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Thứ sáu, Tháng một 24, 2020

The EUR/GBP cross dropped to fresh five-week lows on Friday, albeit showed some resilience below the 0.8400 round-figure mark and quickly recovered ar

EUR/GBP drops to fresh five-week lows and rebounds.Bulls showed some resilience below the 0.8400 level.The EUR/GBP cross dropped to fresh five-week lows on Friday, albeit showed some resilience below the 0.8400 round-figure mark and quickly recovered around 30-40 pips in the last hour. The mentioned handle marks 61.8% Fibonacci of the 0.8276-0.8602 recent move up and coincides with a descending trend-line, which should now act as a key pivotal point for short-term traders. The cross remains well below its important daily moving averages – 50, 100 and 200-day SMA and hence, some follow-through selling should pave the way for a further depreciating move. Moreover, technical indicators on the daily chart have been drifting lower in the negative territory and reinforce prospects for the resumption of the prior/well-established bearish trend. However, oscillators on the 4-hourly chart have been flashing oversold conditions, warranting some caution for aggressive traders and initiating any fresh bearish positions. Having said that, a sustained break below the 0.8400 mark might turn the cross vulnerable to slide back towards challenging mid-December swing lows – around the 0.8276 region. EUR/GBP daily chart  

The Organization of the Petroleum Exporting Countries (OPEC) and its allies are considering extending oil production cuts until the end of the year, R

The Organization of the Petroleum Exporting Countries (OPEC) and its allies are considering extending oil production cuts until the end of the year, Russian news agency TASS reported on Friday, citing sources familiar with the matter. "OPEC is unlikely to ease cuts in March as the market is still quite bearish," TASS reported."OPEC will meet in March, then in June." Market reaction Crude oil prices pulled away from daily lows on this headline and the barrel of West Texas Intermediate (WTI) was lat seen trading at $55.50, erasing 0.3% on a daily basis.

Analysts at Nordea Markets offered a quick review of Friday's mixed Eurozone PMI prints for January, which did not show much change in momentum at the

Analysts at Nordea Markets offered a quick review of Friday's mixed Eurozone PMI prints for January, which did not show much change in momentum at the start of the year. Key Quotes: “The euro area PMIs showed a mixed picture in January. The composite index stood unchanged at 50.9, below consensus. The various sectors and industries are sending mixed messages this month.” “The manufacturing index came in on the strong side of expectations, at 47.8. Nonetheless, the industry still clearly remains in contractionary territory but gives some signs of improvement as the decline of new work is slowing.” “The services index on the other hand actually deteriorated to 52.2 from 52.8 last month, against expectations, but still supports the view of a resilient service sector, keeping the economy afloat and driving job creation.” “Recent optimism around easing trade tensions after the phase one deal between China and the US reflected in financial markets did not take hold in this month’s PMIs. The threat of the US targeting the Euro area in its next trade war measures can put a damper on sentiment this year, but should not stand in the way of a gradual recovery.”

The bearish note around the shared currency remains well and sound at the end of the week and is now taking EUR/USD to the 1.1040 region. EUR/USD stay

EUR/USD fades the earlier uptick to 1.1060.Further downside exposes YTD lows near 1.1030.German, EMU flash PMIs surprised to the upside.The bearish note around the shared currency remains well and sound at the end of the week and is now taking EUR/USD to the 1.1040 region. EUR/USD stays close to YTD lows The pair keeps navigating the vicinity of 2020 lows around 1.1030 on Friday, quickly fading the earlier spike to daily highs around 1.1060 after advanced manufacturing PMI in Germany and the broader euro bloc are expected to come in above estimates for the month of January. EUR dropped further on Thursday in spite of the ECB left the monetary policy conditions unchanged and announced the start of the strategic review, which is expected to be focused on inflation, employment and climate change among the main topics. In the meantime, investors continue to closely follow the developments from the Chinese coronavirus and its potential impact on the global growth. In this regard, the WHO has recently decided not to call the outbreak an international alarm, although the decision could be revisited later today. Absent further publications/events in Euroland, the focus of attention will now shift to the US economy, where Markit will publish its manufacturing and services gauges later in the NA session. What to look for around EUR The pair remains under pressure near yearly lows in the 1.1050 region, always looking to USD-dynamics as the almost exclusive driver for the price action. In the meantime, headlines from the coronavirus outbreak in China keep driving the sentiment in the very near-term. On the broader picture, markets’ attention has now shifted to a more data-dependent stance, while the US-China trade front remains muted. On the more macro view, auspicious prints from flash PMIs in the core euro area were unable to change the mood around the euro, which remains on the offered side on the back of the renewed ‘wait-and-see’ stance from the central bank. EUR/USD levels to watch At the moment, the pair is retreating 0.10% at 1.1040 and a breakdown of 1.1036 (weekly/2020 low Jan.23) would target 1.0989 (low Nov.14 2019) en route to 1.0981 (monthly low Nov.29 2019). On the flip side, the next hurdle aligns at 1.1068 (100-day SMA) followed by 1.1131 (200-day SMA) and finally 1.1172 (weekly high Jan.16).

The GBP/USD pair faded an intraday bullish spike to fresh two-week tops, levels beyond mid-1.3100s, and has now retreated to the lower end of its dail

UK Manufacturing and Services PMI surpass market expectations.GBP/USD bulls failed to capitalize on the intraday positive move.The GBP/USD pair faded an intraday bullish spike to fresh two-week tops, levels beyond mid-1.3100s, and has now retreated to the lower end of its daily trading range. Following the previous session's modest pullback, the pair managed to regain some positive traction on the last day of the week and the uptick got a minor lift following the release of stronger-than-expected UK PMI prints. In fact, the flash version of the UK Manufacturing PMI for January moved closer to the expansion territory and came in at 49.8 as compared to a bounce to 48.9 expected and the previous month's final reading of 47.5. Adding to this, the preliminary UK Services PMI also bettered market expectations by printing 52.9 for January and prompted traders to scale back expectations of a BoE rate cut at its policy meeting next week. Despite the supporting factors, the pair failed to capitalize on the positive momentum, rather met with some aggressive supply at higher levels and quickly retreated around 45-50 pips over the past hour or so. It will now be interesting to see if the pair is able to attract any dip-buying at lower levels or the current pullback marks the end of the recent positive momentum and the resumption of the prior corrective slide. Technical levels to watch  

The European Central Bank’s (ECB) strategic review will not seek to alter the price stability goal, the ECB Governing Council member Olli Rehn said on

The European Central Bank’s (ECB) strategic review will not seek to alter the price stability goal, the ECB Governing Council member Olli Rehn said on Friday.

UK Manufacturing PMI jumps to 49.8 in January. UK Services PMI rises to 52.9 in January.

UK Manufacturing PMI jumps to 49.8 in January.UK Services PMI rises to 52.9 in January.The UK manufacturing sector activity rebounded sharply in January, the preliminary report from IHS Markit showed this Friday.  The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to a nine-month high of 49.8 in January versus 48.9 expected and 47.5 – December’s final reading. Meanwhile, the Flash UK Services Business Activity Index for January came in at a 16-month high of 52.9 versus December’s final readout of 50.0 and 51.0 expected.

United Kingdom Markit Services PMI came in at 52.9, above forecasts (51) in January

United Kingdom Markit Manufacturing PMI registered at 49.8 above expectations (48.9) in January

The European Central Bank (ECB) Governing Council member, Francois Villeroy de Galhau, is on the wires now, via Reuters, speaking at the World Economi

The European Central Bank (ECB) Governing Council member, Francois Villeroy de Galhau, is on the wires now, via Reuters, speaking at the World Economic Forum (WEF) in Davos. Key Quotes: There is some economic stabilisation in the Eurozone. Inflation goal must be symmetric, flexible, and credible. The EUR/USD pair ignores the above comments, as it continues to meander near daily lows of 1.1042 despite upbeat German and Eurozone Manufacturing PMI data.

In light of the recent performance in USD/JPY, FX Strategists at UOB Group suggested the pair now risks a move lower. Key Quotes 24-hour view: “USD mo

In light of the recent performance in USD/JPY, FX Strategists at UOB Group suggested the pair now risks a move lower. Key Quotes 24-hour view: “USD moved in line with our view of that “a sustained push below the strong support at 109.30 is not expected” with an overnight low of 109.25 followed by a strong rebound to close 109.49. For today, a sideways pattern is expected, between 109.15 and 109.70.” Next 1-3 weeks: “The breach of 109.45 (low: 109.25) overnight has indicated that the current USD strength has run its course and the risk now shifts to the downside. The next strong support is at 109.15 followed by the big figure 109.00 which is unlikely to come into the picture as yet. On the topside, immediate resistance is in the vicinity of overnight highs at 109.86 and only a further recovery above 110.00 would indicate that the current phase of weakness has ended.”

