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Jumaat, Januari 22, 2021

EUR/USD has been advancing amid upbeat PMIs and despite a souring market mood while Friday's 4-hour chart is showing that the pair is nearing the 1.21

EUR/USD has been advancing amid upbeat PMIs and despite a souring market mood while Friday's 4-hour chart is showing that the pair is nearing the 1.2190 strong resistance. See: EUR/USD to test 1.20 amid Italian political stress – Westpac Key quotes “One reason to advance is Markit's relatively upbeat Purchasing Managers' Indexes figures for January, but they only marginally exceeded estimates. Moreover, the services sector is still contracting, reflecting the pain of the lockdowns.”  “Investors are worried about the chances that President Joe Biden's $1.9 trillion stimulus proposal fails to gain traction. Senate Republicans have their reservations. The final deal could be smaller or just be dragged. Biden will deliver a speech on the economy at 19:45 GMT and the media may provide details earlier.” “Perhaps one of the factors underpinning the common currency is the European Central Bank's decision. The ECB said that risks remain tilted to the downside, but that they are ‘less pronounced.’ While ECB President Christine Lagarde also emphasized the need for monetary support – and the policy remained unchanged – the marginally more upbeat sentiment may be boosting sentiment.”  “Momentum on the 4-hour chart remains to the upside and euro/dollar is trending higher. It is now battling the convergence of the 100 and 200 SMAs around 1.2190 – which is the daily high. If EUR/USD breaks this critical resistance line, the next hurdle is 1.2220, which was a high point last week. Some support is at the daily low around 1.2150, followed by 1.2130 and 1.2080.”

USD/JPY is trading around 103.60, modestly up for the day, as the dollar is grabbing some attention. The pair would turn bullish only on a move beyond

USD/JPY is trading around 103.60, modestly up for the day, as the dollar is grabbing some attention. The pair would turn bullish only on a move beyond 104.40, Valeria Bednarik, Chief Analyst at FXStreet, reports. Key quotes “The market’s mood turned sour. It doesn’t seem to be a clear catalyst behind the U-turn in sentiment, although poor UK Retail Sales figures and mixed growth data coming from the EU exacerbate the dismal sentiment. Also, concerns about lockdown extensions and tighter restrictive measures weigh on the sentiment.” “Japanese data resulted mixed. December National inflation worsened from -0.9% to -1.2% YoY, slightly better than anticipated. The core reading which excludes fresh food prices, printed at -1%. The preliminary estimate of the January Jibun Bank Manufacturing PMI contracted to 49.7 from 50 in the previous month, missing expectations of 50.5.” “The bullish potential is limited as long as the USD/JPY pair remains below the 104.30/40 price zone, while the risk of a steeper decline would increase on a break below 103.25.”  

The USD/CAD pair refreshed daily tops in the last hour, with bulls now looking to build on the momentum further beyond the 1.2700 round-figure mark. H

A combination of factors prompted some short-covering move around USD/CAD on Friday.A sharp pullback in the equity markets benefitted the safe-haven USD and exerted pressure.Sliding crude oil prices undermined the loonie and further contributed to the positive move.The USD/CAD pair refreshed daily tops in the last hour, with bulls now looking to build on the momentum further beyond the 1.2700 round-figure mark. Having shown some resilience below the 1.2600 round-figure mark, or multi-year lows, the pair witnessed some short-covering move on Friday and was supported by a combination of factors. A sharp pullback in the equity markets extended some support to the safe-haven US dollar, while a weaker tone surrounding crude oil prices undermined the commodity-linked loonie. The imposition of a partial lockdown in China's capital city of Beijing resurfaced market concerns about the potential economic fallout from the ever-increasing coronavirus cases. This, in turn, dented the global risk sentiment and prompted investors to take some profits off the table, especially after the recent bullish run in the equity markets. On the other hand, the ongoing retracement in crude oil prices, now down around 2.0% for the day, weighed on the Canadian dollar and provided an additional boost to the USD/CAD pair. In fact, WTI retreated further from 11-month highs amid renewed worries about recovery in fuel demand. Apart from this, the commodity was pressured by Wednesday's data, which showed that US crude oil inventories surprisingly increased 2.6 million barrels last week. From a technical perspective, the USD/CAD pair was last seen flirting with 200-hour SMA. A sustained move beyond might trigger a fresh wave of the short-covering move and push the pair back towards a two-month-old descending trend-line resistance, around the 1.2765-70 region. market participants now look forward to Friday's economic docket, highlighting the release of Canadian monthly retail sales data and flash US PMI prints, for a fresh impetus. This, along with the official oil inventory data from the US, should influence the USD/CAD pair and assist investors to grab some meaningful trading opportunities on the last day of the week. Technical levels to watch  

The Australian dollar was amongst the strongest major currencies in the last quarter of 2020 and has begun 2021 in a similar fashion. Economists at CI

The Australian dollar was amongst the strongest major currencies in the last quarter of 2020 and has begun 2021 in a similar fashion. Economists at CIBC Capital Markets look for further strength in the AUD/USD pair amidst a broadly weaker USD and economic recoveries. Key quotes “From present levels, we target further gains in AUD/USD, to 0.7850 in Q1.” “A rebound in domestic economic activity, underpinned by accommodative monetary policy, was a strong driver of AUD strength to date. We anticipate that support to continue.” “The apparent shrugging off of trade tensions between Australia and China is notable, as there remains a clear sense of market caution over a situation that generates plenty of headlines. The significance being, that should some resolution be found, or tension itself calm, we would anticipate a positive response in AUD.” “On trade, the contribution of iron ore cannot be dismissed, any talk of that market between Australia and China would be concerning. Unless that is the case, we remain bullish and buyers of AUD weakness.”  

The single currency extends the bullish momentum and lifts EUR/USD to the proximity of the 1.2200 level on Friday, where it appears to have lost some

EUR/USD adds to Thursday’s gains and approaches 1.2200.German flash Manufacturing PMI came in below estimates in January.Preliminary PMIs, Existing Home Sales, EIA next in the US docket.The single currency extends the bullish momentum and lifts EUR/USD to the proximity of the 1.2200 level on Friday, where it appears to have lost some upside impetus. EUR/USD now targets 1.2200 EUR/USD records gains for the second session in a row although it has now retreated from earlier peaks near 1.2200 the figure following a lower-than-expected PMI reading in Germany. In fact, the anticipated Manufacturing PM in Germany came in a tad below consensus at 57.0 (from 58.3) for the month of January, while the same gauge surprised to the upside in France (51.5) and the broader Euroland (54.7). The upside momentum in the pair has been sustained in past sessions by the renewed softer tone in the greenback and later by the somewhat upbeat tone from Chief Lagarde at her press conference, all following the steady stance from the ECB at its monetary policy gathering on Thursday. Later in the US calendar, Markit will also publish its preliminary PMIs seconded by Existing Home Sales and the weekly report by the EIA. What to look for around EUR The recovery in EUR/USD managed to reach the area just below the 1.2200 mark on Friday. While downside pressure looks somewhat mitigated for the time being, the outlook for EUR/USD remains constructive and appears supported by prospects of a strong recovery in the region (and abroad), which is in turn underpinned by extra fiscal stimulus by the Fed and the ECB. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR along with the huge, long positioning in the speculative community. EUR/USD levels to watch At the moment, the pair is up 0.11% at 1.2174 and a break above 1.2189 (weekly high Jan.22) would target 2349 (2021 high Jan.6) en route to 1.2413 (monthly high Apr.17 2018). On the flip side, the next support is located at 1.2071 (55-day SMA) seconded by 1.2053 (2021 low Jan.18) and finally 1.1976 (50% Fibo of the November-January rally).

The upside momentum in USD/CNH could still reach the 6.5200 region in the next weeks. Key Quotes 24-hour view: “We expected USD to weaken further yest

The upside momentum in USD/CNH could still reach the 6.5200 region in the next weeks. Key Quotes 24-hour view: “We expected USD to weaken further yesterday but we were of the view that ‘any decline is expected to face solid support at 6.4450’. However, USD traded in a relatively quiet manner between 6.4561 and 6.4705. Upward momentum is beginning to build-up and USD is likely to edge higher from here. That said, any advance is expected to face solid resistance at 6.4880. Support is 6.4600 followed by 6.4550.” Next 1-3 weeks: “There is not much to add to our update from Wednesday (20 Jan, spot at 6.4800). As highlighted, while upward momentum has been dented, there is still chance for USD to move to 6.5200. Only a break of 6.4450 (no change in ‘strong support’ level) would indicate that USD is not ready to move to 6.5200.”

The GBP/USD pair added to its intraday losses and refreshed daily lows, around mid-1.3600s in reaction to disappointing UK PMIs. The pair witnessed so

GBP/USD came under some selling pressure on Friday and eroded a part of the overnight gains.The GBP was weighed down by indications of a prolonged lockdown and dismal UK macro data.A pullback in the equity markets benefitted the safe-haven USD and contributed to the downfall.The GBP/USD pair added to its intraday losses and refreshed daily lows, around mid-1.3600s in reaction to disappointing UK PMIs. The pair witnessed some heavy selling on Friday – snapping three consecutive days of the winning streak – and eroded a major part of the overnight gains to the highest level since May 2018. The British pound was weighed down by indications of an extended lockdown in Britain, which means a further slowdown in the economic activity. The sterling lost some additional ground following the release of downbeat UK Retail Sales figures, which recorded a modest rise of 0.4% in December. Adding to this, the UK PMI prints missed market expectations by a big margin, which further added to worries about the UK economic growth at the start of 2021 and exerted additional pressure on the GBP. In fact, the flash version of the UK Manufacturing PMI dropped to 52.9 in January as against consensus estimates pointing to a fall to 54 from 57.5 previous. Meanwhile, the gauge for the services sector plunged further into the contraction territory and came in at 38.8 for the reported month, worse than 45 anticipated and 49.4 recorded in December. Apart from this, a pullback in the equity markets provided a modest lift to the safe-haven US dollar. This was seen as another factor that contributed to the offered tone surrounding the GBP/USD pair and the intraday decline. It, however, remains to be seen if pair can attract some dip-buying or the pullback marks a near-term top, setting the stage for further weakness. Technical levels to watch  

Brent crude oil prices are currently close to $56/bbl, having started the year at$52/bbl. Suvro Sarkar, Industry Analyst at DBS Bank, revises up the a

Brent crude oil prices are currently close to $56/bbl, having started the year at$52/bbl. Suvro Sarkar, Industry Analyst at DBS Bank, revises up the average Brent Crude Oil price forecast for 2021 to $55-60/bbl and introduces the 2022 average Brent Crude Oil price forecast of $60-65/bbl.  Key quotes “Brent averaged around $43/bbl in 2020. We are likely to see a much better year for oil in 2021, as demand recovers (by around 6mmbbpd by our projections), while supply remains curtailed by OPEC+ production cut agreements (increasing by around 3.0mmbpd by our projections, less than the demand increase). While oil demand is still not expected to recover close to pre-covid levels in 2021; the pace of demand growth is nevertheless expected to outstrip the pace of supply growth in 2021, leading to inventory drawdowns and stronger oil prices overall.” “With a stronger start to the year in our forecasts now, we thus raise our average 2021 Brent crude oil price forecast to$55-60/bbl. We also introduce 2022 average Brent crude oil forecast of$60-65/bbl on the assumption that air travel recovers closer to normal levels in 2022, OPEC+ discipline stays and US shale growth is contained under the new Biden administration.” “There remain a few key risks to our projections: increasing production from Libya, which is exempt from the OPEC+ agreement, possibility of less hawkish stance on Iran from the Biden administration, which could bring some Iranian barrels back to the market over time, chances of dissent among OPEC+ members recurring at some point, leading to a breakdown of the OPEC+ supply cuts agreement, faster-than-expected comeback from US shale over the course of the year, and of course, hiccups in economic growth revival depending on the speed of vaccine rollouts and efficacy levels.”  

more to come ...

UK Manufacturing PMI misses estimates with 52.9 in Jan.Services PMI in the UK contracts to 38.8 in Jan, a big miss. GBP/USD sees fresh supply and hits daily lows near 1.3660. more to come ...

United Kingdom Markit Manufacturing PMI registered at 52.9, below expectations (54) in January

United Kingdom Markit Services PMI below expectations (45) in January: Actual (38.8)

United Kingdom Markit Manufacturing PMI below expectations (54) in January: Actual (53.9)

Economists predict the Eurozone economy to grow at a slow pace in 2021 before accelerating sharply in 2022, a European Central Bank (ECB) quarterly su

Economists predict the Eurozone economy to grow at a slow pace in 2021 before accelerating sharply in 2022, a European Central Bank (ECB) quarterly survey of professional forecasters showed on Friday. Key takeaways "See real GDP growth in the Eurozone at 4.4% this year, down from 5.3% in the previous edition of the survey." "As for next year, the survey showed the economy was now expected to expand by 3.7%, compared to 2.6% in the October poll."   more to come ...

