had before experience symptoms complicates the situation.  Market implications  The fear of contagion and the concerns that the virus is unlike nothing seen before is keeping markets on edge. The US was a risk of session:The US 10-year Treasury yield drops below 1.60% for the first time since OctoberSubsequently, the S&P 500 lost 52 points, or 1.57%, to end near 3,244 overnight while the Dow Jones Industrial Average, DJIA, lost 454 points, or 1.6%, to end 28,535, based on preliminary numbers. The Nasdaq Composite tumbled 176 points, or 1.9%, to close at around 9.139.

The weekly chart offers downside structure target The markets are thwarted with risk-off danger, so it is interesting to see which of the two usual s

Risk off markets are supporting both CHF and yen, with the latter making its mark overnight. Bulls will seek a continuation to prior support while the bears will target a break to prior 2018 resistance.Bullish target at prior support, awaiting 4-hr confirmation The weekly chart offers downside structure target The markets are thwarted with risk-off danger, so it is interesting to see which of the two usual suspects is under the most demand on a spot FX basis. As we can see, the yen is catching a bid and is down to test the prior resistance of the prior impulse. A break here opens risk to the 2019 August to December resistance. However, if this is just a healthy correction, we can expect the pair to continue on to test the prior support as indicated in the daily chart.   Risk-off marketsThe first case of the new coronavirus has been confirmed in Germany 

In its quarterly economic outlook, analysts at the Australia and New Zealand Baking Group (ANZ) say that the economy is at a crossroads and the politi

In its quarterly economic outlook, analysts at the Australia and New Zealand Baking Group (ANZ) say that the economy is at a crossroads and the political and international context will be crucial. Key quotes While capacity pressures have eased, economic momentum appears to be finding a floor, with drivers in place for gradual improvement over the next two years, despite headwinds. 2020 should bring a mild improvement in global growth, but for many economies, this won’t be sufficient to see inflation lift sustainably to target. The hurdle for further easing isn’t high, but with many central banks running low on ammo, it could be time for fiscal policy to up the ante. Housing market strength, fiscal spending, high terms of trade, the tight labor market and low-interest rates are expected to provide support. We assume the coronavirus outbreak will weigh a little on our export prices and volumes in the near term, but impacts are highly uncertain at this stage. GDP growth is expected to sit around trend on average, with inflation close to the target. The RBNZ can afford to be patient, waiting to see how the story unfolds. We now expect the OCR to remain on hold at 1% for the foreseeable future. One of the factors adding to an improved domestic outlook is the Government’s announcement to lift infrastructure spending, and that means more NZGBs on the issue.  We see upside risk from housing and fiscal spending, but large downside risks from unforecastable global shocks, including the potential impacts of the new coronavirus.

Japan Corporate Service Price Index (YoY) meets expectations (2.1%) in December

GBP/JPY recovers to 142.30 by the press time of Tuesday’s Asian session. In doing so, the pair takes a U-turn from 50-day EMA, not to mention staying

GBP/JPY bounces off 50-day EMA.An ascending trend line from early September 2019 offers strong support.Last week’s high can lure the buyers.GBP/JPY recovers to 142.30 by the press time of Tuesday’s Asian session. In doing so, the pair takes a U-turn from 50-day EMA, not to mention staying beyond a multi-month-old support line. As a result, prices are likely to revisit 23.6% Fibonacci retracement of the pair’s September-December 2019 upside, near 143.00, during the additional pullback. However, Wednesday’s top around 144.60 seems to cap the pair’s upside beyond 143.00, if not then its gradual run-up towards the previous month high surrounding 148.00 can’t be ruled out. Alternatively, the aforementioned medium-term support line, close to 142.00, will validate the pair’s declines below the 50-day EMA level of 142.14. With that, the bears could challenge the monthly low near 141.00 while targeting the 140.00 psychological magnet. GBP/JPY daily chart Trend: Pullback expected  

NZD/USD marks no change to the previous day’s close while taking rounds to 0.6544 during the early Asian session on Tuesday.