Gold edged lower through the early European session on Friday and is currently placed near daily lows, around the $1558 region. The precious metal con

Gold drifts lower through the early European session on Friday.Improving risk sentiment, stronger US bond yields/USD weighed.The set-up warrants some caution for aggressive bearish traders.Gold edged lower through the early European session on Friday and is currently placed near daily lows, around the $1558 region. The precious metal continued with its struggle to capitalize on the attempted positive move and once again met with some fresh supply near the $1568 region on Thursday. The pullback extended through the early part of Friday's trading action and was fueled by a combination of negative factors. Gold weighed down by a combination of factors A slight recovery in the global risk sentiment, as depicted by a positive trading bias around equity markets, weighed on the precious metal's safe-haven status. The risk-on mood was evident from a pickup in the US Treasury bond yields, which further drove flows away from the non-yielding yellow metal. Adding to this, the prevailing buying interest surrounding the US dollar also played its part in undermining demand for the dollar-denominated commodity. Despite the downtick, the commodity remained well within this week's broader trading range, warranting some caution for aggressive bearish traders. Moving ahead, market participants now look forward to Friday's US economic docket, highlighting the release of the flash version of the US Manufacturing and Services PMI, which might provide a fresh impetus and produce some short-term trading opportunities later during the early North-American session. Technical levels to watch  

Italy Trade Balance non-EU rose from previous €4.16B to €5.77B in December

The European Central Bank (ECB) released the results of its latest survey of professional forecasters, with the key highlights found below. 2020 infla

The European Central Bank (ECB) released the results of its latest survey of professional forecasters, with the key highlights found below. 2020 inflation seen at 1.2% vs. previously 1.2%) 2021 inflation seen at 1.4% (previously 1.4%) 2022 inflation seen at 1.5% 2020 real GDP growth seen at 1.1% (previously 1.0%) 2021 real GDP growth seen at 1.2% (previously 1.3%) 2022 real GDP growth seen at 1.4%

More to come ...

Eurozone Manufacturing PMI arrives at 47.8 in January vs. 46.8 expected.Eurozone Services PMI arrives at 52.2 in January vs. 52.8 expected. The Eurozone manufacturing sector activity showed an improvement this month but remained in the contraction territory, the latest manufacturing activity survey from IHS/Markit research showed on Friday. The Eurozone manufacturing purchasing managers index (PMI) came in at a five-month high of 47.8 in January vs. 46.8 expected and 46.3 last while the Services PMI dropped to a two-month low of 52.2 in the reported month vs. 52.8 expected and 52.8 last. The IHS Markit Eurozone PMI Composite steadied at 50.9 in January vs. 51.2 expected.

European Monetary Union Markit PMI Composite below expectations (51.2) in January: Actual (50.9)

European Monetary Union Markit Services PMI came in at 52.2, below expectations (52.8) in January

European Monetary Union Markit Manufacturing PMI came in at 47.8, above forecasts (46.8) in January

Technically speaking, we haven't hit effective lower bound on rates. But there are decreasing returns to further rate cuts. Strategy review an opportu

Technically speaking, we haven't hit effective lower bound on rates. But there are decreasing returns to further rate cuts. Strategy review an opportunity to close perception gap on inflation. ECB has underestimated communication with citizens previously.

Mitul Kotecha, Senior Emerging Markets Strategist at TD Securities, offers a strategy for trading the Asian currencies, in the face of the new China c

Mitul Kotecha, Senior Emerging Markets Strategist at TD Securities, offers a strategy for trading the Asian currencies, in the face of the new China coronavirus outbreak. Key Quotes: “The new coronavirus (2019-nCoV) is spreading quickly, leading to renewed fears of a repeat of SARS or worse.SARS peaked around 3-4 months after the initial outbreak was reported, but major travel over the Chinese New Year holidays could exacerbate the spread this time. We assess the economic and market impact of other viruses (SARS, Swine influenza, MERS, and Bird flu) to gauge the impact on markets of this virus. We find that the market and economic impact is likely to be short-lived, with the fear factor worse than reality. How to trade it: The defensive strategy is to be long USDKRW during the first two weeks of the outbreak, short CNH against EUR and JPY as the outbreak intensifies, and then short USDIDR and USDKRW as the fear factor fades.”

In opinion of Karen Jones, Team Head of FICC Technical Analysis at Commerzbank, Cable could still advance to the 1.3280 region. Key Quotes “GBP/USD he

In opinion of Karen Jones, Team Head of FICC Technical Analysis at Commerzbank, Cable could still advance to the 1.3280 region. Key Quotes “GBP/USD held steady holding on to recent gains and we will assume that there is scope for a deeper recovery to the 1.3285 Fibonacci retracement.” “The market should remain underpinned by the 1.2884 uptrend and the December low at 1.2908. Failure here would put the 200 day moving average at 1.2689 back on the plate.”

The EUR/JPY cross held on to its mildly positive tone above the 121.00 mark and refreshed session tops post-German PMI prints. The cross built on the

EUR/JPY builds on the overnight late rebound from 200-day SMA.Stronger German PMIs provided a modest lift to the shared currency.Fading safe-haven demand for the Japanese yen remained supportive.The EUR/JPY cross held on to its mildly positive tone above the 121.00 mark and refreshed session tops post-German PMI prints. The cross built on the previous session's late rebound from the very important 200-day SMA, or over two-week, and edged higher through the early European session on Friday. It is worth recalling that the cross extended its recent pullback from multi-month tops and lost some additional ground on Thursday following a dovish sounding ECB policy statement. The shared currency got a minor lift on the last trading day of the week following the release of stronger-than-expected German flash Manufacturing and Services PMI prints for January. In fact, the Manufacturing PMI, though remained in the contraction territory, improved to 45.2 during the reported month from November's final reading of 43.7 and 44.5 expected. Adding to this, the Services PMI also surpassed market expectations and came in at 54.2 for January as against consensus estimates pointing to an uptick to 53.0 from 52.9 previous. Apart from this, a modest recovery in the global risk sentiment – despite concerns about China's coronavirus outbreak – weighed on the Japanese yen's safe-haven status and remained supportive. It, however, remains to be seen if the cross is able to capitalize on the recovery move or meets with some fresh supply at higher levels as traders now eye the Eurozone PMI prints for a fresh impetus. Technical levels to watch  

Further decline in AUD/USD remains well on the cards, likely to sub-0.6820 levels according to FX Strategists at UOB Group. Key Quotes 24-hour view: “

Further decline in AUD/USD remains well on the cards, likely to sub-0.6820 levels according to FX Strategists at UOB Group. Key Quotes 24-hour view: “Our view of a ‘slight downside bias’ towards 0.6815 largely panned out yesterday with AUD eking out a low of 0.6829. That said, indicators are mixed and a sideways pattern looks more likely rather than further declines. On the downside, look for 0.6820 to support while rallies are limited to 0.6865.” Next 1-3 weeks: “While AUD breached 0.6849 yesterday (21 Jan), the price action lacks ‘spark’ and downward momentum has not improved by much. That said, the odds for AUD to move below 0.6820 have increased even though there is another solid support at 0.6790. Taking a step back, we have viewed the price action in AUD since early as ‘part of a corrective pullback and not a major reversal’. The pullback appears to be over-extended and for now, a clear break of 0.6790 would come as a surprise. All in, AUD is expected to stay on the back foot unless it can reclaim 0.6900 (‘strong resistance’ level was at 0.6935 previously).”

According to flash figures from CME Group, open interest shrunk by nearly 5.3K contracts on Thursday. Volume, instead, went up by almost 238K contract

According to flash figures from CME Group, open interest shrunk by nearly 5.3K contracts on Thursday. Volume, instead, went up by almost 238K contracts, extended the erratic performance. WTI looks supported around $55.50 so far Prices of the WTI managed to rebound from 2-month lows in the mid-$55.00s on Thursday amidst shrinking open interest and choppy activity in volume. That said, the commodity could now attempt a relief rally to the next target at the 200-day SMA around $57.50.

German Manufacturing PMI arrives at 45.2 in January vs. 44.5 expected. German Services PMI stands at 54.2 in January vs. 52.9 expected. More to come

German Manufacturing PMI arrives at 45.2 in January vs. 44.5 expected.German Services PMI stands at 54.2 in January vs. 52.9 expected. The German manufacturing sector contraction slowed more 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 45.2 versus 44.5 expected and 43.7 previous, hitting a new eleven-month high. Meanwhile, Services PMI hit a five-month high level of 54.2 in Jan as against previous months reading of 52.9 and 53.0 anticipated. The IHS Markit Flash Germany Composite Output Index jumped to a five-month high of 51.1 in January at 49.4 vs. 50.5 expectations. 