The EUR/GBP cross refreshed daily tops during the early European session, with bulls now looking to build on the momentum further beyond the 0.8900 ma

A combination of factors assisted EUR/GBP to stage a goodish bounce from multi-month lows.A possible extension of lockdowns in Britain, downbeat UK macro data weighed on the sterling.Hawkish ECB, mostly upbeat Eurozone PMIs underpinned the euro and remained supportive.The EUR/GBP cross refreshed daily tops during the early European session, with bulls now looking to build on the momentum further beyond the 0.8900 mark. The cross gained some strong positive traction on the last trading day of the week and recovered further from eight-month lows, around the 0.8830 region touched in the previous session. The British pound turned out to be the worst-performing currency on Friday, which, in turn, prompted some short-covering around the EUR/GBP cross. The sterling was weighed down by indications that lockdown restrictions in Britain will be extended and lost some additional ground following the release of downbeat UK Retail Sales figures. In fact, the headline figures showed a growth of 0.3% in December, while core sales increased by 0.4% MoM, both missing consensus estimates. On the other hand, the shared currency was underpinned by a slight hawkish tweak by the European Central Bank (ECB) on Thursday. In the post-meeting press conference, the ECB President Christine Lagarde said the central bank might not need to exhaust the €1.85 trillion PEPP envelope if favourable financing conditions can be maintained. The euro found additional support from German data, which showed that business activity in the services sector contracted less than anticipated in January. The IHS Markit flash German Services PMI came in at 46.8 for the reported month as against consensus estimates pointing to a fall to 45.3 from 47.0 recorded in December. Meanwhile, the gauge for the German manufacturing sector missed expectations and fell to 57 in December from 58.3 previous. Separately, the Eurozone flash manufacturing PMI came in slightly better than expected but was largely offset by a further contraction in the region's dominant services industry. Friday's economic docket also features the release of the flash UK PMI prints. This, along with developments surrounding the coronavirus saga, might influence the GBP price dynamics and produce some short-term trading opportunities around the EUR/GBP cross. Technical levels to watch  

more to come ...

Eurozone Manufacturing PMI arrives at 54.7 in Jan vs. 54.6 expected.Bloc’s Services PMI stands at 45.0 in Jan vs. 45.0 expected.The Eurozone manufacturing sector activity slowed a tad bit this month, although bettered the consensus forecast, the latest manufacturing activity survey from IHS/Markit research showed on Friday. The Eurozone Manufacturing purchasing managers index (PMI) improved from 55.2 in December to in January and beat 54.6 expectations while the Services PMI dropped to in Jan vs. 45.0 expected and 46.4 last. The IHS Markit Eurozone PMI Composite arrived at 47.5 in Jan vs. 47.9 expected and 49.1 previous. Comments from Chris Williamson, Chief Business Economist at IHS Markit “A double-dip recession for the eurozone economy is looking increasingly inevitable as tighter COVID19 restrictions took a further toll on businesses in January. Output fell at an increased rate, led by worsening conditions in the service sector and a weakening of manufacturing growth to the lowest seen so far in the sector’s seven-month recovery.” “Some encouragement comes from the downturn being less severe than in the spring of last year, reflecting the ongoing relative resilience of manufacturing, rising demand for exported goods and the lockdown measures having been less stringent on average than last year.”

European Monetary Union Markit PMI Composite came in at 47.5, below expectations (47.6) in January

European Monetary Union Markit Services PMI came in at 45, above expectations (44.5) in January

European Monetary Union Markit Manufacturing PMI came in at 54.7, above forecasts (54.5) in January

The CAD is up slightly versus the USD so far this year, in contrast to most other majors, helped by a climb in crude prices alongside a less dovish Ba

The CAD is up slightly versus the USD so far this year, in contrast to most other majors, helped by a climb in crude prices alongside a less dovish Bank of Canada (BoC) announcement than expected. New targets of economists at CIBC Capital Markets show a smaller loonie depreciation ahead. Key quotes “Markets were mulling over the possibility that the BoC would undertake a micro-cut of 10-15 bps in January with an eye towards dampening enthusiasm for further C$ appreciation. Instead, as we expected, the Bank opted to keep rates on hold, but nudged up their estimate for the economy’s non-inflationary potential output, so as to avoid having a stronger growth outlook accelerate the timetable for rate hikes.” “The market is still pricing in BoC hikes ahead of the Fed, a scenario that isn’t likely to materialize. Note that our forecast has the US output gap closing earlier than Canada’s reflecting the latter’s greater retrenchment in 2020.”  “At a future rate decision date, the BoC might try to reinforce its dovish stance, and signal it will hike later than the Fed, by announcing that it’s adopting average inflation targeting for 2022 and beyond. That could see the C$ give back some of its recent gains.” “Q1 2021: 1.30 | Q2 2021: 1.32”  

The greenback finds it difficult to leave behind the recent weakness and now navigates without a clear direction in the vicinity of the 90.00 mark whe

DXY alternates gains with losses just above the 90.00 level.US 10-year yields drop below the 1.10% mark.Markit’s flash PMIs, housing data and EIA report next on tap.The greenback finds it difficult to leave behind the recent weakness and now navigates without a clear direction in the vicinity of the 90.00 mark when tracked by the US Dollar Index (DXY). US Dollar Index looks to risk trends, data The index exchanges gains with losses and trades close to the 90.00 mark at the end of the week, all against the backdrop of the renewed drop in US 10-year yields and mitigating upside pressure in the risk complex. In fact, yields of the key US 10-year benchmark hover around the 1.10% zone, coming down from earlier peaks in the 1.12% region. In the meantime, the index is on the way to close the first week with losses after two consecutive advances. The recent pick-up in the reflation trade, mainly after Joe Biden’s inauguration and his plans to pump around $1.9 trillion in fiscal stimulus, has been weighing on the buck and sparked the correction lower from tops in the 91.00 region. In the US data space, Markit will release its advanced PMIs followed by Existing Home Sales and the weekly report on US crude oil supplies by the EIA. What to look for around USD DXY’s upside run out of steam in the 91.00 region earlier in the week, sparking a subsequent a corrective move to the vicinity of 90.00. Occasional bullish attempts in the dollar, however, are expected to be short-live amidst the fragile outlook for the greenback in the short/medium-term, and always amidst the massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy. US Dollar Index relevant levels At the moment, the index is losing 0.02% at 90.11 and faces the next support at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and the 88.25 (monthly low February 2018). On the other hand, a breakout of 91.01 (weekly high Dec.21) would open the door to 92.07 (100-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop).

In its latest economic assessment report, the Japanese government downgraded its view on private consumption for the second straight month. Additional

In its latest economic assessment report, the Japanese government downgraded its view on private consumption for the second straight month. Additional takeaways “Maintains view that economy is in severe condition due to coronavirus but showing signs of picking up.” “Japan govt slashes assessment of business conditions, saying "cautiousness" could be seen mainly among service-sector firms.” “Japan govt raises assessment of capital spending, housing construction.”

GBP/USD has been falling from the highs as three dark clouds hit sterling but President Biden's economic speech and the accelerated UK vaccination cam

GBP/USD has been falling from the highs as three dark clouds hit sterling but President Biden's economic speech and the accelerated UK vaccination campaign may boost sentiment, Yohay Elam, an Analyst at FXStreet, reports. See – GBP/USD: The close above 1.3712 pushes the 1.3836 February 2016 low to the fore – Commerzbank Key quotes “Britain's hospitals have been struggling under an ever-growing flow of patients, and easing restrictions may come later and be extended. These concerns have been weighing on sterling, alongside two other developments. UK Retail Sales rose by only 0.3% in December, far worse than expected. Last and not least, GBP/USD has been on the back foot amid a souring market mood. Republicans seem reluctant to back additional spending. While Democrats have room to move forward on their own, support from the opposition would ensure a large package and a quick delivery.” “Biden is slated to deliver a speech on the economy later on Friday. The president may either go for quick and small wins – pushing non-controversial issues in early February – or aiming for the larger package. The latter would take time. Markets would like to see more funds and the sooner, the better. The safe-haven dollar would drop when markets rise and fall if they return to gains.” “Britain has already administered jabs to around 7.5% of the population but has yet to reach the target rate of 500,000 inoculations per day. Any acceleration would be welcome.”  “Some resistance awaits at 1.3680, which capped the pair in early January. It is followed by 1.3720, the previous 2021 peak. Support is at 1.3620, which was a stepping stone on the way up, followed by 1.3525, a cushion seen last week.”  

more to come ...

German Manufacturing PMI arrives at 57.0 in Dec vs. 57.5 expected.Services PMI in Germany improves to 46.8 in Dec vs. 45.3 expected.EUR/USD bounces from 1.2150 on mixed German PMIs.The German manufacturing sector expanded less-than-expected in January, the preliminary manufacturing activity report from IHS/Markit research showed this Friday. The German manufacturing purchasing managers index (PMI) arrived at 57.0 in January versus 57.5 expected and 58.3 previous, hitting four-month lows.   more to come ...

Germany Markit Services PMI came in at 46.8, above expectations (45.3) in January

Germany Markit Manufacturing PMI registered at 57, below expectations (57.5) in January

Germany Markit PMI Composite above expectations (50.3) in January: Actual (50.8)

Gold (XAU/USD) is licking its wounds above $1860, although remains exposed to downside risks amid a broadly stronger US dollar and mixed technical vie

Gold clings to losses as the US dollar remains firmer on the session.Mixed technical picture on the 1H chart keeps the sellers hopeful. $1865 will offer strong resistance if XAU/USD bounces further.Gold (XAU/USD) is licking its wounds above $1860, although remains exposed to downside risks amid a broadly stronger US dollar and mixed technical view. The US dollar remains on the bid, drawing haven demand amid potential risks to US President Joe Biden’s $1.9 trillion stimulus proposal and mounting coronavirus concerns globally. Although, the bulls could be rescued by the weakness in the US Treasury yields, as markets turn risk-averse ahead of Biden’s speech due later on Friday at 1945 GMT. The US Markit Preliminary PMIs also remains in focus heading into the weekend. Gold Price Chart: Hourly As observed in the hourly chart, gold wavers in a falling channel formation, with the recovery moves likely capped by $1865. That level is the intersection of the 21-hourly moving average (HMA) and 50-HMA. Also, it’s worth noting that a bearish crossover is formed on the said time frame, as the 21-HMA cuts the 50-HMA from above. Therefore, the bearish pressures remain intact so long as the price holds below the $1865 hurdle. Acceptance above that level could bring the two-week highs of $1875 back in play. To the downside, the channel trendline support at $1856 is likely to be tested, below which the upward-sloping 100-HMA at $1852 will be put at risk. The Relative Strength Index (RSI) points south while trending below the midline, suggesting that there is more room to the downside. Gold Additional levels  

The USD/JPY pair edged higher through the early European session and was last seen trading near the top end of its daily range, around the 103.65-70 r

A modest pickup in the USD demand assisted USD/JPY to gain some traction on Friday.A pullback in the equity markets, sliding US bond yields might cap gains for the major.The USD/JPY pair edged higher through the early European session and was last seen trading near the top end of its daily range, around the 103.65-70 region. Following the previous day's consolidative price move near two-week lows, the pair regained traction on the last trading day of the week and was supported by a modest pickup in the US dollar demand. That said, a combination of factors might hold bulls from placing aggressive bets and cap gains for the USD/JPY pair. A sharp pullback in the equity markets could lend some support to the Japanese yen's relative safe-haven status. Given that a lot of positive news was already priced in the markets, investors opted to take some profits off the table amid renewed concerns about the economic fallout from the ever-increasing COVID-19 cases. Meanwhile, the global flight to safety was reinforced by a fresh leg down in the US Treasury bond yields. This might keep a lid on any meaningful upside for the greenback. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move for the USD/JPY pair. Market participants now look forward to the release of the flash version of the US PMI prints for some short-term trading impetus. This, along with developments surrounding the coronavirus saga, will play a key role in influencing the safe-haven JPY and assist traders to grab some short-term opportunities around the USD/JPY pair. Technical levels to watch  

In the year to date, the pound has gained ground versus both the US dollar and the euro. Economists at Rabobank forecast the EUR/GBP pair around the 0

In the year to date, the pound has gained ground versus both the US dollar and the euro. Economists at Rabobank forecast the EUR/GBP pair around the 0.89/0.88 area in the coming months while a return to the 0.87 level is not expected until later in the year. Key quotes “The forthcoming BoE meeting on February 4 may bring some additional colour to the inflation outlook in the UK, though for now, the market appears to be more confident that a negative Bank rate will be avoided.” “The fact that the UK’s lockdown could extent into March and given evidence that its rapid vaccine programme is still a way off from halting the pandemic in the country, we see scope for additional gains in the pound to be limited near-term.”  “We retain our forecast that EUR/GBP is likely trade in the 0.89/0.88 region in the coming months and may not see a return to the 0.87 level until later in the year.”  