NZD/USD bears keep the baton around more than six-week low.New Zealand tourism and meat demand will bear the burden of China’s tough time.The economic calendar remains light, keeping attention to coronavirus.NZD/USD marks no change to the previous day’s close while taking rounds to 0.6544 during the early Asian session on Tuesday. The pair remains near the lowest in six weeks as fears of China’s coronavirus outbreak not only has a negative impact on commodity basket, as well as commodity-linked currencies, but also threaten New Zealand businesses. Following the suspension of transit in Hubei, China blocks another city, Tangshan in Hebei, as the lethal coronavirus spreads through the humans. The epidemic recalls the memories of SARS and MERS while taking nearly 100 lives so far, not to forget Chinese authorities’ claims of thousands being infected. While this weighs on the market’s risk tone and export-oriented currencies like the New Zealand dollar, the US 10-year treasury yields and Wall Street aptly portrayed the risk-off by the end of Monday. Additionally, New Zealand has a special connection with China as its tourism and meat business are heavily relied on Beijing and have recently performed wonders to please the Wellington-based government. In this regard, analysts at the Australia and New Zealand Banking Group (ANZ) said, “China has canceled tour-group bookings; these account for around a third of NZ tourist arrivals from that country. Reduced dining out in China will lower demand for NZ food, which tends to sit at the luxury end of the market where the foodservice channel is very important. This presents a downside risk to both meat and dairy prices in the near term. And the NZD will likely be under pressure.” Given the lack of major data/events during the Asian session, investors will keep eyes on the headlines from China to determine near-term trade direction. Technical Analysis Unless bouncing back beyond 50-day SMA, NZD/USD prices are vulnerable to visit 0.6520 ahead of taking rest on a 200-day SMA level of 0.6511.  

Following the French officials on Friday confirming three cases of the new coronavirus from China, marking the first time the deadly virus was detecte

Following the French officials on Friday confirming three cases of the new coronavirus from China, marking the first time the deadly virus was detected in Europe, we are now hearing of the first to reach Germany.  France's and Germany's announcement cone as more than a dozen countries around the world reported infections. Nepal also confirmed a case on Friday — the first in a South Asian country. Australia reported its first four cases Saturday and the US is now up to five cases.  Key notes about the coronavirus Officials say they have limited knowledge about the virus and the risks posed by its mutations. At least 81 are dead in China, and more than 2,700 are confirmed to be infected. Some health experts estimate up to 100,000 people could be infected. In a report written in The Hill, Joseph Guzman explains that Chinese officials warn infected patients can spread the virus before showing symptoms. A longtime adviser to the U.S. Centers for Disease Control and Prevention, Dr. William Schaffner, told CNN the new development means “the infection is much more contagious than we originally thought.”  Schaffner called it a game changer and warned current preventative methods won’t be enough to fight off the outbreak since tracking down the contacts a patient had before experience symptoms complicates the situation.  Market implications  The fear of contagion and the concerns that the virus is unlike nothing seen before is keeping markets on edge. The US 10-year Treasury yield drops below 1.60% for the first time since OctoberSubsequently, the S&P 500 lost 52 points, or 1.57%, to end near 3,244 while the Dow Jones Industrial Average, DJIA, lost 454 points, or 1.6%, to end 28,535, based on preliminary numbers. The Nasdaq Composite tumbled 176 points, or 1.9%, to close at around 9.139.

analysts at ANZ explained that they will be releasing our latest Quarterly Economic Outlook later this morning, but the forecasts could be out of date

analysts at ANZ explained that they will be releasing our latest Quarterly Economic Outlook later this morning, but the forecasts could be out of date rather quickly. Key quotes "There are a few key channels by which NZ will definitely be affected by the new coronavirus. China has cancelled tour-group bookings; these account for around a third of NZ tourist arrivals from that country. Reduced dining out in China will lower demand for NZ food, which tends to sit at the luxury end of the market where the food service channel is very important. This presents downside risk to both meat and dairy prices in the near term. And the NZD will likely be under pressure. These are the ‘knowns’. Beyond this, given it appears people are infectious before they are diagnosable, it seems likely the virus will rapidly become widespread, impacting economic activity (especially tourism) on a global scale. If it gets established in NZ that’s another ballgame. This could be a game changer for not just global markets but the global economy. Its likely scale and impact are highly uncertain, but the market’s alarm looks justified.
 