Germany Markit Services PMI above expectations (53) in January: Actual (54.2)

Germany Markit Manufacturing PMI came in at 45.2, above expectations (44.5) in January

Germany Markit PMI Composite above expectations (50.5) in January: Actual (51.1)

France Markit PMI Composite below expectations (52) in January: Actual (51.5)

France Markit Services PMI came in at 51.7 below forecasts (52.2) in January

France Markit Manufacturing PMI above expectations (50.6) in January: Actual (51)

According to economists at Standard Chartered Bank the Indian central bank (RBI) is likely to stay put on rates in February, maintain its accommodativ

According to economists at Standard Chartered Bank the Indian central bank (RBI) is likely to stay put on rates in February, maintain its accommodative stance and stay data-dependent. Key Quotes: “While we expect headline CPI inflation to fall to c.6% by February 2020 – December CPI inflation of 7.35% was above the Monetary Policy Committee’s (MPC’s) mandated CPI inflation band of 4%+/-2ppt – H1-FY21 average CPI inflation is likely to be c.4.40%. Price pressure should soften by H2-FY21 as CPI inflation is likely to average 3.2%, below the MPC's inflation target. We therefore shift our call for a rate cut of 25bps to the August MPC meeting, from June previously.” “We maintain our call for a cumulative 40bps of rate cuts in FY21 for now (including 25bps in August). We await more clarity on the persistence of price pressures and the economic recovery. However, we acknowledge the risk of smaller cuts or a prolonged pause on rates if price pressures persist in FY21, despite a subdued growth recovery.”

Analysts at Nordea Markets offered a brief preview of the upcoming FOMC policy decision and expect the Fed to be on hold and reiterate its data depend

Analysts at Nordea Markets offered a brief preview of the upcoming FOMC policy decision and expect the Fed to be on hold and reiterate its data dependence. Key Quotes: “The overall tone of the meeting will probably be close to the December meeting, where the FOMC said it sees the economy being in a good place and that the uncertainties related to the trade war and Brexit have faded.” “Still, the Fed will not yet declare complete victory against external uncertainties by saying that risks are skewed to the downside. The “Fed put” is not dead.” “The strong downward signal from leading indicators is also why stick to our forecast of another rate cut in March. Admittedly, however, our forecast looks a bit stretched, as FOMC members have not sent that dovish signals lately while markets also do note price in a cut.” “For our March cut to materialize, we would need to see some bad upcoming macro data in particular ISM Non-Manufacturing / nonfarm payrolls or financial conditions tightening too much.” “As Powell will likely signal that the Fed is in a wait-and-see mode, the market reaction related to the “pure” monetary policy outlook should be muted. If anything, however, we see risks tilted towards lower yields as Powell will probably keep the “Fed put” alive, while markets price in a (too) low probability of easing in H1 2020, in our view.”

Austria Industrial Production (YoY) fell from previous -1% to -2.1% in November

The USD/JPY pair edged higher on the last trading day of the week and moved further away from two-week lows set in the previous session. The pair exte

USD/JPY looks to build on the overnight bounce from two-week lows.Improving risk sentiment, a modest USD uptick remained supportive.The upside remains capped amid concerns over China’s coronavirus.The USD/JPY pair edged higher on the last trading day of the week and moved further away from two-week lows set in the previous session. The pair extended its recent retracement slide from multi-month tops and witnessed some follow-through weakness for the third consecutive session on Thursday. Concerns over China's coronavirus outbreak continued benefitting the Japanese yen's perceived safe-haven status and turned out to be one of the key factors behind the pair's ongoing slide. Bulls refrain from placing aggressive bets The pair, however, managed to find some support ahead of 50-day SMA and a combination of factors provided an additional lift during the Asian session on Friday. A slight improvement in the global risk sentiment allowed the US Treasury bond yields to gain some positive traction, which eventually underpinned the US dollar demand and led to the pair's modest uptick. On the economic data front, Japan's core consumer price index (CPI) rose 0.7% YoY in December as compared to a 0.5% rise in the previous month. Meanwhile, the headline CPI rose 0.8% and surpassed forecast of 0.4% by a big margin. Adding to this, the flash version of the Japanese Manufacturing PMI also bettered market expectations and kept a lid on the pair's attempted recovery. Moving ahead, the broader market risk sentiment and the USD price dynamics might continue to play a key role in influencing the pair's momentum on Friday. Later during the early North-American session, the release of flash US Manufacturing and Services PMI will also be looked upon to grab some short-term trading opportunities. Technical levels to watch  

GBP/USD is looking for s new direction as speculation about the upcoming Bank of England decision rocks the pound. How is the currency pair positioned

GBP/USD is looking for s new direction as speculation about the upcoming Bank of England decision rocks the pound. How is the currency pair positioned?   The Technical Confluences Indicator is showing that pound/dollar is capped at 1.3134, which is the convergence of the Simple Moving Average 5-15m, the SMA 10-4h, the Fibonacci 61.8% one-day, the Fibonacci 61.8% one-month, and more. Support is somewhat weaker. At 1.3100, the confluence of the Pivot Point one-day Support 1, the previous daily low, and the SMA 200-4h is seen. The upside target is 1.3223, which is the meeting point of the Bollinger Band one-day Upper and the Fibonacci 161.8% one-week. Looking down, support awaits at 1.3058, which is where the 50-day SMA and the Fibonacci 61.8% one-week converge.  This is how it looks on the tool: Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas. Learn more about Technical Confluence

The first Preliminary readings of the UK Manufacturing and Services PMIs are due for release today at 0930GMT. The Preliminary UK Manufacturing PMI is

The UK PMIs overview The first Preliminary readings of the UK Manufacturing and Services PMIs are due for release today at 0930GMT. The Preliminary UK Manufacturing PMI is expected to show that the pace of contraction in the activity slowed in January after the PMI hit a four-month low in December. The index is expected to arrive at 48.9 versus 47.5 last. Meanwhile, the flash UK Services PMI is expected to rise to 51.0 in January vs. 50.0 booked in December. How could they affect GBP/USD? The Cable broke the Asian consolidation phase to the upside and reached a fresh daily high at 1.3139 in the last hours, as markets cheer the latest media reports that the UK is likely to clinch its first post-Brexit trade deal with Japan. The immediate focus now shifts towards the UK Manufacturing PMI data release. Should the data surprise markets to the downside, it would bolster BOE rate cut expectations and knock-off the spot back below 1.3100, below the next supports are aligned at 1.3057 (50-DMA) and 1.3034 (Jan 22 low). However, on upbeat readings, the GBP/USD pair could take-out the key 1.3154/55 resistance, above which 1.3170 (Jan 8 high) could be tested en route 1.3200 (round number). Key Notes GBP/USD: Rising bets for a move higher – UOB GBP Futures: Upside momentum looks exhausted Looking for some PMI relief About the UK PMIs The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and 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 UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish. The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does.   

Here is what you need to know on Friday, January 24: Coronavirus: While the number of cases continues rising and China canceled several New Year's cel

Here is what you need to know on Friday, January 24: Coronavirus: While the number of cases continues rising and China canceled several New Year's celebrations, the market mood has calmed. One of the reasons for the relative ease comes from the World Health Organization, which refrained from declaring a global emergency. USD/JPY is off the lows and gold prices have stabilized.EUR/USD is stabilizing after suffering from the European Central Bank's lack of enthusiasm about the recent upbeat economic figures. President Christine Lagarde announced the launch of a strategic review, set to conclude by year-end. The focus now shifts to Markit's forward-looking Purchasing Managers' Indexes for January.  See Eurozone PMIs preview: Upbeat expectations seem justified, opening the door for EUR/USD gainsItaly: Regional elections in Emiglia Romana over the weekend are seen as a test for the stability of the government, which is already vulnerable after Luigi di Maio stepped down from leading the Five-Star Movement.PMIs are also eyed in the UK. After last week's inflation, retail sales, and Gross Domestic Product missed expectations, this week's jobs report and other statistics were positive. The fresh post-election surveys could be the tipping point for the Bank of England's decision next week. GBP/USD has managed to hold its ground despite USD strength. See UK PMIs preview: Cementing the BOE rate cut? Five GBP/USD scenariosCanadian retail sales figures for November are forecast to show a bounce after falling in November. The loonie was hit earlier this week by the Bank of Canada, which expressed concern about recent economic developments and opened the door to cutting rates.The New Zealand dollar remains bid after the quarterly Consumer Price Index beat expectations with 0.5%.  The improved market mood also supports NZD/USD.Oil prices found their feet after oil inventories data surprised with a smaller-than-expected drawdown. The coronavirus scare continues capping crude prices. Cryptocurrencies are on the back foot, with Bitcoin trading below $8,400.   