France Markit PMI Composite came in at 47 below forecasts (49) in January

France Markit Services PMI below expectations (48.5) in January: Actual (46.5)

France Markit Manufacturing PMI above expectations (50.5) in January: Actual (51.5)

According to economists at Natixis, the extremely rapid growth in the money supply in OECD countries may give rise to a loss of confidence in OECD cur

According to economists at Natixis, the extremely rapid growth in the money supply in OECD countries may give rise to a loss of confidence in OECD currencies among economic agents due to fears of a loss in the value of money. Key quotes “Central banks in OECD countries have implemented a considerable increase in the money supply. If there is excess money supply, economic agents anticipate the loss of value of money, and in an extreme situation, this leads to a loss of confidence in money and a flight from money (an attempt to get rid of money before its value falls).” “Even though the rise in overall stock market indices has not yet been very pronounced and real estate prices or corporate valuations have not yet risen abnormally, and the price of gold is no longer rising, the fact that we are seeing an appreciation of the exchange rates of safe-haven and emerging currencies, a sharp rise in the price of Bitcoin and in the stock market indices of technology companies perhaps shows the beginnings of a loss of confidence in OECD currencies.”  

The NZD/USD pair extended its retracement slide from weekly tops and refreshed daily lows, around the 0.7180-75 region during the early European sessi

NZD/USD started retreating from the 0.7225-30 supply zone despite upbeat NZ CPI figures.A pullback in equities benefitted the safe-haven USD and exerted some pressure on the kiwi.The NZD/USD pair extended its retracement slide from weekly tops and refreshed daily lows, around the 0.7180-75 region during the early European session. The pair failed to benefit from hotter-than-expected domestic consumer inflation figures, instead met with some fresh supply near the 0.7225-30 resistance zone amid a pullback in the equity markets. In fact, the headline CPI rose 0.5% during the fourth quarter of 2020 and increased 1.4% YoY, both beating consensus estimates. That said, the imposition of a partial lockdown in China's capital city of Beijing revived market concerns about the potential economic fallout from the ever-increasing coronavirus cases. This, in turn, weighed on the risk sentiment, which prompted some profit-taking and led to a modest pullback in the equity markets. This was seen as one of the key factors that extended some support to the safe-haven US dollar and drove flows away from the perceived riskier kiwi. The NZD/USD pair, for now, seems to have stalled this week's goodish rebound from sub-0.7100 levels touched on Monday and remains at the mercy of the USD price dynamics. Hence, the key focus will remain on developments surrounding the coronavirus saga, which might continue to influence the broader market risk sentiment and drive demand for the safe-haven USD. Apart from this, the flash version of the US PMI prints for January will also be looked upon for some short-term trading impetus. Technical levels to watch  

The UK Environment Secretary George Eustice said in a statement on Monday, the government doesn’t think it is right at the moment to go for full borde

The UK Environment Secretary George Eustice said in a statement on Monday, the government doesn’t think it is right at the moment to go for full borders closure. Additional quotes Manufacturing capacity is main restriction on speed of vaccine rollout. Thinks new border paperwork will be fine once businesses get used to it. We know asking people to self-isolate is a financial challenge. No decisions have been made on payments for those with positive covid tests. Always keep options under review. We understand lockdown measures are quite draconian. Lockdown will end once we've made more progress on vaccine rollout. Lockdown will go on for as long as it needs to. Government is considering full closure of borders. For now the restrictions we have on travel are sufficient.

Although economic growth and rising yields have weighed on the gold price, economists at ANZ Bank see the backdrop as supportive as rising inflation k

Although economic growth and rising yields have weighed on the gold price, economists at ANZ Bank see the backdrop as supportive as rising inflation keeps the real interest rate lower.  On Friday, gold (XAU/USD) is consolidating within Thursday’s trading range above $1850, as investors await President Joe Biden’s speech for the next direction. Key quotes “We expect gold to find a floor at its current level, as the increasing inflationary pressure suggests lower real rates will remain in place.”  “If the US approves more stimulus, the US dollar will remain depressed,  which in turn favours gold prices.” “The key risk to our view is early policy normalisation, if economic growth rebounds strongly.”  

According to economists at Westpac, Italian political stress may hold back dissemination of the Recovery Fund and weigh on EUR/USD. Thus, the pair cou

According to economists at Westpac, Italian political stress may hold back dissemination of the Recovery Fund and weigh on EUR/USD. Thus, the pair could test support of its current 1.20-1.23 range.  Key quotes “Inflation risks remain to the downside within the region given the extension of stringent lockdowns across its major economies. ZEW current conditions in the region have failed to follow the surges seen in ZEW expectations. The index tends to lead regional inflation and this therefore underscores the lack of inflationary pressures.”  “In addition to vaccine roll-outs there is bound to be further discussion about Recovery Fund implementation. Italy’s political stress may cause net donor countries to resist early release of funds, putting pressure on post-covid lockdown recovery and swinging easing pressure back on to ECB.”  “EUR/USD has been capped around 1.23 and is at risk of sorely retesting 1.20 range support.”  

GBP/USD is off 1.37 after hitting a new 33-month high as the cable closed on Thursday at 1.3712. Karen Jones, Team Head FICC Technical Analysis Resear

GBP/USD is off 1.37 after hitting a new 33-month high as the cable closed on Thursday at 1.3712. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, highlights the 1.3836 February 2016 low as the next target in the upside.  Key quotes “GBP/USD has at last eroded 1.3712. The close above 1.3712 on a daily chart closing basis pushes the 1.3836 February 2016 low to the fore. Longer-term the 2018 peak at 1.4377 is being targeted.”  “Currently while dips hold over 1.3520 remains bid. Below 1.3520 would alleviate immediate upside pressure for losses to the 1.3350 late December low, there is scope for the 1.3244 seven-month uptrend.” “Currently, the Elliott wave count is implying a slide to 1.3370/1.3500.”  

Gold (XAU/USD) witnessed good two-way price movements and settled almost changed at $1869 on Thursday. According to FXStreet’s Dhwani Mehta, gold bear

Gold (XAU/USD) witnessed good two-way price movements and settled almost changed at $1869 on Thursday. According to FXStreet’s Dhwani Mehta, gold bears are set to retain control below the 21-DMA at $1876 while the focus shifts to the US Markit PMI and President Biden’s speech. Key quotes “Heading into the weekend, the correction in gold will likely to continue, as markets rethink whether the massive US fiscal stimulus could help stimulate the economic recovery.” “The main drivers remain the US Markit Preliminary Manufacturing PMI and President Joe Biden’s speech for fresh direction on the prices. Biden is due to speak on his administration’s response to the economic crisis.” “A breach of the $1859 50-DMA support could expose the 200-DMA cap at $1848. The next relevant support awaits at $1832, the January 20 low.” “A firm break above the $1876 21-DMA barrier is needed for a test of the horizontal 100-DMA at $1883. However, the path of least resistance appears to the downside so long as the XAU bulls hold below the 21-DMA.”  

The GBP/USD pair lost some additional ground in reaction to downbeat UK macro data and dropped to fresh session lows, around the 1.3675-70 region in t

GBP/USD edged lower on Friday and eroded a part of the overnight gains to near three-year tops.Indications that UK lockdowns could be extended, downbeat UK macro data weighed on the GBP.A modest pullback in the equity markets benefitted the safe-haven USD and added to the selling.The GBP/USD pair lost some additional ground in reaction to downbeat UK macro data and dropped to fresh session lows, around the 1.3675-70 region in the last hour. The pair witnessed some selling on the last trading day of the week and eroded a part of the previous session's strong positive move to the highest level since May 2018. The British pound was weighed down by indications that lockdown restrictions will be extended in the UK and weakened further following the release of UK Retail Sales data. In fact, the headline figures recorded a modest growth of 0.3% MoM in December, while core sales (stripping the auto motor fuel sales) stood at 0.4% MoM. This marked a notable rebound from sharp contraction recorded in November but the readings were well short of market expectations and exerted some additional pressure on the sterling. Apart from this, the GBP/USD pair was further pressured by a modest pickup in the US dollar demand amid a modest pullback in the equity markets. The imposition of fresh lockdowns in China prompted investors to take some profits off the table following the recent strong rally, led by hopes for additional US fiscal stimulus measures. Investors have been pricing in the prospects for a massive US fiscal spending in 2021 under Joe Biden's presidency. This, along with the optimism over the rollout of vaccines for the highly contagious coronavirus disease, has been fueling expectations for a strong economic recovery and boosting investors confidence. The underlying bullish sentiment, in turn, might keep a lid on any meaningful recovery for the greenback and help limit the downside for the GBP/USD pair. This makes it prudent to wait for some strong follow-through selling before confirming that the pair has topped out in the near-term and positioning for any further corrective slide. Market participants now look forward to the release of the flash version of the UK PMI prints for January. A weaker than expected reading will add to the market worries about the UK economic growth at the start of 2021 and prompt some fresh selling around the GBP/USD pair, paving the way for an extension of the intraday corrective slide. Technical levels to watch  

Here is what you need to know on Friday, January 22: Markets are edging lower and the safe-haven dollar is gaining ground amid concerns of extended lo

Here is what you need to know on Friday, January 22: Markets are edging lower and the safe-haven dollar is gaining ground amid concerns of extended lockdowns, vaccination bottlenecks, and hurdles to passing US stimulus. President Biden delivers an economic speech late in the day, after PMIs. Bitcoin's range is expanding. After several days of gains, global stocks are on the back foot and the safe-haven dollar is gaining ground, especially against commodity currencies. Concerns about travel limits in Europe, an extension of Britain's lockdown into the summer, and also restrictions in Hong Kong are weighing on sentiment. President Joe Biden presented his pandemic plan, which aims to treat coronavirus as a national emergency and aims to vaccinate 100 million Americans in 100 days. Critics say the immunization plan is unambitious. Biden will deliver a speech on the economy late in the day amid Republican reservation on some parts of his $1.9 billion stimulus deal.Gold is off the highs amid concerns that the president's relief package will not be fully materialized. XAU/USD pared some of its inauguration-related gains. Bitcoin plunged below $30,000 and rebounded above that level as volatility grows. Cryptocurrencies have been receiving more attention from a broader community of investors in the past weeks, following BTC's ascent.  Bitcoin Price Forecast 2021: BTC reaching new horizons, aiming for $100,000 The European Central Bank left its policy unchanged and seemed marginally more optimistic. However, President Christine Lagarde later urged caution, sending the euro back down from a short-lived move higher. Eurozone Purchasing Managers' Indexes are set to show a growing divide between growth in the manufacturing sector and a struggling services sector.  See Markit Eurozone January PMI Preview: Manufacturing looks aheadGBP/USD is off 1.37 amid the souring mood and amid the disappointing UK Retail Sales, which advanced by only 0.3% in December. Britain's COVID-19 cases are falling and the vaccination campaign continues at full speed. UK preliminary PMIs for January are on the docket. Australian Retail Sales figures for December disappointed with a drop of 4.2%, pushing AUD/USD lower.  Five factors moving the US dollar in 2021 and not necessarily to the downside

Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of their impact on the European curre

German/ Eurozone flash PMIs Overview Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of their impact on the European currency and the related markets as well. The flash manufacturing PMI for Germany, due at 0830 GMT, is seen falling to 57.5 in January from December’s 58.3 final print while the services sector is likely to contract further to 45.5 this month vs. 47.0 last. The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 54.6 for January vs. 55.2 seen in the previous month. The Eurozone services sector PMI is seen weaker at 45.0 in the reported month vs. December’s 46.4. How could they affect EUR/USD? The EUR/USD pair is feeling the pull of gravity, as the US dollar extends its recovery amid broad risk-aversion. Heading into the data release, the main currency pair trades flat at 1.2158, having eased from daily highs of 1.2178. “From a technical perspective, any subsequent positive move is likely to confront some resistance near the 1.2200 round-figure mark. This is followed by resistance near the 1.2235-40 region.” explains FXStreet’s Analyst Haresh Menghani. “On the flip side, the 1.2130 level now seems to protect the immediate downside ahead of the 1.2100 mark. Failure to defend the mentioned support levels might prompt some technical selling and turn the pair vulnerable to retest weekly lows, around the 1.2055-50 region,” Haresh adds. Key notes ECB on hold and hoping to stay there EUR/USD: Daily recommendations on major EUR/GBP Price Analysis: Struggles to extend monthly resistance breakout towards 0.8900 About German/ Eurozone flash PMIs The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.

FX Strategists at UOB Group noted further pullbacks in USD/JPY is expected to meet solid contention in the 103.00 neighbourhood in the short-term hori

FX Strategists at UOB Group noted further pullbacks in USD/JPY is expected to meet solid contention in the 103.00 neighbourhood in the short-term horizon. Key Quotes 24-hour view: “We highlighted yesterday that USD ‘could dip below the strong support at 103.40’. We added, ‘oversold conditions suggest 103.00 is unlikely to come into the picture’. Our view was not wrong as USD dipped to 103.31 before recovering to close little changed at 103.48 (- 0.04%). While downward pressure has eased, it is too soon to expect a sustained rebound. That said, there is room for USD to edge higher but any advance is viewed as part of a 103.35/103.75 range (a clear break of 103.75 is unlikely).” Next 1-3 weeks: “Yesterday (20 Jan, spot at 103.90), we highlighted that USD ‘could continue to trade sideways, likely within a 103.40/104.40 range’. USD is currently approaching the bottom of the range at 103.40 and shorter-term momentum is beginning to improve. The bias is tilted to the downside but any weakness is likely limited to a test of the major support at 103.00. On the upside, a break of 104.20 would indicate the current mild downward pressure has eased.”