AUD/JPY stays under pressure, mostly quiet off-late, while taking rounds to 73.62 during early Tuesday morning in Asia.

AUD/JPY sellers catch a breath after breaking key supports (now resistances).50% Fibonacci retracement, 73.00 can act as nearby supports.November 2019 top will challenge buyers beyond 23.6% Fibonacci retracement.AUD/JPY stays under pressure, mostly quiet off-late, while taking rounds to 73.62 during early Tuesday morning in Asia. The pair slipped to the monthly low after breaking 100-day SMA and an upward sloping trend line since September 02 the previous day. With this, sellers now take aim at 50% Fibonacci retracement of its August-December 2019 upside, at 73.44, as immediate support. However, multiple stops around 73.00, marked since late-September, could question the pair’s further declines. In a case where AUD/JPY prices remain weak below 73.00, 61.8% Fibonacci retracement and October 2019 low can please the bears around 72.70 and 71.74 respectively. Meanwhile, an upside clearance of the confluence of support-turned-resistance and 38.2% Fibonacci retracement, surrounding 71.18/20, will confront a 100-day SMA level of 71.40. During the pair’s additional rise past-71.40, 23.6% Fibonacci retracement near 75.10 and November 2019 top close to 75.70 will be the bull’s favorites. AUD/JPY daily chart Trend: Bearish  

AUD/USD remains in the 11-pip range between 0.6763 and 0.6752, currently declining to 0.6760, by the press time of early Asian session on Tuesday.

AUD/USD awaits fresh clue to extend the heaviest losses in three weeks.Coronavirus weighs on the market’s risk tone, tension from the Middle East and the US data also play their roles.Aussie NAB Business Confidence in immediate focus, US data will be watched later but news will keep the driver’s seat.AUD/USD remains in the 11-pip range between 0.6763 and 0.6752, currently declining to 0.6760, by the press time of early Asian session on Tuesday. The quote earlier slipped to the early-October lows as the market’s fear of coronavirus contagion had a dual negative impact on the Aussie due to its close ties with China and also because of its risk-barometer image. The Aussie bears cheer the largest customer’s worries… An otherwise good Lunar New Year celebration time for China has turned into a nightmare for the dragon nation due to the outbreak of coronavirus. The lethal disease caused travel ban advises from the US and Canada while also pushing the policymakers to avoid any celebration, despite extending the New Year holidays, while concentrating on the solution. The widespread fears got a boost after the Hill quoted Chinese health officials that suggest an increased risk of a faster-growing epidemic. Other than the risks from China, renewed tension between the US and Iran have also gained global attention. The US Defence Secretary Mark Esper conveyed the Trump administration’s ability, together with France, to make Iran behave like a normal country. Also weighing on the pair could be the better than expected -3.1 to -0.2 figure of the US Dallas Fed Manufacturing Index. As for this, analysts at the Australia and New Zealand Banking Group said, “the January Dallas Fed index continued the improvement in regional manufacturing data. New orders, production and capacity utilization all rose, though employment eased. The regional data are all pointing to a basing in output as 2020 gets underway.” To better portray the market mood, the US 10-year treasury yields drop to the 15-week low to sub-1.6% whereas Wall Street also marked losses that are in excel of 1.0%. Looking forward, the National Australia Bank’s (NAB) Business Confidence and Business Conditions for December, expected 1 and 3 versus 0 and 4 respectively, could offer the immediate impulse for traders. Following that, the US Durable Goods Orders, the Richmond Fed Manufacturing Index and Consumer Confidence could grab the spotlight. It should, however, be noted that the news headlines from China and the Middle East will remain as the key market driver all the time. Technical Analysis Sellers await the quote’s declines below 0.6750 to question October 2019 low near 0.6670 while a pullback beyond 0.6800 can help recall 0.6850/55 back to the chart.  