The AUD/USD pair lacked any firm directional bias on Friday and remained well within the striking distance of over one-month lows set earlier this wee

AUD/USD on Thursday was rejected near the very important 200-DMA.Concerns over the outbreak of coronavirus benefitted the greenback.Traders now look forward to the US flash PMI prints for some impetus.The AUD/USD pair lacked any firm directional bias on Friday and remained well within the striking distance of over one-month lows set earlier this week. The pair on Thursday failed to capitalize on its goodish intraday positive move – led by stronger Australian employment details – and once again faced rejection near the very important 200-day SMA. Aussie struggles to register any meaningful recovery Concerns over China's coronavirus outbreak benefitted the US dollar's perceived safe-haven and turned out to be one of the key factors that prompted some selling around the China-proxy Australian dollar. The greenback was further supported by the post-ECB weakness in the shared currency and a modest pickup in the US Treasury bond yields during the Asian session on the last trading day of the week. Meanwhile, a slightly positive tone around equity markets extended some support to perceived riskier currencies – like the aussie – and helped limit deeper losses, at least for the time being. Moving ahead, market participants now look forward to Friday's thin US economic docket – featuring the release of flash US Manufacturing and Services PMIs – for some short-term impetus. Technical levels to watch  

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

German/ Eurozone flash PMIs Overview Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of its impact on the European currency and the related markets as well. The flash manufacturing PMI for Germany, due at 0830 GMT, is seen arriving at 44.5 in January, up from December’s 43.7 final print while the index for the services sector is seen a tad firmer at 53.0 this month vs. 52.9 last. The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 46.8 for January vs. 46.3 seen in the previous month. The Eurozone services sector PMI is seen steady at 52.8 in the reported month. How could they affect EUR/USD? On a downside surprise, the spot could meet fresh supply and fall back to test the post-ECB policy decision lows at 1.1036, a break below which could open floors towards the December 2019 lows of 1.1003. Selling pressure will intensify should the bulls fail to defend the last, exposing the November lows of 1.0981. Should the data better estimates, the rates could bounce back towards the 100-DMA at 1.1072, above which the next upside target awaits at 1.1102, the confluence of 10 and 50-DMA. At the press time, the EUR/USD pair is seen hovering around 1.1050, almost unchanged on the day. Key Notes Eurozone PMIs preview: Upbeat expectations seem justified, opening the door for EUR/USD gains ECB’s Lagarde: To think that policy is on auto-pilot is ridiculous EUR Futures: Door open for extra losses 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.

Traders added almost 10.5K contracts to their open interest positions on Thursday, reversing two drops in a row, as per advanced prints from CME Group

Traders added almost 10.5K contracts to their open interest positions on Thursday, reversing two drops in a row, as per advanced prints from CME Group. In the same direction, volume partially offset the previous drop and increased by around 70.5K contracts. Gold expected to move higher on safe haven demand News from the Wuhan coronavirus continues to drive the price action in the ounce troy of Gold, at least in the very near-term. Thursday’s uptick was reinforced by open interest and volume, leaving the scenario ripe for the continuation of the upside.

Following the recent price action, the pair’s focus seems to have now shifted to the 1.0980 zone, noted Karen Jones, Team Head FICC Technical Analysis

Following the recent price action, the pair’s focus seems to have now shifted to the 1.0980 zone, noted Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank. Key Quotes “EUR/USD has eroded the 3 month uptrend. The intraday Elliott wave signals remain slightly negative and this leaves attention on the downside to initially the 1.0981 29th November low. More importantly it has neutralised our bullish bias and forced us once again to the sidelines.” “Overhead the market is facing tough resistance at 1.1184-1.1240 – namely the 55 week ma, the 2019-2020 down channel and the recent high. This guards the 200 week ma at 1.1359, which continues to represent a critical break point medium term.”

Cable is still expected to tackle the 1.3200 mark and beyond in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Although

Cable is still expected to tackle the 1.3200 mark and beyond in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Although GBP did not ‘take on’ 1.3170 as thought yesterday, it is still largely supported above 1.3100. The strong rally in the last couple of days has probably transited into consolidation. Expected range is between 1.3050 and 1.3190. Only with a move below 1.3010 would indicate that the up-move is over.” Next 1-3 weeks: “Our last rhetoric was that “downward pressure has eased but there is still a slim chance that GBP could dip below 1.2955”. GBP continued to recover strongly and touched a high of 1.3153 overnight. An improving upside momentum, if sustained, could bring GBP higher towards 1.3220. On the downside, support is at 1.3000 and only a further move to 1.2960 would indicate that GBP has moved back into a sideway trading phase.”  

Open interest retreated for the second consecutive day on Thursday, this time by around 5.8K contracts, according to flash data from CME Group. On the

Open interest retreated for the second consecutive day on Thursday, this time by around 5.8K contracts, according to flash data from CME Group. On the other hand, volume reversed the previous drop and went up by nearly 64.5K contracts. USD/JPY sees the downside contained above 109.00USD/JPY’s pullback on Thursday was amidst declining open interest in the Japanese safe haven, which signals diminishing odds for a deeper retracement. That said, the spot is expected to resume the upside and retake the 110.00 neighbourhood and above in the near-term. On the downside, the 55-day SMA in the 109.10 region is seen offering a tough support.

ECB’s Lagarde: To think that policy is on auto-pilot is ridiculous More to come ...

ECB’s Lagarde: To think that policy is on auto-pilot is ridiculousMore to come ...

FX option expiries for Jan 24 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 1.1bn - GBP/USD: GBP amounts 1

FX option expiries for Jan 24 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 1.1bn - GBP/USD: GBP amounts 1.3000 255m 1.3100 557m 1.3150 481m 1.3200 219m 1.3250 239m - USD/CAD: USD amounts 1.3150 610m

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, suggested the pair could attempt a move to the 0.9760 region and even surpass

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, suggested the pair could attempt a move to the 0.9760 region and even surpass 0.9800. Key Quotes “USD/CHF has eroded its two month downtrend line but not sustained the break and is consolidating. We remain unable to rule out a deeper recovery towards the .9762 10th January peak and possibly the 55 day ma at .9812. Dips will find minor support at .9660.” “Key resistance remains .9841/44, the September and October lows and while capped here we will maintain an overall negative bias.”

In its latest credit assessment report on Indonesia, Fitch Ratings affirmed Indonesia’s sovereign credit rating at ‘BBB’ while maintaining a ‘Stable’

In its latest credit assessment report on Indonesia, Fitch Ratings affirmed Indonesia’s sovereign credit rating at ‘BBB’ while maintaining a ‘Stable’ outlook. Indonesia's GDP growth is likely to remain resilient in the next few years, Fitch added in its report. Separately, Bank Indonesia’s Governor Warijyo was reported, as saying that inflation in the first four weeks of January seen at 2.82% YoY. At the press time, USD/IDR trades close to a new 23-month low reached at 13,570 in the last hour. USD/IDR Price Analysis: Ignores Thursday’s Doji, breaks multi-month-old support line

According to FX Strategists at UOB Group, further declines in EUR/USD should meet solid contention in the 1.1030 region. Key Quotes 24-hour view: “EUR

According to FX Strategists at UOB Group, further declines in EUR/USD should meet solid contention in the 1.1030 region. Key Quotes 24-hour view: “EUR surprised with a drop to as low as 1.1035 overnight, vs our view of ‘a sustained decline below 1.1065 is unlikely’. With the impulsive move, EUR is vulnerable to further losses. Until we see a recovery above 1.1080 (a key resistance), further declines to the key support of 1.1000 cannot be dismissed. Before 1.1000, strong support is already seen at 1.1030.” Next 1-3 weeks: “While EUR has dipped below the strong 1.1065 support overnight, the current weakness is not viewed as part of a trending down-move and the next support at 1.1030 is likely strong enough to hold any further decline. Taking a step back, we have noted on 03 Jan that EUR “is likely in the early stages of a corrective pullback”. From here, the pullback has room to extend lower but lackluster momentum suggests EUR could stabilize ahead of 1.1030. Only a clear break of 1.1030 would increase the risk of a more sustained decline. On the upside, a move above 1.1150 (no change in ‘strong resistance’ level) would suggest the current weakness has stabilized.”