The USD/CAD pair edged higher through the early European session and climbed to fresh daily tops, around the 1.2680 region in the last hour. The pair

A combination of factors assisted USD/CAD to stage a modest bounce from multi-year lows.A pullback in the equity markets benefitted the safe-haven USD and extended some support.Sliding crude oil prices undermined the loonie and remained supportive of the positive move.The USD/CAD pair edged higher through the early European session and climbed to fresh daily tops, around the 1.2680 region in the last hour. The pair managed to gain some positive traction on the last trading day of the week and built on the previous day's modest bounce from sub-1.2600 levels, or multi-year lows. A weaker tone surrounding crude oil prices undermined the commodity-linked loonie, which, in turn, was seen driving the USD/CAD pair higher. Oil retreated further from 11-month highs touched last week and was weighed down by worries that the imposition of lockdown restrictions will curb fuel demand. The black gold was further pressured by data released on Wednesday, showing that US crude oil inventories surprisingly increased by 2.6 million barrels last week. Apart from this, a modest pullback in the equity markets extended some support to the US dollar and provided an additional boost to the USD/CAD pair. Investors opted to take some profits off the table following the recent strong rally to record highs, which was driven by hopes for a massive US fiscal stimulus measures. Investors have been pricing in the prospects for more aggressive fiscal spending in 2021 under Joe Biden's presidency. This comes amid the optimism over the rollout of vaccines for the highly contagious coronavirus disease and fueled hopes for a strong global economic recovery, eventually boosting investors' confidence. Moving ahead, market participants now look forward to Friday's economic docket, highlighting the release of Canadian monthly retail sales data and flash US PMI prints, for a fresh impetus. This, along with the official oil inventory data from the US, should assist investors to grab some meaningful trading opportunities. Technical levels to watch  

The UK retail sales came in at 0.3% over the month in December vs. 1.2% expected and -3.8% previous. The core retail sales, stripping the auto motor f

The UK Retail Sales came in at 0.3% MoM in December.Core Retail Sales for the UK rose b y0.4 % MoM in December.The cable hits fresh daily lows below 1.37 on dismal UK Retail Sales.The UK retail sales came in at 0.3% over the month in December vs. 1.2% expected and -3.8% previous. The core retail sales, stripping the auto motor fuel sales, stood at 0.4% MoM vs. 0.8% expected and -2.6% previous.             more to come ...

United Kingdom Public Sector Net Borrowing above expectations (£32.283B) in December: Actual (£33.375B)

United Kingdom Retail Sales (YoY) came in at 2.9% below forecasts (4%) in December

United Kingdom Retail Sales ex-Fuel (YoY) below forecasts (7%) in December: Actual (6.4%)

United Kingdom Public Sector Net Borrowing came in at £6.4B, below expectations (£32.283B) in December

United Kingdom Retail Sales ex-Fuel (MoM) registered at 0.4%, below expectations (0.8%) in December

United Kingdom Retail Sales (MoM) below expectations (1.2%) in December: Actual (0.3%)

AUD/USD is holding the lower ground below 0.7750, as the US dollar rebound gathers traction in early Europe amid souring risk sentiment. Skepticism pr

AUD/USD drops amid risk-off mood-led US dollar bounce.  Weaker-than-expected Australian Retail Sales add to the downside. Markets await US Markit PMIs and Biden’s speech for fresh cues.AUD/USD is holding the lower ground below 0.7750, as the US dollar rebound gathers traction in early Europe amid souring risk sentiment. Skepticism propped up over the passage of US President Joe Biden’s ambitious $1.9 trillion stimulus package in Congress, which has weighed on the market mood, lifting the haven demand for the US dollar. Further, major global economies are still battling the coronavirus surge, despite the vaccines rollout, re-igniting global economic growth concerns. Therefore, investors flock to the safety bet US dollar at the expense of higher-yielding assets such as the aussie, S&P 500 futures etc.    At the time of writing, AUD/USD loses 0.35% to trade at 0.7736 while the futures tied to the S&P 500 index are seen at 3,825, down 0.27% on the day. Moreover, the aussie also suffers as the Australian December preliminary Retail Sales showed a big drop of 4.2% MoM in December. The retreat in gold and oil prices also renders negative for the commodity-currencies such as the aussie dollar. Attention now turns towards the US Markit Prelim PMIs and Biden’s speech for fresh trading incentives. In the meantime, the risk-off flows and USD dynamics will continue to have a major bearing on the spot. AUD/USD: Technical levels    

Traders scaled back their open interest positions for the second session in a row on Thursday, this time by nearly 5k contracts according to advanced

Traders scaled back their open interest positions for the second session in a row on Thursday, this time by nearly 5k contracts according to advanced prints from CME Group. In the same line, volume went down by around 125.6K contracts. Natural Gas could attempt a near-term rebound Thursday’s negative performance of natural gas prices came on the back of shrinking open interest and volume, leaving the probability of extra decline somewhat diminished. The key hurdle on the upside remains at the $3.00 per MMBtu while the 200-day SMA around $2.26 is expected to hold the downside.

In opinion of FX Strategists at UOB Group, AUD/USD is now expected to trade between 0.7640 and 0.7820 in the next weeks. Key Quotes 24-hour view: “Our

In opinion of FX Strategists at UOB Group, AUD/USD is now expected to trade between 0.7640 and 0.7820 in the next weeks. Key Quotes 24-hour view: “Our expectation for AUD to ‘test 0.7790’ did not materialize as it traded between 0.7742 and 0.7785. The underlying tone still appears to be positive and there is chance for AUD to test 0.7790. The major resistance at 0.7820 is not expected to come into the picture. Support is at 0.7740 followed by 0.7720.” Next 1-3 weeks: “There is not much to add to our update from yesterday (21 Jan, spot at 0.7755). As highlighted, AUD has moved into a consolidation phase and is likely to trade between 0.7640 and 0.7820.”

The Reserve Bank of New Zealand (RBNZ) may not need to go for further interest rate cuts following an upside surprise to New Zealand’s Q4 CPI report,

The Reserve Bank of New Zealand (RBNZ) may not need to go for further interest rate cuts following an upside surprise to New Zealand’s Q4 CPI report, Bloomberg reports, citing Jarrod Kerr, Chief Economist at Kiwibank in Auckland.   more to come ...

CME Group’s flash data for crude oil futures markets noted open interest rose for the second session in a row on Thursday, this time by around 29.2K c

CME Group’s flash data for crude oil futures markets noted open interest rose for the second session in a row on Thursday, this time by around 29.2K contracts. Volume followed suit and dropped for the second straight session, now by nearly 231K contracts. WTI meets strong resistance at $54.00 The upside momentum in prices of the WTI faltered in the $54.00 neighbourhood once again. Thursday’s doji-like session was on the back of rising open interest, leaving the door open for some rangebound theme in the very near-term while resistance is still seen around the $54.00 mark per barrel.

EUR/GBP eases from the intraday top to 0.8879 while heading into Friday’s European session. In doing so, the quote prints 0.22% gains on a day, the fi

EUR/GBP eases from highest in three days as bulls await fresh push.Break of short-term resistance line, now support, bullish MACD and strong RSI conditions favor bulls.Sellers need to refresh monthly low for fresh entries.EUR/GBP eases from the intraday top to 0.8879 while heading into Friday’s European session. In doing so, the quote prints 0.22% gains on a day, the first in the last three days, while keeping the upside break of a descending trend line from January 06. Not only immediate resistance line breakout, now support, but bullish MACD signals and upbeat RSI line also suggests further upside of EUR/GBP prices. As a result, a one-month-old falling trendline and lows marked during December 31, around 0.8930, followed by 100-bar EMA near 0.8940, lures the EUR/GBP buyers for now. However, any further upside won’t hesitate challenging the monthly top surrounding 0.9085 wherein the 0.9000 threshold can offer an intermediate halt during the rise. Alternatively, the pair’s drop back below the immediate support line, at 0.8870 now, will attack the monthly low, also the lowest since May 2020, around 0.8830. Should EUR/GBP bears keep the helm below 0.8830m, the 0.8800 round-figure and April 2020 low near 0.8670 can come back to the radars. EUR/GBP four-hour chart Trend: Further upside expected  

Cable could edge higher to the 1.3800 region in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We expected GBP to ‘t

Cable could edge higher to the 1.3800 region in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We expected GBP to ‘trade between 1.3620 and 1.3720’ yesterday. However, it rose to 1.3745 before closing on a firm note at 1.3736 (+0.56%). Despite the gains, upward momentum has not improved by all that much. That said, the bias is for GBP to move higher and while a break above 1.3760 would not be surprising, the next resistance at 1.3800 is likely out of reach. On the downside, a break of 1.3685 would indicate that the current upward pressure has eased (minor support is at 1.3705).” Next 1-3 weeks: “On Wednesday (20 Jan, spot at 1.3645), we highlighted that GBP ‘has to close above 1.3710 before a sustained advance can be expected’. GBP rose to 1.3745 yesterday (21 Jan) before closing at 1.3736. Upward momentum has improved and GBP is likely to strengthen towards 1.3800. On the downside, a break of 1.3630 (‘strong support’ level was at 1.3580 yesterday) would indicate that the upside risk has dissipated.”

Open interest resumed the downtrend on Thursday and dropped by around 3.2K contracts in light of preliminary readings from CME Group. In the same line

Open interest resumed the downtrend on Thursday and dropped by around 3.2K contracts in light of preliminary readings from CME Group. In the same line, volume retreated for the second session in a row, now by around 83.3K contracts. Gold faces some potential consolidation Thursday’s inconclusive price action in gold was amidst shrinking open interest and volume, hinting at the likelihood of some consolidation in the very near-term. In the meantime, the next target on the upside remains at the $1,900 per ounce for the time being.

FX option expiries for Jan 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2100 758m 1.2275 1.9bn - USD/JPY: U

FX option expiries for Jan 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2100 758m 1.2275 1.9bn - USD/JPY: USD amounts          103.25 399m 103.30 402m 103.50 881m 104.00 430m    - USD/CAD: USD amounts         1.2600 569m 1.2700 672m

FX Strategists at UOB Group now see EUR/USD moving into a consolidative phase, likely between 1.2080 and 1.2225 in the next weeks. Key Quotes 24-hour

FX Strategists at UOB Group now see EUR/USD moving into a consolidative phase, likely between 1.2080 and 1.2225 in the next weeks. Key Quotes 24-hour view: “Our expectation for EUR to ‘dip below 1.2075’ was wrong as it rebounded to 1.2173 before closing on a firm note at 1.2162 (+0.48%). Upward momentum has improved, albeit not by much. The rebound has scope to extend to 1.2195 but is unlikely to threaten the next resistance at 1.2225. Support is at 1.2135 followed by 1.2115.” Next 1-3 weeks: “We have held a negative view in EUR since early last week. As EUR struggled to extend its decline, we highlighted on Wednesday (20 Jan, spot ta 1.2130) that EUR ‘has to move and stay below 1.2080 within these 1 to 2 days or odds for a move lower to 1.2010 would diminish quickly’. While EUR subsequently dropped to 1.2075, it rebounded strongly yesterday and edged above our ‘strong resistance’ level of 1.2170 (high of 1.2173). The price actions suggest that the weak phase that started earlier last week has ended. The current movement is viewed as the early stages of a consolidation phase and EUR is expected to trade between 1.2080 and 1.2250 for a period of time.”