USD/JPY drops to 108.90 at the start of Tuesday’s Asian session. In doing so, the pair tests the lowest since January 08 while also flashing losses fo

USD/JPY registers eight-day losing streak.Fears of China’s coronavirus outbreak negatively affect the market’s risk-tone, the US 10-year treasury yields and Wall Street.A little heavier economic calendar in the US session but nothing major during Asia.USD/JPY drops to 108.90 at the start of Tuesday’s Asian session. In doing so, the pair tests the lowest since January 08 while also flashing losses for the eighth day in a row. Concerns surrounding China’s coronavirus have recently smashed trade sentiment exactly when the global investors were started taking a sigh of relief. The US data came in mixed whereas tensions in the Middle East also weighed on the market’s performance. Coronavirus and the Middle East fire the risk-off with double-barrel… The Hill came out with the news, quoting China’s health officials, saying that the Coronavirus could be much more contagious than previously thought. The fatal virus has so far claimed nearly 100 lives and is likely to have infected more than 30, 000 inside China. The US has officially advised not to travel China, avoid Hubei, to travelers whereas policymakers in the dragon nation are grappling with the contagion, banning travels and extend the Lunar New Year break. Elsewhere, diplomats at the US and Iran ignore Iraq’s peace calls as Iran prepares for a satellite while Trump administration joins hand with France to make Tehran act like a normal country. Also favoring the risk-off could be the uncertainty surrounding the post-Brexit trade talks between the UK and the European Union (EU). The regional leaders keep their heads high whereas the British diplomats are also not in a mood to respect their old neighbors after getting the public support in the latest general election. While portraying the market’s fear, the US 10-year treasury yields drop to the lowest since October 09, with a low of 1.598%, whereas leading US equity benchmarks also drop by the press time. Among them, S&P 500 lost 50.93 points or 1.55% to 3,244.54 whereas Dow Jones Industrial Average (DJIA) dipped 447.71 points, -1.54%, to 28,542.02 by the end of Monday’s trading session. Further, Nasdaq also dropped 173.85 points Or 1.87% to 9,141.06. Given the current market sentiment moving against the risk-taking, mainly based on the events surrounding China and the Middle East, traders might pay a little attention to the economic calendar that has no major events/data scheduled for publishing. Even so, the US session could grab the traders’ attention back to the calendar as it will offer December month Durable Goods Orders, Richmond Fed Manufacturing and Consumer Confidence figures. Technical Analysis Despite breaking below 50-day SMA level of 109.20, USD/JPY prices are still beyond 100 and 200-day SMAs near 108.70 and 108.45 respectively. With this, prices are likely to witness a pullback before declining further.  

The Royal Bank of Scotland (RBS) mentions the list of top five risk that are being identified n the Global Risks report for 2020, unveiled at the Worl

The Royal Bank of Scotland (RBS) mentions the list of top five risk that are being identified n the Global Risks report for 2020, unveiled at the World Economic Forum in Davos, with major emphasis on the UK, the EU and the US economies. Key quotes Like sunbeams bursting through heavy clouds, the jobs market data yet again provided the UK economy with a well needed tonic.  With such strong job growth, the unemployment rate remained at 3.8%. Indeed, the majority of regions are registering figures around the 4% mark, including the North West (4.2%), East Midlands (3.9%) and Scotland (3.8%).  Reduced political uncertainty following the general election boosted business confidence in December. It was hoped that this would translate into a meaningful pick-up in business activity.  So, it proved.  HM Treasury is preparing for a new Budget, due on 11 March, and will have cheered the news of relatively modest increases in borrowing to date. You would have noticed that climate change became a front-page issue in recent months. And the Office for National Statistics is tracking the UK low carbon and renewable energy economy (LCREE).  The Euro area flash manufacturing PMI surprised on the upside in January 2020, rising to 47.8 versus 46.3 in December 2019, a five-month high. The United States is in the midst of an unprecedented economic boom. So said President Trump in an assured speech to the World Economic Forum. This omitted to mention that the US economic growth rate eased through 2019. But he still has a point.
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