CME Group’s advanced figures showed investors added just 383 contracts to their open interest positions on Thursday, reaching the second build in a ro

CME Group’s advanced figures showed investors added just 383 contracts to their open interest positions on Thursday, reaching the second build in a row. Volume, instead, shrunk for the second consecutive session, this time by around 39.5K contracts. GBP/USD seems ready for a correctionCable closed in red figures on Thursday after testing once again the 1.3150 region. The negative price action was in tandem with rising open interest, hinting at the likeliness that a deeper retracement could be on its way.

The market mood remained fragile in Friday’s Asian trading, as a sense of caution prevailed amid concerns over the rapid spread of the China coronavir

The market mood remained fragile in Friday’s Asian trading, as a sense of caution prevailed amid concerns over the rapid spread of the China coronavirus outbreak globally, despite the Chinese authorities extending their containment efforts. Media reports hit the wires, citing fresh coronavirus cases reported in China, South Korea, Australia and the US. The World Health Organization (WHO), however, refrained from declaring it as a global emergency on Thursday. The Asian equities traded mixed amid the virus concerns and slowing volumes, as the financial markets in China, Taiwan, South Korea and Indonesia were closed for the Lunar New Year holiday. The S&P 500 futures posted small gains while the US Treasury yields returned to the green zone, which somewhat buoyed the sentiment around the US dollar. Meanwhile, most fx majors traded in tight trading ranges, with the USD/JPY pair stuck in range around the 109.50 level, divided between upbeat Japanese CPI, cautious sentiment and positive Wall Street futures. The Aussie’s rebound was capped near 0.6850 while the Kiwi hit a new four-day high near 0.6625, in the wake of above-forecasts New Zealand’s inflation data. USD/CAD traded listless around 1.3125, with the upside capped by the rebound in oil prices. Meanwhile, gold prices remained under pressure below $1560 levels. Among the European currencies, EUR/USD remained on the defensive around 1.1050 after downbeat remarks from the European Central Bank (ECB) Chief Lagarde during the post-monetary policy meeting press conference. The cable held steady above the 1.31 level heading into the key events risks in the European session. Main Topics in Asia US Pres. Trump: White House Middle East peace plan is a great plan Japanese CPI Dec: 0.8% YoY vs 0.4% expected BoJ Minutes: Most members agreed it is appropriate to continue easing consistently UK to strike first post-Brexit trade deal with Japan, dubbed as EU++ - The Sun Total number of confirmed coronavirus cases in China at 830 as of Jan 23 - State media 105 new cases of Wuhan coronavirus confirmed in Hubei - Global Times RBNZ Q4 Sectoral Factor Model Inflation Index rises by 1.8% YoY, Kiwi hits four-day highs Incoming BOE Governor Bailey: UK badly prepared for market crash Coronavirus spreads globally, China continues containment efforts US Official: US Pres. Trump to sign USMCA trade deal Wednesday at White House Turkish FinMin Albayrak: Lira “looks competitive” at 5.7-5.9 against US dollar – Nikkei S&P warns coronavirus threatens to dent China’s new growth driver – Bloomberg Key Focus Ahead        Fresh trading momentum could gather pace in the session ahead after a quiet Asian affair, as markets brace for the key preliminary Markit Manufacturing PMI readings from the across the Euro area as well from the UK. The bloc’s PMIs will start trickling from 0815 GMT and could emerge a key driver for the euro in the coming days. Meanwhile, the UK activity numbers (due at 0930 GMT) will be closely watched heading into next week’s Bank of England’s (BOE) policy decision. Also, of note remains the speech by the ECB President Lagarde scheduled at 1030 GMT. Lagarde is due to participate in a panel discussion titled "Global Economic Outlook" at the 2020 World Economic Forum, in Davos. The NA session is also an eventful one, with the Canadian Retail Sales data to kick-off the calendar at 1330 GMT. In the American mid-morning, Markit’s Preliminary Manufacturing and Services PMI reports for the US are lined up for release at 1445 GMT. Markets will also look forward to the Baker Hughes US Oil Rig Count data, dropping in at 1800 GMT. Besides, China coronavirus spread-related developments are likely to remain the main market driver in the day ahead. EUR/USD: Fiber has lost its upward trajectory, eyes PMIs and Lagarde speech EUR/USD is on the defensive, having dived out of key ascending trendline. ECB President Lagarde on Thursday said risks to the outlook remain on the downside. German and Eurozone PMIs will likely guide the price action on Friday.  GBP/USD: Mildly bid above 1.3100 ahead of the key PMIs GBP/USD gradually recovers Thursday’s losses as it takes the bids around 1.3125 ahead of the London open. The pair might have benefited from the EU-UK trade positive headlines but market players are waiting for the UK January preliminary PMIs for fresh impulse. Eurozone PMIs preview: Upbeat expectations seem justified, opening the door for EUR/USD gains Markit's preliminary PMIs for January are set to show a modest improvement. EUR/USD is expected to react strongly to any outcome. Key economic events in the week ahead - ANZ The FX Strategists at Australia and New Zealand Banking Group (ANZ) provide brief insights into the key event risks due on the cards next week.  

Enrico Tanuwidjaja, Economist at UOB Group, assessed the recent decision by the Bank Indonesia (BI) to leave the interest rates unchanged at its Janua

Enrico Tanuwidjaja, Economist at UOB Group, assessed the recent decision by the Bank Indonesia (BI) to leave the interest rates unchanged at its January meeting. Key Quotes “At the January 2020 monetary policy meeting (MPC), Bank Indonesia (BI) decided to keep its7- day Reverse Repo Rate unchanged at 5.00%., It also maintained the Deposit Facility rate at 4.25%and the Lending Facility rate at 5.75%. BI reiterated that the monetary policy will remain accommodative; consistent with low inflation expectations, maintained external stability, and efforts to support the domestic economic growth.” “BI forecasts that the full year 2019’s GDP growth is likely to be around 5.1% before accelerating towards the 5.1%-5.5% range for 2020; underpinned by exports recovery (commodity price picked up and higher demand from Indonesia’s trading partner), strong household consumption, and faster investment (driven by infrastructure and the return of business confidence). Going forward, BI will pay a close attention to both global and domestic economy development in utilizing an accommodative policy mix.” “However, we continue to look for a 25bps cut by BI to 4.75% in Q1 2020; on top of alternative monetary policy via macroprudential and liquidity-supporting measures to effectively transmit the lowering of the benchmark interest rate into the economy.”

Following preliminary readings from CME Group, open interest rose by around 9.8K contracts on Thursday and volume increased by nearly 56K contracts. E

Following preliminary readings from CME Group, open interest rose by around 9.8K contracts on Thursday and volume increased by nearly 56K contracts. EUR/USD now looks to 1.0980EUR/USD charted a bearish ‘outside day’ on Thursday amidst rising open interest and volume. That said, further downside is now on the cards and targets the late November low in the 1.0980 region.

Following its pullback from the monthly top, USD/CAD drops to sub-1.3130 area during the pre-Europe session on Friday.

USD/CAD extends declines from the monthly top.The mid-month tops, the immediate ascending trend line on sellers’ radar.50-day SMA, 61.8% Fibonacci retracement hold the key to 200-day SMA.Following its pullback from the monthly top, USD/CAD drops to sub-1.3130 area during the pre-Europe session on Friday. The pair recently failed to cross 50-day SMA, not to forget 50% Fibonacci retracement level of September 2019 to January 2020 fall. Sellers now target multiple highs marked during the middle of the month around 1.3080. However, an upward sloping trend line since January 01, at 1.3050, could question further declines. On the upside, 50% Fibonacci retracement and 50-day SMA will guard the near-term recovery around 1.3140/50, a break of which could escalate the run-up towards 61.8% Fibonacci retracement level of 1.3200. If at all the bulls manage to keep the sentiment intact beyond 1.3200, a 200-day SMA level of 1.3240 could return to the charts. USD/CAD daily chart Trend: Pullback expected  

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recently published GDP figures in the Philippines. Key Quotes “The Ph

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recently published GDP figures in the Philippines. Key Quotes “The Philippines’ real GDP growth jumped to 6.4% y/y in 4Q19 (3Q19: revised down to 6.0% y/y from 6.2% y/y), a tad lower than our estimate (6.5% y/y) but matching Bloomberg consensus (6.4% y/y). It was largely thanks to the continued acceleration in government spending for infrastructure projects, decent private construction activities, and sustained household consumption amid benign inflation, accommodative monetary policy and overseas remittance inflows in 4Q19.” “The 2019 full-year GDP growth came in at 5.9%, lower than our projection of 6.0% and missing the government’s revised target of 6.0%-6.5%. However, we expect the economy to hold up its expansion above 6.0% throughout 2020 amid residing global downside risks. Domestic drivers such as infrastructure projects, overseas remittance inflows, and accommodative monetary policy will continue to underpin the growth outlook. We maintain our 2020 full-year growth target at 6.5% (Official target: 6.5%-7.5%).” “Having said that, we think a further improvement in the economy and a gradual rise in inflation will unlikely derail BSP’s plan to further unwind its past aggressive monetary policy tightening this year. Strong PHP against the USD and lingering external downside risks support further rate cuts by BSP over next few months. We reiterate our call for a 25bps rate cut to 3.75% at the 6 Feb MPC meeting before the window of opportunity narrows further.”