USD/INR rises to 73.02, up 0.06% intraday, during the initial hour of the Indian trading session on Friday. In doing so, the quote teases the key psyc

USD/INR takes the bids near intraday top while again piercing the 73.00 threshold.MACD turns bullish, suggesting further recovery towards previous support.Bears will wait for fresh low of the month for entries.USD/INR rises to 73.02, up 0.06% intraday, during the initial hour of the Indian trading session on Friday. In doing so, the quote teases the key psychological magnet thrice since Wednesday. However, the flip in the MACD, in favor of the bulls, suggests the quote’s ability to challenge the earlier support line, now resistance, stretched from January 04 near 73.05. In addition to the immediate resistance line, a downward sloping trend line from January 11 and 100-bar SMA, around 73.15, as well as a one-month-old resistance line, close to 73.20, also challenge USD/INR bulls. Should the quote rallies past-73.20, 200-bar SMA and the monthly top, 73.40 and 73.56 respectively, will return to the charts. On the contrary, the weekly low of 72.89 can challenge short-term USD/INR sellers ahead of directing them to the monthly bottom of 72.85. Also acting as a downside filter is September’s low close to 72.75. To sum up, USD/INR remains in a downtrend even as the latest corrective pullback is likely to stay for now. USD/INR four-hour chart Trend: Further recovery expected  

Gold (XAU/USD) is consolidating within Thursday’s trading range above $1850, as investors await President Joe Biden’s speech for the next direction. M

Gold (XAU/USD) is consolidating within Thursday’s trading range above $1850, as investors await President Joe Biden’s speech for the next direction. Markets are weighing in the prospects of the US fiscal spending and its impact on the economic recovery. Further, concerns over a quick passage of Biden’s $1.9 trillion stimulus proposal by the US Congress weigh on the metal. Profit-taking heading into the weekend also seems to keep the gold bulls unnerved.   Meanwhile, the US dollar wallows near weekly lows, which could offer some support to gold prices. Let’s look at the technical graphs for better understanding. How is gold positioned on the charts? Gold Price Chart: Key resistances and supports The Technical Confluences Indicator shows that gold is testing major support at $1863, which is the confluence of the SMA5 one-hour and the previous week high. Powerful support at $1860 will guard the downside. That level is the intersection of the SMA50 one-day, pivot point one-day S1 and the previous low four-hour. A failure to resist above the latter would open floors towards $1857, the Fibonacci 38.2% one-month. Further south, the confluence of the SMA50 four-hour and SMA10 one-day at $1848 could challenge the bears’ commitment. To the upside, strong resistance around $1870 could be tested. The Fibonacci 61.8% one-day and SMA10 four-hour meet at that point. The XAU bulls need to crack critical barrier at $1877 (SMA100 four-hour, pivot point one-day R1) to unleash further upside. The SMA100 one-day at $1883 would be next on the buyers’ radars. Here is how it looks on the tool   About Confluence Detector The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.  

Having witnessed upbeat inflation numbers for December on Wednesday, GBP/USD traders are waiting for Friday’s UK Retail Sales, to be published at 07:0

UK Retail Sales Overview Having witnessed upbeat inflation numbers for December on Wednesday, GBP/USD traders are waiting for Friday’s UK Retail Sales, to be published at 07:00 GMT, for fresh impulse. The key data to British GDP, Retail Sales, is expected to rise from -3.8% prior contraction to +1.2% % MoM in December. The same is likely to help total retail sales that are seen rising from 2.4% to 4.0% over the year in the reported month. Additionally, core retail sales, stripping the basket off motor fuel sales, are also likely to print upbeat readings with +0.8% MoM and +7.0% YoY numbers compared to -2.6% and +5.6% respective priors. It should be noted that the preliminary readings of the UK’s Manufacturing and Services PMIs for January, up for publishing near 09:30 GMT Friday, also become important data for the Cable traders. Deviation impact on GBP/USD Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 80 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, can fuel movements of up to 150 pips. How could it affect GBP/USD? GBP/USD fails to cheer the US dollar weakness during early Friday as the coronavirus (COVID-19) fears do probe the bulls near the highest since May 2018. The quote snaps four-day winning streak, currently down 0.18% near 1.3712, amid chatters over the British policymakers' push to UK PM Boris Johnson for complete closure of national boundaries. While the covid woes can join the Brexit disappointment to probe the GBP/USD buyers, a sustained run-up in the Retail Sales will amplify the early-week inflation data and back BOE Governor Andrew Bailey’s rejection to the negative rates. TD Securities anticipate a mild recovery in the UK Retail Sales figures as they say, We look for a -0.3% m/m decline (market forecast +0.6%), on the back of the -3.8% drop in November. There's a huge amount of uncertainty though, as the end of the year was a complex time for retailers, bouncing between a 'lite' lockdown in November, a limited re-opening in early December, and then another shutdown in large parts of the country at the end of the month as the new Covid variant saw the government moving quickly to tighten restrictions. The impact on food store sales, which comprise about 40% of UK retail sales, is especially uncertain, due to strict limits on gatherings over Christmas. It's unclear how the downside impact from no big Christmas or New Year's Eve celebrations balanced out against the upside to food store sales from restaurants being closed (so more eating at home), and the fact that there would have been many more single-household celebrations (fewer big turkeys, more turkey crowns). We suspect that the net impact would have been negative, which is the main driver of our below-consensus forecast. Technically, multiple tops marked during January highlight the 1.3700 as the key immediate support whereas the weekly rising trend line near 1.3685 adds to the downside filter. Meanwhile, the 1.3800 lures GBP/USD bulls if at all they manage to return. Key notes GBP/USD stays above 1.3700 despite looming border close in Britain, eyes UK Retail Sales, PMIs   GBP/USD Forecast: Bulls not ready to give up About the UK Retail Sales The retail sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.

Having recently dropped to the lowest since January 08, USD/CHF seesaws around 0.8850 during early Friday’s trading. The Swiss currency pair refreshed

USD/CHF sellers catch a breather after refreshing two week low.Downside break of 21-day SMA, descending RSI line favor sellers.50-day SMA, monthly top offer a tough nut to crack for buyers.Having recently dropped to the lowest since January 08, USD/CHF seesaws around 0.8850 during early Friday’s trading. The Swiss currency pair refreshed a multi-day low after breaking 21-day SMA. The downside move also takes support from receding RSI. As a result, USD/CHF sellers seem to target a retest of the horizontal support comprising multiple levels since December 17, around 0.8820. Although the pair’s weakness past-0.8820 becomes less likely, any further declines will not hesitate to break the 0.8800 while challenging the monthly low of 0.8857. Alternatively, an upside clearance of 21-day SMA, at 0.8860 now, will aim for the 0.8900 round-figure ahead of challenging December’s top surrounding 0.8920. However, a confluence of 50-day SMA and the monthly peak close to 0.8925-30 will be a strong resistance for the USD/CHF buyers to watch afterward. USD/CHF daily chart Trend: Further weakness expected  

EUR/USD is showing resilience to losses in stock markets, with investors eyeing key data releases, which are expected to show a continued expansion of

EUR/USD ekes out gains amid stock market losses. German PMI is likely to show continued expansion in the manufacturing sector. ECB's lack of direct criticism of EUR's strength leaves the door open for further rally.EUR/USD is showing resilience to losses in stock markets, with investors eyeing key data releases, which are expected to show a continued expansion of the manufacturing sector in Germany and across the Eurozone.  At press time, the pair is trading at session highs near 1.2175, representing a 0.12% gain on the day. The anti-risk greenback is struggling to draw bids, keeping  EUR/USD bid despite the 0.37% decline in the S&P 500 futures and the pullback in the major Asian stock market indices.  Expectations for generous US fiscal spending under Joe Biden's presidency look to be overshadowing the risk-off tone in stocks and keeping the dollar under pressure.  Focus on PMIs The preliminary German Manufacturing Purchasing Managers' Indices (PMI) is seen falling to 57.5 in January from December's 58.3. A reading above 50 indicates expansion.  In other words, the data, due for release at 08:30 GMT, is expected to show continued expansion in the activity despite the coronavirus-induced lockdown restrictions. The broader Eurozone PMI is forecast to paint a similar picture.  EUR/USD will likely extend gains if the data prints in line with estimates or beats expectations.  The European Central Bank's all talk and now walk approach on the exchange rate is another factor that favors a continued rise in the single currency. On Thursday, President Lagarde avoided any direct criticism of the currency, saying only that FX appreciation is a drag on inflation, as noted by BK Asset Management's Kathy Lien.  Apart from PMI figures, the new US President Joe Biden's speech at 19:45 GMT could inject volatility into the currency markets.  Technical levels  

Rally in the Asia-Pacific equities stall during early Friday as the coronavirus (COVID-19) worries challenge the previous expectations of the US aid p

Shares in Asia-Pacific fade the upside momentum as some of them correct from the record top.Global policymakers worry amid a jump in virus-led deaths despite strict activity restrictions.Aussie Retail Sales surprise with a drop, NZ Q4 CPI came in better than forecast and Japan’s CPI, PMI were mixed.Flash activity numbers, virus, fiscal package updates will be the key.Rally in the Asia-Pacific equities stall during early Friday as the coronavirus (COVID-19) worries challenge the previous expectations of the US aid package. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan drops 0.45% on a day whereas Japan’s Nikkei 225 follows the suit amid mixed prints of National Consumer Price Index (CPI) and Preliminary Jibun Bank Manufacturing PMI for December. It should be noted that Australia’s ASX 200 and stocks in China were also in the red as the Sino-American tension joins -4.7% YoY drop in Aussie Retail Sales for December, versus +7.2% prior. Also challenging the mood could be China SAFE comments suggesting challenges to further ease money and news marking the cost of Canberra-Beijing tussle. Indonesia’s IDX Composite becomes the biggest loser even as Bank Indonesia (BI) Governor Perry Warjiyo said “There is room for further policy rates cut.” On the contrary, New Zealand’s (NZ) NZX 50 gains over 1.0% to buck the trend after NZ CPI for the fourth quarter (Q4) rose past-0.0% forecast to 0.5% QoQ. Market mood initially cheered US Republicans’ willingness to work with President Joe Biden on his administration’s top priority, a $1.9 trillion aid package. However, the mood soured after Biden said the covid death could jump to 500,000 next month. Following that, the US Centers for Disease Control and Prevention (CDC) Director’s doubts over the availability of vaccines in the pharmacies versus promised earlier by the Trump administration also dragged down the risks. Furthermore, chatters over national border close in the UK and European policymakers’ readiness to inflate activity restrictions join The Times headlines suggesting Japan’s dropping of the Olympics to prints the risk-off mood. Read: Latest covid headlines in focus Amid these plays, US stock futures mark mild losses while 10-year Treasury yields pause recent upside near 1.10%. Further, commodities and antipodeans are also down even as the US dollar index (DXY) stays depressed for the fifth consecutive day. Read: S&P 500 Futures ease from record top as global policymakers fear covid infections Looking forward, investors will keep their eyes on the virus updates for fresh impulse while talks over the US stimulus and flash activity numbers from the developed economies can offer further direction.

The US Energy Information Administration (EIA) has revised the first-quarter price forecast for West Texas Intermediate (WTI) crude, the North America

The US Energy Information Administration (EIA) has revised the first-quarter price forecast for West Texas Intermediate (WTI) crude, the North American oil benchmark, higher to $56 from $50.  The bullish forecast is mainly based on expectations for a rebound in the global demand for petroleum liquids, according to oilprice.com.  Key points EIA expects global inventory draws will contribute to forecast rising crude oil prices in the first quarter of 2021.  While the EIA expects oil demand to rise in Q1, the recent rise in COVID-19 cases will continue to limit global oil demand in the first half of 2021. The US GDP to grow by 5.4% in 2021, leading to energy consumption growth. Global consumption of liquid fuels in 2021 is expected to average 97.8 million barrels per day this year.
 

Gold bounces off intraday low of $1,859.00 to $1,862.10, down 0.37% on a day, during early Friday. The yellow metal refreshed two-week high the previo

Gold extends previous day’s pullback to retest 50-day SMA, weekly support line.Bearish MACD, trend reversal suggesting candlestick favor sellers.Bulls can eye $1,900 beyond 21-day SMA, bears may aim for monthly low.Gold bounces off intraday low of $1,859.00 to $1,862.10, down 0.37% on a day, during early Friday. The yellow metal refreshed two-week high the previous day but failed to cross a 21-day SMA. The resulted moves portrayed a Doji candlestick on the daily (D1) chart, which in turn gained support from the bearish MACD signals to portray today’s downtick. However, gold sellers seem to struggle off-late as 50-day SMA and an upward sloping trend line from Monday limits immediate declines around $1,859. Considering the latest risk-off mood, coupled with Thursday’s Doji and bearish MACD, the bullion is expected to break the $1,859 support confluence, which in turn can direct the sellers toward $1,840. Read: Gold Price Analysis: XAU/USD bulls catch a breather above $1,850 amid virus woes Though, a horizontal area around $1,818 will question the commodity’s downside past-$1,840, if not then the monthly low near $1,802 and the $1,800 threshold will be in the spotlight. Meanwhile, a daily closing beyond the 21-day SMA level of $1,876 will attack the $1,900 round-figure before confronting the key hurdle around $1,965 comprising highs marked in November and January. Overall, the gold prices are likely to trim some of the latest gains but the overall uptrend is less likely to be affected. Gold daily chart Trend: Further declines expected  

One-month risk reversal on EUR/USD, a gauge of calls to puts on the shared currency, has recovered to -0.025, having hit an eight-month low of -0.632

One-month risk reversal on EUR/USD, a gauge of calls to puts on the shared currency, has recovered to -0.025, having hit an eight-month low of -0.632 on Jan. 18.  The metric's recovery to near-zero levels indicates that excess demand for puts relative to calls has fizzled out. In other words, the options market has shed the bearish bias.  EUR/USD is currently trading mostly unchanged on the day near 1.2170. The pair's pullback from the Jan. 6 high of 1.2349 ran out of steam near 1.2050 on Jan. 18.