The greenback is clinging to its daily gains around 97.70 at the end of the week, shedding some gains after recent yearly tops near 97.80 when measure

DXY gives away some gains and return to the 97.70 region.The dollar clinched YTD highs around 97.80 on Thursday.Flash Manufacturing/Services PMIs next of relevance.The greenback is clinging to its daily gains around 97.70 at the end of the week, shedding some gains after recent yearly tops near 97.80 when measured by the US Dollar Index (DXY). US Dollar Index focused on virus, data The index has reversed the anaemic session on Thursday and managed to print new 2020 highs near 97.80 following a moderate sell-off in the euro, particularly in the wake of the ECB meeting and President Lagarde’s press conference. In the meantime, markets’ mood remains tilted to the risk-off trading in response to developments from the Wuhan coronavirus, which has now spread to other Chinese cities (including Beijing) and the first case of the virus has been reported in Singapore. Later in the US data space, Markit will publish its advanced manufacturing and services gauges for the month of December in what will be the sole releases on Friday. What to look for around USD DXY briefly tested the area above the 200-day SMA on Thursday, reaching at the same time new 2020 peaks following the downside pressure in EUR post-ECB meeting. In the meantime, headlines from the Chinese coronavirus and uncertainty regarding the US-China ‘Phase 2’ deal keep driving the sentiment in the global markets and favour the ongoing preference for safer assets. Further out and ahead of the FOMC meeting next week, the dollar remains underpinned by the current ‘pause-mode’ from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’. US Dollar Index relevant levels At the moment, the index is gaining 0.04% at 97.72 and a breakout of 97.80 (2020 high Jan.23) would open the door to 97.87 (61.8% Fibo of the 2017-2018 drop) and the 98.54 (monthly high Nov.29 2019). On the other hand, the next support lines up at 97.20 (21-day SMA) followed by 97.09 (weekly low Jan.16) and then 96.36 (monthly low Dec.31).

S&P Global Ratings recently crossed wires, via Bloomberg, while warning that Chinese consumption, a key growth driver in an economy transitioning from

S&P Global Ratings recently crossed wires, via Bloomberg, while warning that Chinese consumption, a key growth driver in an economy transitioning from investment, is set to take a blow from the coronavirus outbreak that hit just as millions of people set out on vacation. Key quotes “If spending on things including discretionary transport and entertainment dropped by 10%, overall GDP growth would fall by about 1.2 percentage points.” “Industries exposed to China’s household spending, especially activities that take place outside the home, will likely feel the biggest economic impact of the outbreak.” “Risk aversion and tighter financial conditions could amplify the impact, including on investment.” "Restrictions on travel and public gatherings have been implemented in Wuhan, the central province in China where the virus was first detected, as well as in several nearby municipalities." "Hong Kong and Beijing are canceling planned holiday activities, according to local officials and state media." FX implications Coronavirus outbreak has been the major blow to the market’s trade sentiment off-late. Even with the details of how this could affect the world’s second-largest economy, the news failed to have any direct impact on the market’s risk tone as traders await the preliminary readings of key PMIs.

GBP/USD gradually recovers Thursday’s losses as it takes the bids to 1.3125 while heading into the London open on Friday.

GBP/USD stops the previous day’s pullback as traders turn cautious.Trade positive headlines fail to impress buyers ahead of the key data that can help foresee BOE moves.China’s coronavirus fears, US PMIs will also be in the spotlight.GBP/USD gradually recovers Thursday’s losses as it takes the bids to 1.3125 while heading into the London open on Friday. The pair might have benefited from the trade positive headlines but market players are waiting for the preliminary readings of January month PMIs for fresh impulse. Following the Queen’s Royal assent to the UK PM Boris Johnson’s Withdrawal Agreement Bill (WAB), Britain is seeking trade deals with the US and Japan before the Brexit. Even so, fears of the US tariffs can’t be mitigated as Tories allowed China’s Huawei to take part in 5G despite the Trump administration’s repeated notices to not do so. US President Donald Trump earlier threatened to levy tariffs on the UK if it fines the American companies like Facebook and Google. Elsewhere, the European Union (EU) leaders keep the head high ahead of the EU-UK trade talks. The same will continue weighing on the risk tone. It’s worth mentioning that China’s outbreak of coronavirus recently offered the major blow to the global risk sentiment. Looking forward, preliminary readings of January month PMIs from the UK and the US will be the key to watch. While the recent improvement in the UK’s earnings and CBI data have cut the odds of the BOE’s rate cuts, traders will keep eyes on the PMIs for further clarification. Analysts at TD Securities anticipate the rate cut odds to be cut even if the data drops as they said, “While some analysts are looking at today's PMIs as the make-or-break factor for the Bank of England decision next week, we believe instead that the hard data has been disappointing enough to justify a rate cut, no matter what comes out of today's PMI report. We had initially expected a 2pt gain to the services PMI to 52.0, but the extreme weakness in the retail sector into the end of the year suggests that firms may not be all that optimistic. We've downgraded our forecast and now fall in line with consensus at 51.0. For manufacturing, we look for a smaller gain, as there seem to be more fundamental issues there, and we look for an increase to 48.0 (market forecast 48.8).” Technical Analysis A daily closing beyond the 45-pip range between 1.3145 and 1.3100, including 50% Fibonacci retracement of its November-December 2019 upside and 21-day SMA respectively, becomes necessary for the pair to register increased volatility.  

Singapore Industrial Production (MoM) came in at 4.1%, above forecasts (3.7%) in December

Singapore Industrial Production (YoY) came in at -0.7%, above expectations (-0.8%) in December

The FX Strategists at Australia and New Zealand Banking Group (ANZ) provide brief insights into the key event risks due on the cards next week, with t

The FX Strategists at Australia and New Zealand Banking Group (ANZ) provide brief insights into the key event risks due on the cards next week, with the US FOMC monetary policy decision to headline. Key Quotes:“Australia: Given the AUD’s disappointing performance following employment data, we think any near-term upside from a strong CPI, and by extension receding RBA expectations, will be limited relative to the downside from stretched global risk sentiment.US: The Fed steps up to the plate. We expect risk markets to remain highly sensitive to changes of language around balance sheet expansion and repo market operations.UK: BoE’s policy meeting is expected to be a tight call. We are marginally in favor of easing, given that inflation is drifting away from target and tough EU negotiations lie ahead.Euro area: GDP and CPI are likely to remain subdued amidst stabilizing sentiment data through Q4 2019.China: Manufacturing and non-manufacturing PMIs will be key to sustaining global momentum. Any downside will weaken confidence in global growth, supporting the USD and JPY in the near-term.“

USD/INR declines to 71.25, after rising to the three-week-top of 71.51, ahead of the European session on Friday. While the broad US dollar strength fa

USD/INR fails to hold on to recovery gains.Indian government actively looks for measures to prove the global forecast of weak growth and downbeat revenues.China’s outbreak of coronavirus heavies the market’s risk-tone, the US-EU and the US-UK trade tussle offer additional challenges.USD/INR declines to 71.25, after rising to the three-week-top of 71.51, ahead of the European session on Friday. While the broad US dollar strength favors the pair’s broad recovery since the middle of the month, the recent pullback could have taken clues from the domestic measures that the Indian government plans to introduce. The US dollar strength could be attributed to the risk-off moves that have recently gained momentum based on China’s outbreak of coronavirus. The lethal humanly transmitted virus has crossed national boundaries to Sydney and Japan whereas its death toll rose beyond 25 so far. Also contributing to the risk aversion is the latest trade tussle between the US and the EU as well as the US and the UK. US President Donald Trump used the World Economic Forum (WEF) stage to signal upcoming trade wars with the Eurozone and Britain. Though, the UK might avoid the same based on the good terms between the US-UK leaders. With this, the US 10-year treasury yields struggle around 1.745% whereas Asian stocks mark mixed results with India’s BSE SENSEX flashing 0.23% gains to 41.485 by the press time. At the domestic front, the Indian government is ready to increase the Foreign Portfolio Investment (FPI) and also supports the domestic companies’ listing to foreign exchanges in order to avoid a higher fiscal deficit, as widely expected. The global giants like Moody’s and International Monetary Fund (IMF) have earlier cut down the nation’s growth forecasts. Given the lack of Indian catalysts on the economic calendar, markets will keep eyes on the December month activity numbers for the US. This doesn’t dim the charm of the risk headlines emanating from China and the US. Technical Analysis An ascending trend line since January 14, at 71.15, followed by 71.00 round-figure can question sellers ahead of 200-day SMA, at 71.66 now. Alternatively, 71.75 and 72.00 could lure buyers.  

In an interview with the Nikkei Asian Review on Friday, the Turkish Finance Minister Berat Albayrak made some comments on the exchange rate value. Alb

In an interview with the Nikkei Asian Review on Friday, the Turkish Finance Minister Berat Albayrak made some comments on the exchange rate value. Albayrak said: “Lira "looks competitive" at 5.7-5.9 against the US dollar.” Further Comments: Financial stability was a matter of "national security." "When we look at the developments in imports and exports as well as balancing in the current-account deficit, the foreign exchange rate looks competitive."

The White House administration official told Reuters late Thursday, the US President Trump will sign a new United States-Mexico-Canada Agreement (USMC

The White House administration official told Reuters late Thursday, the US President Trump will sign a new United States-Mexico-Canada Agreement (USMCA) trade deal on Wednesday during a ceremony at the White House. The official said: “This is a major accomplishment for the president and he will be taking this on the road in the coming weeks.” This comes after the US Senate overwhelmingly approved the legislation. The United States-Mexico-Canada Agreement (USMCA), which replaces NAFTA, still needs to be formally approved by Canada, Reuters cites. The above news has little to no impact on the fx space, as it trades in tight trading ranges amid Chinese Lunar New Year holiday break and worries over the Coronavirus spread. Coronavirus spreads globally, China continues containment efforts

EUR/USD fell to seven-week lows on Thursday, breaching support of the trendline connecting Oct. 1 and Nov. 29 lows. With the downside break of the tre

EUR/USD is on the defensive, having dived out of key ascending trendline. President Lagarde on Thursday said risks to the outlook remain on the downside.German and Eurozone PMIs will likely guide the price action on Friday. EUR/USD fell to seven-week lows on Thursday, breaching support of the trendline connecting Oct. 1 and Nov. 29 lows.  With the downside break of the trendline, the single currency has lost its upward trajectory.  Markets offered euros on Thursday after the European Central Bank (ECB) was seen as more dovish than expected after President Lagarde told a news conference that risks to Eurozone growth are tilted to the downside.  Eyes preliminary PMIs Germany's Markit Manufacturing PMI for January is forecasted to have risen slightly to 44.5 in January from December's 43.7. Meanwhile, Eurozone's Manufacturing PMI for January is expected to print at 46.8 versus December's 46.3. A below-forecast reading would validate Lagarde's concerns regarding downside risks to the Eurozone economy and strengthen the bearish pressures around the common currency. In that case, EUR/USD could test support at 1.0981 (Nov. 29 low).  The single currency may find takers if the PMI numbers beat estimates by a big margin, although the bearish outlook would be invalidated only if the pair manages to close above Thursday's high of 1.1109.  Apart from the German and Eurozone PMI numbers, the pair may also take cues from the ECB President Lagarde's speech, due at 10:30 GMT and the US Manufacturing PMI, scheduled for release at 14:45 GMT.  The pair is currently trading near 1.1050, having hit a seven-week low of 1.1036 on Thursday.  Technical levels  

USD/IDR remains favorite to the bears while declining to 13,574 during early Friday. The quote slipped to the fresh low since February 2018 of 13,569

USD/IDR drops to the fresh low since February 2018.The pair recently ignored a bullish candlestick formation while breaking the medium-term support trend line.50-day SMA, a two-month-old resistance line will challenge buyers during the recovery.USD/IDR remains favorite to the bears while declining to 13,574 during early Friday. The quote slipped to the fresh low since February 2018 of 13,569 during the Asian session. In doing so, the quote ignored the bullish Doji candlestick formation portrayed on Thursday as well as broke a downward sloping trend line stretched from September 12, 2019. Also showing the sellers’ dominance is the bearish signal from MACD. With this, the pair is likely dropping towards the late-October 2017 low near 13,475 whereas January 2018 bottom close to 13,270 could please the bears afterward. Should the pair closes beyond the support-turned-resistance line, at 13,620 now, on a daily basis, 13,730 and 13,835/40 can entertain buyers. Though, the pair’s upside beyond 13,840 will be challenged by 50-day SMA and two-month-old resistance line around 13,925/35. USD/IDR daily chart Trend: Bearish  

Prashant Newnaha, Senior Asia-Pacific Rates Strategist at TD Securities, offer a sneak peek at what to expect from February’s Reserve Bank of Australi

Prashant Newnaha, Senior Asia-Pacific Rates Strategist at TD Securities, offer a sneak peek at what to expect from February’s Reserve Bank of Australia’s (RBA) monetary policy decision. Key Quotes: “Yesterday's Dec employment number provides the RBA an out from cutting next month, following a number of positive, but limited series of data prints. The weak details from Q3 GDP suggest RBA forecasts could be cut in the Feb SoMP, but the RBA may draw comfort from recent data and improving offshore sentiment, potentially limiting SoMP downgrades. We have little insight into the RBA's reaction function. However, the drop in the unemployment rate and improving global outlook tilt the balance in favour of the RBA remaining on hold in Feb. April is lining up as the next likely month the RBA could cut.”

USD/CNH pair closed at 6.9282 on Thursday, confirming an upside break of the trendline sloping downwards from Dec. 3 and Dec. 24 highs. The upside bre

USD/CNH has breached key falling trendline hurdle. The pair has carved out a bullish engulfing candle on the weekly chart. The path of least resistance is to the higher side. USD/CNH pair closed at 6.9282 on Thursday, confirming an upside break of the trendline sloping downwards from Dec. 3 and Dec. 24 highs.  The upside break of the descending trendline is accompanied by a bullish engulfing candle on the weekly chart and indicates the sell-off from September 2019 highs
near 7.20 likely ended at 6.8453 on Jan. 20 and the path of least resistance is now on the higher side.  At press time, the pair is sidelined around 6.9265, having hit a high of 6.9421 on Thursday.  Bulls now face immediate resistance at 6.9522 (Nov. 7 low), above which next hurdle is located at 6.9770 (38.2% Fib R of September high - January low).  On the lower side, support is seen at 6.8956 (Jan. 22 low) and 6.8659 (Jan. 14 low).   Daily chart Weekly chartTrend: Bullish Technical levels  

Based on their Non-FDI (Foreign Direct Investment) tracker, analysts at Standard Chartered recently said that capital outflow from China followed the

Based on their Non-FDI (Foreign Direct Investment) tracker, analysts at Standard Chartered recently said that capital outflow from China followed the historical pattern of picking up on a seasonal basis. Key quotes Our tracker suggests that China registered non-FDI capital outflows of USD 27.1bn in December, slightly higher than USD 24.7bn in November, following the historical pattern, despite a stronger currency. Non-FDI capital outflows rose to USD 192bn in 2019, compared with outflows of USD 108bn in 2018, against a backdrop of external uncertainty and currency depreciation. Exports soared 7.6% y/y in December partly on seasonal and base effects. The early occurrence of Lunar New Year in 2020 may have led to the front-loading of trade activity. The announcement of phase-one deal also likely boosted market sentiment.  The trade surplus expanded to USD 46.8bn from USD 37.6bn in November, and the services trade deficit widened to c.USD 22bn, according to our estimates. Banks registered their first monthly net FX settlement (i.e., net buying of FX from clients) since May 2019, as per State Administration of Foreign Exchange (SAFE) data. While the incentive to hold FX increased, demand for purchasing FX eased in December.

As per the prior analysis, GBP/USD Price Analysis: Under pressure between 21-day SMA and 50% Fibonacci, the pound is creeping higher, but what is the

As per the prior analysis, GBP/USD Price Analysis: Under pressure between 21-day SMA and 50% Fibonacci, the pound is creeping higher, but what is the longer-term outlook? COT, 6-months Looking to the COT report, we can see that the commercials are now short which could signal a fade on rallies and a resumption of the 2018 downtrend as large investors/speculators move to the highest long position since April 2018 and thus buyers are drying up ahead of a large open space all the way back to 1.3900. The rise in GBP net longs, (+8% of o.i.), suggests more downside risk to sterling if the Bank of England cuts rates. There need's to be a correction before blue skies, especially should there not be a seismic meaning fundamental shock to the markets that could trigger such a move: Weekly chart  The downside correction we witnessed was the healthy reaction where X marked the spot (31.8% /50% Fibo confluence) in the 1.29 handle as follows. Daily chart Daily chart, bulls in control and target prior swing highs of 1.3320 as the -27.0% Fibo – (138.2% higher up at 1.3400).                          