“There is room for further policy rates cut,” Bank Indonesia (BI) Governor Perry Warjiyo said in a virtual seminar on Friday, adding that the central

“There is room for further policy rates cut,” Bank Indonesia (BI) Governor Perry Warjiyo said in a virtual seminar on Friday, adding that the central bank’s focus, however, is on getting the bank lending rates down first. Warjiyo said: "BI rates are already very low, but lending rates are not coming down yet, and demand is not rising yet. We are more focusing on solving this credit crunch." The central bank maintained its 7-day reverse repo rate at 3.75% at its January monetary policy meeting held on Thursday. After the policy announcement, the Governor said that the interest rate decision consistent with a low inflation outlook, external stability and effort to support the economy. Market reaction The Indonesian rupiah came under fresh selling pressure on the above comments, as USD/IDR bounced-off lows and regained the $14K mark. The spot was last seen trading at 14,030, adding 0.36% on a daily basis.

AUD/USD is currently trading near 0.7750, representing a 0.16% drop on the day, having rallied for the third straight day on Thursday. The losses seen

AUD/USD drops 0.16% on weak Aussie Retail Sales. The pair is still stuck in a two-week-long channel pattern.AUD/USD is currently trading near 0.7750, representing a 0.16% drop on the day, having rallied for the third straight day on Thursday.  The losses seen at press time could be associated with the dismal Aussie Retail Sales data released at 00:30 GMT, which showed consumer spending declined more than expected in December.  However, despite the AUD's weakness, the immediate technical bias remains neutral. That's because the pair is still trapped in a channel pattern represented by trendlines connecting Jan. 6 and Jan. 14 highs and  Jan. 11 and Jan. 18 lows.  A breakout would imply a continuation of the broader uptrend and shift risk in favor of a rally to 0.80. Alternatively, a channel breakdown would imply a bearish reversal.  Daily chartTrend: Neutral Technical levels  

Australia’s trade war with China could very well extend into 2021, as the tiff has cost the OZ economy only $3 billion in its commodities sales last y

Australia’s trade war with China could very well extend into 2021, as the tiff has cost the OZ economy only $3 billion in its commodities sales last year, suggesting a relatively small impact, Bloomberg reports, citing China Customs data. Key takeaways “That’s the value of Australian exports lost in 2020 compared to the prior year, and covers commodities from copper and coal to wine and lobsters that are now subject to trade restrictions by Beijing.” “Beijing’s trade reprisals have stopped short of targeting the commodities most crucial to its own economy -- iron ore and liquefied natural gas. They’re also Australia’s biggest earners.” China is Australia’s biggest trading partner and the diplomatic ties between the two nations have soured after Canberra barred Huawei Technologies Co. from its 5G network. Also, Australia strongly opposing China over the national security law in Hong Kong. Market reaction The aussie is under pressure so far this Friday, thanks to the downbeat Australian Retail Sales and broad US dollar rebound. At the press time, AUD/USD sheds 0.15% to trade at 0.7750.

With inflation expectations at multi-year highs, the US appears to be leading the so-called global reflation trade, which involves betting on price gr

With inflation expectations at multi-year highs, the US appears to be leading the so-called global reflation trade, which involves betting on price growth stimulated by fiscal or monetary policy.  The 5-Year, 5-Year forward inflation expectation rate rose to a three-year high of 2.4% on Thursday. The 10-year breakeven inflation rate also jumped to the highest since the first half of 2017.  Long-term expectations for price pressures have risen sharply in the past few weeks, with investors anticipating large fiscal spending under Joe Biden's Presidency.  While the US inflation expectations metrics have risen to the highest in three years, their Eurozone counterparts are yet to challenge highs seen in early 2020, as noted by market analysts.  Clearly, low inflation is not so much of an issue for the Federal Reserve, and the US dollar will likely draw bids if the Treasury yields track inflation expectations higher. 
 

“Current yuan exchange rate is within a reasonable and balanced range,” the State Administration of Foreign Exchange (SAFE), China’s fx regulator, sai

“Current yuan exchange rate is within a reasonable and balanced range,” the State Administration of Foreign Exchange (SAFE), China’s fx regulator, said in a statement on Friday.   more to come ...

The USD/JPY pair is struggling to penetrate the 5-day Simple Moving Average (SMA) hurdle for the second straight day. The pair is currently trading ne

USD/JPY is bid, but trades below the 5-day SMA. The pair remains stuck in a falling channel. The USD/JPY pair is struggling to penetrate the 5-day Simple Moving Average (SMA) hurdle for the second straight day.  The pair is currently trading near 103.55, having faced rejection at the descending 5-day SMA of 103.63 a few minutes ago.  A break above the SMA hurdle would expose the upper end of the falling channel represented by trendlines connecting Jan. 11 and Jan. 19 highs and Jan. 13 and Jan. 21 lows. The channel resistance is seen at 103.95 at press time.  A close higher would confirm a breakout and signal a continuation of the recovery rally from the Jan. 6 low of 102.59 and allow a re-test of 104.40 (Jan. 11 high).  On the downside, Thursday's low of 103.33 is the level to beat for the sellers.  Daily chartTrend: Neutral Technical levels  
 

Silver remains offered near the intraday low of $25.60, currently down 1.1% near $25.70, during Friday’s Asian session. In doing so, the white metal j

Silver stays heavy near recently flashed three-day low.100-bar SMA, multiple levels marked since late-December probe the bulls.200-bar SMA, weekly support lure the silver sellers.Silver remains offered near the intraday low of $25.60, currently down 1.1% near $25.70, during Friday’s Asian session. In doing so, the white metal justifies its pullback from the key $25.90-$26.00 resistance area while probing Wednesday’s low. Considering the quote’s sustained reversal from multiple highs and lows marked since December 27, as well as 100-bar SMA, coupled with the downward sloping RSI, silver prices are likely to remain pressured. However, a confluence of 200-bar SMA and an upward sloping trend line from Monday, near $25.53-48, will offer a tough fight to the commodity sellers. If at all the bullion bears dominate past-$25.48, the monthly low of $24.18 will should return to the charts. During the fall, the $25.00 can offer an intermediate halt. On the flip side, a clear run-up past-$26.00 will direct silver buyers toward a one-month-old horizontal resistance near $26.75. It should, however, be noted that the silver bull’s ability to conquer the $26.75 hurdle enables them to refresh the monthly peak beyond $27.92. Silver four-hour chart Trend: Pullback expected  

The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the fourth quarter of 2020 after NZ Stats released the o

The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the fourth quarter of 2020 after NZ Stats released the official consumer price index (CPI) early Friday. The gauge rose to 1.8% YoY in Q4. The inflation measures are closely watched by the RBNZ, which has a monetary policy goal of achieving 1% to 3% inflation. About the RBNZ Sectoral Factor Model Inflation The Reserve Bank of New Zealand has a set of models that produce core inflation estimates. The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach , estimating core inflation based on two sets of prices: prices of tradable items, which are those either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports. FX Implications The Kiwi dollar is running through fresh supply, as NZD/USD breaches the 0.7200 support. The spot drops 0.19% to trade at 0.7196, as of writing. NZD/USD Technical levels to watch  

RBNZ: To postpone publication of most statistical releases after hacking incident more to come ...

In lieu of the recent hacking incident, the Reserve Bank of New Zealand (RBNZ) said that it will be postponing the publication of most statistical releases after the hacking incident, in a statement released on Friday. Additional points “No data has been lost and no publications will be canceled.” “Expect the new system to become available in February.” more to come ...

S&P 500 Futures drop to 3,840, down 0.15% intraday, amid Friday’s Asian session. The risk barometer refreshed the record top before reversing from 3,8

S&P 500 Futures extend pullback from all-time high as risks dwindle.Biden fears jump in virus-led death, British diplomats push for border close.EU eyes stricter lockdowns, Japan is said to have canceled the Olympics.Flash PMIs from the UK, Europe and the US will decorate calendar, virus woes, stimulus updates become the key.S&P 500 Futures drop to 3,840, down 0.15% intraday, amid Friday’s Asian session. The risk barometer refreshed the record top before reversing from 3,859.62 the previous day. The pullback moves gained extra strength as politicians in the developed economies show fears of the coronavirus (COVID-19) spread and suggest further activity restrictions. Read: Wall Street Close: Stocks continue on path of least resistance, chalk up fresh ATHs again US President Joe Biden conveyed fears of a jump in the covid-led death toll to 500,000 next month to trigger the risk-off mood. The downbeat sentiment got a push from the US Centers for Disease Control and Prevention (CDC) Director’s doubts over the availability of vaccines in the pharmacies versus promised earlier by the Trump administration. Also on the negative side are chatters over the UK policymakers’ push for the total border closure amid a jump in the virus-led deaths. Furthermore, The Guardian’s statements suggesting the European Union (EU) policymakers’ struggle to tame the pandemic also weigh on the mood. “Angela Merkel has warned of the danger of a third wave from the new variants of coronavirus, as EU leaders drew up a blueprint that could lead to a ban on travelers from the UK and restrictions on movement across the bloc’s internal borders,” said the news. Read: Latest covid headlines in focus Elsewhere, The Times came out with the news suggesting that Japan government has privately concluded Tokyo Olympics will have to be canceled because of coronavirus. It should be noted that downbeat activity numbers from Japan and Aussie Retail Sales also dim the previous market optimism. Amid these plays, Japan’s Nikkei 225 and Australia’s ASX 200 print mild losses while the US 10-year Treasury yields also pause the earlier rise around 1.11% by press time. Moving on, global market players will wait for the preliminary readings of January’s activity numbers from the UK, the US and Europe for fresh impulse. However, risk catalysts are likely to remain sober and can disappoint commodities and equities.

The dollar index, which tracks the greenback's value against majors, defends the psychological support of 90.00 alongside moderate losses in the US st

The dollar index defends key support as risk rally stalls. The greenback's broader trend remains bearish as Fed taper unlikely anytime soon.A renewed rally in US Treasury yields could complicate matters for the dollar bears.The dollar index, which tracks the greenback's value against majors, defends the psychological support of 90.00 alongside moderate losses in the US stock futures.  At press time, the DXY is seen at 90.12, having printed alow of 90.04 during the overnight trade. The anti-risk greenback's descent has stalled as the 0.15% drop in the S&P 500 futures suggests a bull breather following a rally to record highs in the run-up to the US Presidential inauguration.  However, according to Guggenheim Partners' Chief Investment Officer Scott Minerd, the broader trend remains bearish, courtesy of Federal Reserve's open-ended asset purchase (QE) program. Expectations for general fiscal spending under Joe Biden's Presidency is also expected to keep the dollar on the offer.  What's more, the Federal Reserve recently squashed hopes of early QE taper. According to Bank of America, a reduced pace of asset purchases could still be a year away, depending on the evolution of US growth and inflation.  That said, if the impending fiscal spending lifts Treasury yields, the dollar will likely find bids. At press time, the 10-year yield is seen at 1.11%, having risen from 0.90% to 1.18% earlier this month.  Technical levels  

The world's coronavirus situation is detrimental to risk appetite and a series of headlines at the end of the week are concerning. The US reported its

The world's coronavirus situation is detrimental to risk appetite and a series of headlines at the end of the week are concerning. The US reported its second-highest daily death toll of the pandemic, even as hospitalizations continued to edge downward, offering a small sign of hope for health experts and officials. The US President Joe Biden has stated that the roll-out of vaccinations has been poor and that things will likely get worse before getting better, predicting that the death toll will top 500,000 next month.  The US recorded 4,375 deaths on Wednesday, according to a Wall Street Journal analysis of data compiled by Johns Hopkins University. The coronavirus vaccine won’t be widely available in US pharmacies by late February as previously promised, the new director of the Centers for Disease Control and Prevention said Thursday. “We are going to, as part of our plan, put the vaccine in pharmacies. Will it be in every pharmacy in this country by that timeline? I don’t think so,” Dr. Rochelle Walensky told the “Today Show.” Meanwhile, in the UK, the UK reported record numbers two days in a row, with 1,820 fatalities, the highest yet, reported on Wednesday. This has led UK government ministers to try to force Boris Johnson into closing Britain's borders to foreigners. A growing Cabinet row over how to prevent new variants of  the virus spreading to the UK is taking the market's focus. Across the Channel, the European Union leaders agreed that borders should remain open. The virus’ mutations are concerning and the 27 leaders have looked at further border restrictions like limits on all non-essential travel, better tracking of mutations and improving coordination of lockdowns. The leaders are assessing more measures to counter the spread of coronavirus variants during a video summit Thursday. The bloc’s top disease control official said urgent action was needed to stave off a new wave of hospitalizations and deaths. Meanwhile, in the latest headlines, Japan's vaccine programme chief has said that the nation will start coronavirus vaccination with Pfizer vaccines. Market implications The US dollar may continue to attract a bid if the sentiment flips, which brings the case for the dollar bullish on a number of levels.  On the other side of the coin, trade war sentiment and demand for US Treasuries coupled with inflationary expectations and a less dovish Fed leading to rising US yields could be the catalyst for a period of US dollar strength.  DXY monthly chart

NZD/USD drops to 0.7211 while consolidating recent gains during Friday’s Asian session. Even so, the kiwi pair marks 0.15% intraday upside, triggered

NZD/USD extends pullback from the recently refreshed one-week high of 0.7226Bullish MACD and successful trading above 100-bar SMA keep buyers hopeful.Immediate rising trend line, 200-bar SMA adds to the downside filters.NZD/USD drops to 0.7211 while consolidating recent gains during Friday’s Asian session. Even so, the kiwi pair marks 0.15% intraday upside, triggered mainly after New Zealand’s (NZ) upbeat fourth quarter (Q4) Consumer Price Index (CPI) data. Read: NZD/USD jumps above 0.7200 on strong New Zealand Q4 CPI Although the recent pullback eyes to revisit 100-bar SMA, at 0.7196 now, bullish MACD and sustained trading beyond an ascending trend line from Tuesday as well as 200-bar SMA favor the NZD/USD buyers. It should, however, be noted that a horizontal area comprising multiple highs marked since late-January 08, around 0.7240/45 restricts the quote’s short-term upside. As a result, NZD/USD traders should wait for a clear break of either 0.7196 or 0.7245 for fresh moves. While an upside break of 0.7245 will target the monthly high of 0.7316, the quote’s declines below 0.7196 will have to break the immediate support line, at 0.7163 now, followed by a 200-bar SMA level of 0.7148, to please sellers. Should NZD/USD bears keep the reins past-0.7148, the monthly’s low around 0.7096 should return to the chart. NZD/USD four-hour chart Trend: Pullback expected  

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4617 versus Thursday's fix at 6.4696.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.4617 versus Thursday's fix at 6.4696.

The price action in recent trade has been bullish and the bulls remain in control. The following is a technical analysis of the price structure betwee

NZD/JPY bulls take on the bear's commitments at a thick layer of resistance structure.There is a downside bias until bulls breach overhead resistance. The price action in recent trade has been bullish and the bulls remain in control. The following is a technical analysis of the price structure between the daily and 4-hour time frames from which swing traders can observe subsequent developments and determine their game plan.  Daily chart The daily bearish impulse was corrected in a significant Fibonacci retracement which has, in recent trade, penetrated beyond the 61.8% Fibonacci retracement level.  That being said, the bulls still have their work cut out given the amount of liquidity ahead. Sellers may well engage at this juncture and in force.  4-hour chart From a 4-hour perspective, the environment is, indeed, bullish.  However, if the first layer of resistance holds, then the downside is compelling, especially should the price fall below the 21-moving average.  A break of support and a restest of the structure would offer an optimal entry point for bears to engage in what would be expected to be a downside extension of the daily bearish impulse. 

EUR/USD defended the ascending (bullish) 50-day Simple Moving Average (SMA) support and broke higher from a falling wedge pattern earlier this week, s

EUR/USD trades near 1.2165 versus 1.2178 early today. The pair needs a quick move above 1.22 to avoid a head-and-shoulders pattern. EUR/USD defended the ascending (bullish) 50-day Simple Moving Average (SMA) support and broke higher from a falling wedge pattern earlier this week, signaling an end of the pullback from recent highs near 1.2350.  The recovery, however, looks to be losing steam in the 1.2180 neighborhood. A reversal lower from there would confirm the right shoulder of a head-and-shoulders (H&S) pattern on the 4-hour chart.  Acceptance under the potential H&S neckline at 1.2050 would put the bears back into the driver's seat and open the doors for a 300 pip move lower (target as per the measured move).  Alternatively, a quick move above the psychological level of 1.22 would validate the recent bounce from the 50-day SMA and weaken the case for the H&S pattern, possibly yielding a re-test of the monthly high of 1.2349.  4-hour chartTrend: Bullish above 1.22 Technical levels  

AUD/JPY takes a U-turn from the intraday to 80.44 to currently around 80.40, up 0.08% on the day, following Australia’s Retail Sales release during ea

AUD/JPY drops as Australia’s December Retail Sales surprises with -4.2% figures.Japan’s CPI for December recovered but preliminary reading of Jibun Bank Manufacturing PMI for January dropped.Market sentiment sours as virus fears spread amid policymakers in the US, Europe, the UK and Japan.AUD/JPY takes a U-turn from the intraday to 80.44 to currently around 80.40, up 0.08% on the day, following Australia’s Retail Sales release during early Friday. Also challenging the pair’s four-day uptrend is the recently cautious sentiment amid the coronavirus (COVID-19) worries. The preliminary readings of Australia’s Retail Sales dropped below +7.1% prior to -4.2% in December. In doing so, the key release marks the heaviest fall since June 2020. Read: Aussie Retail Sales arrives well below prior and estimates, AUD pressured Earlier in the day, Australia’s Commonwealth Bank released initial figures for Manufacturing, Services and Composite PMIs for December. The figures suggested Manufacturing PMI rose to 57.2 versus 55.9 forecasts while Services PMI eased from 57.4 expected to 55.8. Even so, the Composite PMI gained from 55.6 to 56.00. On the other hand, Japan also released December’s Consumer Price Index (CPI) and January’s preliminary data for Jibun Bank Manufacturing PMI. While the former recovered from -1.3% to -1.2% YoY, the later revisited the contraction area with 49.7 print versus 50.5 expected and 50.00 prior. Other than the data, risk catalysts also weigh on the AUD/JPY prices. Not only US President Joe Biden’s worries over the further worsening of covid conditions but the administration’s fear of not matching the previous government’s upbeat promises on vaccines also triggered the virus woes. Following that, the European policymakers' push for tough lockdown measures joins their British counterparts’ demand to close down the national boundaries to tame the virus infection probed the bulls. Also, The Times said, “Japan govt has privately concluded Tokyo Olympics will have to be canceled because of coronavirus”, which in turn exerts additional downside pressure on the risks. Amid these plays, S&P 500 Futures struggle for a clear direction near 3,850 after refreshing the record high the previous day. Further, stocks in Australia and Japan are mildly offered by press time. Looking forward, AUD/JPY traders will have to keep their eyes on the virus updates and US President Biden’s next moves for fresh impulse. Technical analysis Sustained trading beyond 21-day SMA, at 79.89 now, precedes the double bottom flashed around 79.55/50, to challenge AUD/JPY bears. Alternatively, a downward sloping trend line from January 08, currently around 80.75, lures the pair buyers.  

The weaker-than-expected Aussie Retail Sales data fail to elicit a bearish reaction from the Aussie dollar. AUD/USD remains flatlined near 0.7765. As

The weaker-than-expected Aussie Retail Sales data fail to elicit a bearish reaction from the Aussie dollar. AUD/USD remains flatlined near 0.7765.  As represented by Retail Sales, Australia's consumer spending rose fell by 4.2% month-on-month in December versus expectations for a 1.5% drop following November's 7.1% growth. The decline in consumer spending during the holiday season puts a question mark on the strength of the recovery from the coronavirus crisis and validates the Reserve Bank of Australia's dovish stance. So far, however, the AUD sellers have remained on the sidelines.  The data has come a day after the Australian Bureau of Statistics reported that the economy added 50K jobs in December, pushing the jobless rate down to a multi-month low of 6.6%. The Aussie dollar ticked higher on Thursday on the back of upbeat labor market data and continued demand for risk assets.  The S&P 500 marked new record highs on Thursday and the NASDAQ enjoyed strong gains on the back of outperformance across the tech sector, keeping the anti-risk US dollar under pressure.  The Federal Reserve has recently squashed talks of an early QE taper. Meanwhile, markets are expecting generous fiscal spending under Joe Biden's presidency. As such, the path of least resistance for AUD/USD appears to be on the higher side.  Analysts expect resistance on moves approaching 0.78 and 0.7820 with support intact on moves below 0.7650.  Technical levels  

Australia Dec preliminary retail sales -4.2% m/m s/adj (reuters poll -2.5%) - reuters news. More to come... Description of Australian Bureau of Statis

Australia December preliminary Retail Sales arrived at -4.2% MoMs/adj vs the Reuters poll -2.5%. More to come...         Description of Australian Bureau of Statistics The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it''s considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.  

Australia Retail Sales s.a. (MoM) down to -4.2% in December from previous 7.1%

Japan Jibun Bank Manufacturing PMI below forecasts (50.5) in January: Actual (49.7)

USD/CAD declines to 1.2642 while fading the corrective pullback from a fresh multi-month low during Friday’s Asian trading. Even so, the quote prints

USD/CAD eases from intraday high after refreshing the lowest levels since April 2018 the previous day.Ability to regain above short-term horizontal support, receding bearish bias of MACD favor further short-covering.200-bar SMA, weekly resistance line challenge buyers.USD/CAD declines to 1.2642 while fading the corrective pullback from a fresh multi-month low during Friday’s Asian trading. Even so, the quote prints 0.08% intraday gains and regains past-12-day-old horizontal support. Additionally, bearish MACD also seems to weaken, which in turn strengthens the odds of further recovery in the quote. As a result, USD/CAD buyers can target the weekly resistance line, at 1.2690 now, during the further upside. However, any more rise will have to battle the 1.2700 threshold and 200-bar SMA, currently around 1.2756, to probe the week’s high of 1.2799. Meanwhile, a downside break of 1.2625 will recall the sellers targeting the April 2018 bottom surrounding 1.2525. During the fall, the 1.2600 can act as a downside filter whereas the late-February 2018 low near 1.2450 can please the USD/CAD bears afterward. USD/CAD four-hour chart Trend: Pullback expected  

Following its failure to please the bulls, Gold eases to $1,869.70 during the initial Asian session on Friday. The yellow metal refreshed two-week top

Gold fades recovery moves from $1,858.43, stays near two-week top.Looming border close in Britain, rumors over Japan’s canceled Olympic and EU’s tough lockdowns probe the bulls.Biden administration turned down hopes of vaccine availabilities in the Pharmacies by February.Stimulus hopes favor the bulls but monthly PMIs will decorate the calendar.Following its failure to please the bulls, Gold eases to $1,869.70 during the initial Asian session on Friday. The yellow metal refreshed two-week top the previous day on stimulus hopes but the coronavirus (COVID-19) and downbeat data from the US, not to forget upbeat ECB, probes the bulls afterward. Not only downbeat comments from US President Joe Biden, concerning the virus, but the recently appointed US Centers for Disease Control and Prevention (CDC) Director’s doubts over the availability of vaccines in the pharmacies versus promised also signal the virus woes. On the other hand, European Leaders are jostling for further strict activity measures as The Guardian said, “Angela Merkel has warned of the danger of a third wave from the new variants of coronavirus, as EU leaders drew up a blueprint that could lead to a ban on travelers from the UK and restrictions on movement across the bloc’s internal borders.” Further, The Telegraph cites British policymakers push to UK PM Boris Johnson to close the national boundaries whereas The Times said, “Japan govt has privately concluded Tokyo Olympics will have to be canceled because of coronavirus.” Elsewhere, the incoming US Treasury Secretary Janet Yellen showed readiness to keep the pressure on China. Further, comments from the policymakers at the European Central Bank (ECB) and the Bank of Japan (BOJ) have been cautiously optimistic off-late. Against this backdrop, S&P 500 Futures drop 0.08% after refreshing the record top the previous day. Though, the US 10-year Treasury yields keep the upside momentum to 1.11% by press time. Looking forward, initial readings of January’s activity numbers from the US, the UK and Europe will be important to watch. Though, virus updates, Sino-American tension and Biden’s any fresh moves directly affecting the risk should be considered the main drivers. Technical analysis Thursday’s candlestick on the daily chart suggests range-bound trading to prevail between the 50-day and 21-day SMAs, respectively around $1,859.50 and $1,876.50. 100-day SMA near $1,883 adds to the upside barriers.  

United Kingdom GfK Consumer Confidence above expectations (-29) in January: Actual (-28)

Japan Consumer Price Index for December arrived aT 1.2% YoY vs the expected -1.3%. Japan National CPI Ex Fresh Food (Y/Y) Dec: -1% (est -1.1%, prev -0

Japan Consumer Price Index for December arrived aT 1.2% YoY vs the expected -1.3%. Japan National CPI Ex Fresh Food (Y/Y) Dec: -1% (est -1.1%, prev -0.9%) Japan National CPI Ex Fresh Food, Energy (Y/Y) Dec: -0.4% (est -0.4%, prev -0.3%) Description The National Consumer Price Index is released by the Statistics Bureau and it's a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. CPI is the most significant way to measure changes in purchasing trends. The purchase power of JPY is dragged down by inflation. Generally a high reading is seen as positive for the JPY.

Further to the following prior analysis, EUR/CHF Price Analysis: Bears to take advantage of the discount, bears have indeed engaged with the price act

EUR/CHF bears are engaging at 4-hour resistance with sights n a daily downside extension. The focus is on the demand territory, some 0.4% lower.  Further to the following prior analysis, EUR/CHF Price Analysis: Bears to take advantage of the discount, bears have indeed engaged with the price action as follows: 4-hour live market analysis As illustrated, the price has dropped below structure and engaged sellers on a restest of the newly formed resistance within a bearish environment. In addition, the extra conviction is supported by the head and shoulders bearish pattern.  Prior daily chart analysis In the prior analysis, the bearish forecast was based on a weekly M-formation and an overextended daily bearish trend that has corrected to a 61.8% Fibonacci level.  The expectations would be for a continuation of the downside into demand, some 0.4% lower, as illustrated in the above chart.  Live market  As illustrated, the daily chart is bearish with price capped by resistance and below dynamic trendline resistance also. 

Early Friday, the market sees the preliminary reading for the December month Retail Sales data from Australia at 00:30 GMT. Following successive two m

Retail Sales overview Early Friday, the market sees the preliminary reading for the December month Retail Sales data from Australia at 00:30 GMT. Following successive two months of recovery, recently by 7.1% YoY, AUD/USD traders fear a sober reading, some pessimists in the market also say -1.5%. Ahead of the release, TD Securities said, Retail sales are likely to remain robust in Dec, after the 7.1% m/m increase in Nov. To recap, we saw healthy sales in discretionary retail (14.3% m/m) in Nov as the economy reopens, and we expect the momentum to continue as consumers remain optimistic about the economic recovery. How could it affect AUD/USD? AUD/USD stays mildly bid around 0.7770, rising for the fourth consecutive day, by the press time of early Asian trading on Friday. The pair recently benefited from the upbeat prints of Australia’s preliminary readings of the Commonwealth Bank Manufacturing PMI for January, up 57.2 versus 55.9 prior. Also supporting the quote could be the cautious optimism in the markets after Joe Biden entered the White House as the 46th US President and easing virus-led restrictions in Australia, not to forget the previous day’s upbeat Aussie employment report for December. Although fears of a downtick in the Retail Sales can’t be ruled out, the overall sentiment is less likely to be hurt and hence can keep the AUD/USD pair positive despite slightly weaker data, if any. Alternatively, an extended rise in the Retail Sales number could keep the bulls happy. Technically, 21-day SMA near 0.7705, followed by lows marked since January 05 around 0.7658-65, seems to restrict the pair’s short-term downside. As a result, a descending resistance line from January 06, at 0.7800 now, lures AUD/USD bulls. Key Notes   AUD/USD: Bulls targeting 0.7800 aren’t out of the woods, Aussie Retail Sales in focus   AUD/USD Forecast: Chances still skewed to the upside About Australian Retail Sales The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it's considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.

Japan National CPI ex-Fresh Food (YoY) came in at -1%, above expectations (-1.1%) in December

Japan National CPI ex Food, Energy (YoY) came in at -0.4%, below expectations (-0.2%) in December

WTI eases to $53.01 during the initial Asian trading on Friday. Even so, the energy benchmark keeps the previous day’s bounce off 100 and 200-HMAs ins

WTI seesaws around $53.00 while staying above 100/200-HMA.Upbeat RSI conditions, sustained trading beyond the key moving averages favor buyers.WTI eases to $53.01 during the initial Asian trading on Friday. Even so, the energy benchmark keeps the previous day’s bounce off 100 and 200-HMAs inside a nine-day-old symmetrical triangle. Considering the upbeat RSI conditions and the quote’s ability to stay above important moving averages, WTI buyers are up for challenging the resistance line of the stated triangle, at $53.65. However, the $54.00 threshold and the February 2020 peak surrounding $54.70 are likely strong resistance to challenge the oil buyers. On the downside, a clear break below the key HMAs, currently around $52.85-80, could question the triangle support, at $52.05 now. Also acting as the short-term support is the $52.00 round-figure. In a case where the black gold drops below $52.00, sellers can eye for $51.30 and $51.00 ahead of the $50.00 psychological magnet and the monthly low near $47.25. WTI hourly chart Trend: Sideways  

Japan National Consumer Price Index (YoY) above forecasts (-1.3%) in December: Actual (-1.2%)

AUD/JPY is ripening for a downside extension in a series of bearish confluence across the time frames. Further to the prior analysis, AUD/JPY Price An

AUD/JPY bears lining up for an opportunity from a deep correction.Daily prospects are for an extension to the downside in a tiring bull short term market. AUD/JPY is ripening for a downside extension in a series of bearish confluence across the time frames. Further to the prior analysis, AUD/JPY Price Analysis: M-formation completed, bears lurking, a risk-on environment is enabling the bulls to squeeze out the last drops of upside, but the technicals are against the tide.  The following illustrates where the next downside opportunity will come from a break of 40hour structure that will open prospects for a downside extension of the latest bearish impulse.  For a re-cap, in the prior AUD/JPY Price Analysis: Bulls target daily resistance, the market had followed suit in accordance with the price action forecast as follows: The daily chart above and the 4-hour chart, below, are prior analysis in anticipation of a correction and discount for bears seeking a downside extension of the daily impulse. Daily charts On Wednesday, this was the state of play: We are now deep into the resistance: 4-hour chart The next move to the downside will need to break the current support structure to affirm the downside bias for the bears.

GBP/USD eases to 1.3730, after refreshing the multi-month high the previous day, during the early Asian session on Friday. The chatters over the UK po

GBP/USD bulls catch a breather as the quote gyrates near the upper end of immediate trading range.UK policymakers push PM Johnson for full closure of UK borders, EU policymakers also emphasize further strict activity restrictions.Biden administration fears worsening virus woes, delay in vaccinations but keep markets positive.UK Retail Sales and PMIs will decorate the calendar, virus and vaccine updates keep the driver’s seat.GBP/USD eases to 1.3730, after refreshing the multi-month high the previous day, during the early Asian session on Friday. The chatters over the UK policymakers’ push for the total border seal and worsening coronavirus (COVID-19) conditions in Britain seems to challenge the bulls off-late. However, the risk-on mood emanating from the new government in the US favor the quote’s upside momentum. However, the cable traders will keep their eyes on December’s Retail Sales and activity numbers for fresh impulse after the latest British inflation data favored optimists. The Telegraph is up for conveying the UK ministers’ push to Prime Minister (PM) Boris Johnson for full closure of UK borders. On the same line, The Sun reported, “Boris Johnson today warned it was ‘too early’ to say whether coronavirus restrictions are to be lifted before spring or even summer.” Further, Reuters also quotes UK’s Interior Minister Priti Patel as saying, “The advice is very clear we are in a lockdown, the public should be staying at home.” On the other hand, the European Union (EU) leaders are also jostling with the stricter lockdown. “Angela Merkel has warned of the danger of a third wave from the new variants of coronavirus, as EU leaders drew up a blueprint that could lead to a ban on travelers from the UK and restrictions on movement across the bloc’s internal borders,” said the Guardian. On the positive side, new data released by the UK’s National Health Services (NHS) England for the week ending 17 January, as conveyed by the Sky News, showed the East of England saw the number of first doses administered rise by 45%, the biggest among the regions compared to the preceding seven days. It’s worth mentioning that the US administration is also worried about the jump in the virus-led death toll and has recently turned down the Trump team’s claims of availing vaccines in the pharmacies by February-end. However, Joe Biden’s fiscal stimulus favors the market sentiment. Amid these plays, Wall Street benchmarks closed mixed while the US 10-year Treasury yields rose mildly to 1.10%. Looking forward, December’s UK Retail Sales, expected 4.0% YoY versus 2.4% prior, will be the key after recent improvement in the Consumer Price Index (CPI) data. Also, preliminary readings of January’s Manufacturing and Services PMIs, expected 47.9 and 54 versus 49.1 and 57.5 respective prior, will add to the watch list. Ahead of the release, Westpac said, “December retail sales will be hampered by lockdowns over the holiday period but spending has been resilient lately. Meanwhile, December public sector borrowing will remain elevated as the stimulus continues.” Technical analysis While multiple tops marked during January highlight the 1.3700 as the key immediate support, the weekly rising trend line near 1.3685 adds to the downside filter. Meanwhile, the 1.3800 lures GBP/USD bulls.  

The Dollar Index (DXY) came under further selling pressure on Thursday, dropping about 0.4% or just under 40 points to fall to fresh lows of the week

The DXY sold off again on Thursday, dropping below its 21DMA. The index has been under pressure since breaking below a key January uptrend. The Dollar Index (DXY) came under further selling pressure on Thursday, dropping about 0.4% or just under 40 points to fall to fresh lows of the week under 90.10. The trade-weighted basket of major USD exchange rates also dropped back below its 21-day moving average, which currently resides at 90.147. DXY breaking trendlines Some thought the trendline break of importance was the break above the downtrend linking the 7, 9 and 21 December and 11 January highs. The break of this trendline last Friday opened the door to a brief test attempt to move back to the 91.00 level, but this ultimately proved to be a fakeout. Within a day, the DXY was back below this downtrend and broke below another trendline that traders had been keeping an eye on; the uptrend linking the 6, 13 and 14 January lows. DXY even retested this uptrend on Thursday, practically to the tick. It proved to be the perfect classic break of a trend line, retest, then resume back in the breakout direction; the DXY has since dropped back towards the 90.00 level. A break below this psychologically important level, as well as last week’s 89.92 low, will open the door to a potential move back to annual and multi-year lows in the 89.20s. A break below that will open the door to further selling pressure and test of the 2018 low at 88.25. If DXY can break this level, that would put it at its lows since December 2014.DXY four hour chart

It was a subdued day on Wall Street, with most major stock indices finishing the session almost exactly where they begun it amid a lack of fresh macro

It was a subdued day on Wall Street, but all three major indices hit fresh all-time highs.The S&P 500 closed 0.11% higher, the Nasdaq Composite rose 0.56% and the Dow was flat.It was a subdued day on Wall Street, with most major stock indices finishing the session almost exactly where they begun it amid a lack of fresh macro catalysts. The S&P 500 closed 0.11% higher, the Nasdaq Composite rose 0.56% and the Dow was flat. All three hit intraday record highs.No particular news or theme can be easily attributed as being behind the day’s gains; market commentators continue to point vaguely at the themes of “stimulus hopes” and “vaccine optimism”, which in fairness are still both very relevant themes that will both likely drive further upside in risk assets (and perhaps downside in the US dollar) as long as they are accompanied by an accommodative Fed.US data appeared not to have much of an impact on broader economic sentiment; initial weekly jobless claims were not as bad as expected but still pretty ugly at 900K, Housing data showed the sector still on fire and one of the earliest indicators as to the performance of the manufacturing in January, the Philly Fed index, showed an improvement in the sector. Various analysts commented that the data combo underscores the K shaped economic recovery currently underway in the US; in other words, low wage service sector employees and the service sector more broadly is being absolutely devastated by the pandemic, while consumption shifts away from experiences and towards psychical goods, which underpins the manufacturing sector, and loose monetary policy pumps the housing market, further widening the gap between the economic haves and have nots. This dynamic ought to underscore the need for more fiscal and monetary stimulus in the eyes of the policymakers pulling the strings in the US right now. In terms of the sectoral breakdown; Tech did well, with Apple finishing the session up 3.7%, while chipmakers benefitted after Intel mistakenly released its Q4 earnings report before the close, which was solid. Energy stocks suffered, amid indecisive crude oil and energy markets and US President Joe Biden took decisive executive action against domestic US fossil fuel activities (Biden signed an order to halt the approval of new drilling permits and leases across US federal lands for 60 days).

AUD/NZD takes offers near 1.0755 while rewriting the weekly low during the initial Asian trading on Friday. The quote recently declined after New Zeal

AUD/NZD refreshes weekly low on better-than-expected New Zealand CPI data.MACD turns bearish, sustained trading below 200-HMA favor sellers.AUD/NZD takes offers near 1.0755 while rewriting the weekly low during the initial Asian trading on Friday. The quote recently declined after New Zealand (NZ) published fourth quarter (Q4) Consumer Price Index (CPI) data. Also favoring the sellers could be the pair’s sustained trading below 200-HMA and bearish MACD. NZ CPI jumped above 0.0% forecast to 0.5% QoQ while also printing 1.4% YoY figures versus 1.1% market consensus. As the key inflation figures ease pressure from the RBNZ to recheck their cautious optimism, the New Zealand dollar (NZD) responds with a jump in prices following the release. Read: NZ CPI: 1.4% YoY 0.5% QoQ, beats expectations, NZD/USD bid Technically, the quote stretched its U-turn from 200-HMA and breaks 50% Fibonacci retracement of January 07-19 upside, which in turn directs the sellers to a 61.8% Fibonacci retracement level of 1.0737. Should bears refrain from bouncing off the key Fibonacci retracement support, the 1.07000 threshold will flash on their radars. Meanwhile, an upside clearance of 200-HMA, at 1.0785 now, will recall the 1.0800 round-figure on the chart. However, multiple upside barriers around 1.0835/40 will challenge AUD/NZD bulls afterward. AUD/NZD hourly chart Trend: Bearish  

Australia Commonwealth Bank Composite PMI increased to 56 in January from previous 55.6

Australia Commonwealth Bank Services PMI registered at 55.8, below expectations (57.4) in January

Australia Commonwealth Bank Manufacturing PMI came in at 57.2, above expectations (55.9) in January

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