Gold prices lack momentum while trading around $1,561.50 during early Friday. Even so, the bullion stays inside a short-term ascending trend-channel f

Gold fails to cross intermediate Fibonacci resistance while keeping eight-day-old bullish technical formation.January 14 lows will please sellers during the channel’s breakdown, 23.6% Fibonacci retracement can challenge buyers alternatively.Gold prices lack momentum while trading around $1,561.50 during early Friday. Even so, the bullion stays inside a short-term ascending trend-channel formation that portrays the strength of the underlying momentum. With this, buyers can take aim at the formation resistance surrounding $1,574.50 if managed to break 50% Fibonacci retracement of the early-month upside, at $1,564.50. In a case where the bulls dominate past-$1,575, 23.6% Fibonacci retracement level of $1,590 can offer an intermediate halt during the run-up to $1,600 and then to the monthly high near $1,612. On the downside, 61.8% Fibonacci retracement and the channel’s support line will question the sellers close to $1,553 and $1,551. Also nearing will be $1,550 round-figure. Given the bears’ ability to rule below $1,550, the current month’s low of $1,536 and $1,530 could flash on their radars while $1,517 could grab the spotlight afterward. Gold four-hour chart Trend: Further recovery expected  

With employment growth picking up pace in November/December, the Reserve Bank of Australia is unlikely to cut interest rates in February. However, the

With employment growth picking up pace in November/December, the Reserve Bank of Australia is unlikely to cut interest rates in February. However, the employment growth is likely to slow over the first half of 2020, forcing the central bank to take action, ANZ analysts mentioned in their weekly research note.  Key quotes The drop in unemployment over the later part of 2019 is a surprise given the slowdown in growth. The link with economic growth makes it difficult to think that employment can continue to be as strong as it was over November/December. As such we think the RBA is still likely to ease further. We no longer expect a rate cut in February. We think the Bank will want to see data on consumer spending over Q4 and January before acting.  April is the likely date for the next rate cut, with another a few months later. We see the cash rate at 0.25% by the end of the third quarter at the latest.

The containment efforts by the Chinese authorities seem to be of little help, as the China Coronavirus outbreak spills over internationally, with more

The containment efforts by the Chinese authorities seem to be of little help, as the China Coronavirus outbreak spills over internationally, with more cases reported from across the Pacific to Atlantic. Fresh reports from Xinhua news agency cited that a total of 1,072 suspected cases have been reported in China’s 20 provincial-level regions, according to China’s National Health Commission. Japan’s Economy Minister Nishimura expressed concern and said that 710 Japanese nationals in Wuhan presently. Meanwhile, six people in the Australian states of New South Wales and Queensland are undergoing tests for the coronavirus. A patient at Hackensack University Medical Center in New Jersey, US is being evaluated for the virus. Earlier today, Yonhap reported the second case of the coronavirus following the confirmation from the government. 105 new cases of Wuhan coronavirus confirmed in Hubei - Global Times

The buying interest in the Japanese yen gathered traction in the last hour or so, pushing USD/JPY lower to 109.46 from the session high of 109.58. Wit

USD/JPY has established another low high on the hourly chart at 109.58.  A close below the 100-week MA on Friday would confirm a bearish reversal. The buying interest in the Japanese yen gathered traction in the last hour or so, pushing USD/JPY lower to 109.46 from the session high of 109.58.  With the reversal lower from 109.58, the pair has established another lower high on the hourly chart. So, a re-test of Thursday's low of 109.27 cannot be ruled out. Weekly close pivotal The pair is currently trading below the 100-week average at 109.66. The bulls failed to secure a weekly close above that average at least six times during the two months to the second week of January.  The pair scaled the 100-week average last week, confirming a bullish breakout or a continuation of the rally from the low of 104.45 seen in August.  So far, however, the follow-through has been dismal, as evidenced by the pair's drop below the key average.  If the pair closes below the 100-week average of 109.66 on Friday, the bullish breakout would fail. A failed breakout would imply bearish reversal and open the doors for a deeper drop to 107.65 (January low).  Weekly chartTrend: Bearish below 100-week MA Technical levels  

The incoming Bank of England (BOE) Governor and Chief Executive of the Financial Conduct Authority - the City regulator, Andrew Bailey, said in an int

The incoming Bank of England (BOE) Governor and Chief Executive of the Financial Conduct Authority - the City regulator, Andrew Bailey, said in an interview with the UK Times, “Britain badly prepared for a market crash.” Additional Quotes: Concerned about how ill-prepared the UK is for a prolonged fall in the stock market or house prices. Increased exposure to asset values had been accompanied by a declining understanding of the fallout from a decline in prices, saying that the issue was "one of the things that worries me most". "There hasn't been a major fall in asset prices now since the [global financial] crisis and of course, we don't want one to happen, but they do happen. I do think that there is not as great an understanding of what the consequences of that could be." Meanwhile, the GBP/USD pair is seen consolidating the bounce around 1.3125 region, benefiting from a broad-based US dollar pull back and Brexit optimism.

RBNZ Q4 Sectoral Factor Model Inflation Index arrives at +1.8% YoY More to come ...

RBNZ Q4 Sectoral Factor Model Inflation Index arrives at +1.8% YoY  More to come ...

The analysts at Westpac forecast Westpac a 0.6% rise in the Australian December quarter CPI lifting the annual pace to 1.8%yr from 1.7%yr. Key Quotes:

The analysts at Westpac forecast Westpac a 0.6% rise in the Australian December quarter CPI lifting the annual pace to 1.8%yr from 1.7%yr. Key Quotes: “The December quarter is seasonally strong with the ABS projecting a seasonal factor of +0.1ppt. The seasonally adjusted CPI is forecast to rise 0.6%. The trimmed mean is forecast to rise 0.4%qtr/1.5%yr and the weighted median is forecast to rise 0.5%qtr/1.3%yr. The six month annualized pace of the trimmed means is flat are 1.6%yr. 
The sources of inflationary pressure remain tightly contained. Boosting the CPI in Q4 is an 8.5% rise in tobacco (worth 0.29ppt) and the 5.5% rise in auto fuel prices (worth 0.18ppt) which combined make a 0.47ppt contribution to the Q4 CPI. There is something of a drought impact in food prices (1.2%qtr/0.19ppt) but as yet no bushfire effect which, if present, could appear in Q1 2020. Outside the above, prices are close to flat or falling. Housing costs rise just 0.2% (0.05ppt), recreation prices also rise 0.2% (0.03ppt), clothing & footwear (–1.5%) and household contents & services (–0.3%) have a seasonal fall while communication prices continue to the trend decline (–1.1%/–0.03ppt). Core inflation at 1.5%yr (trimmed mean) remains well below the bottom of the RBA target band as moderating housing costs offset modest inflationary pressure elsewhere.”

The USD/CHF pair is trading in the positive territory near the psychological resistance of 0.97 on Friday. SNB could intervene if necessary Swiss Nati

SNB Chief Jordan's comments continue to weigh over CHF in Asia. USD/CHF is probing the psychological hurdle of 0.97, which has been capping upside since Jan. 17.The USD/CHF pair is trading in the positive territory near the psychological resistance of 0.97 on Friday.  SNB could intervene if necessary Swiss National Bank's (SNB) Chairman Thomas Jordan was out on the wires Thursday, assuring markets that US' decision to add Switzerland to its list currency watchlist will not deter the SNB from cutting rates or intervening in the FX markets to halt upside in the Swiss franc.  Jordan also said that negative rates are a necessity, and reiterated that the SNB conducts its independent monetary policy that does not tag along with the ECB, according to Reuters.  As a result, markets offered CHF on Thursday and the weak tone has persisted so far in Asia, despite coronavirus scare.  Bulls need close above 0.97 The area around the psychological level of 0.97 has been capping upside since Jan. 17. The pair did rise to 0.9729 on Jan. 22 but failed to print a daily close above 0.97.  The bulls, therefore, need a daily close above 0.97. That would open the doors for resistance at 0.9762 (Jan. 10 high).  Technical levels  

Citing the latest update on the coronavirus situation in China, Global Times reported that 105 new cases of Wuhan coronavirus were confirmed in Hubei,

Citing the latest update on the coronavirus situation in China, Global Times reported that 105 new cases of Wuhan coronavirus were confirmed in Hubei, a province in Central China. Wuhan is Hubei’s capital. Further Details: The National Museum of China in Beijing will close from Saturday to avoid the spread of the virus. Starting from 10 am Friday (local time), Huangshi, another city in Hubei Province, would suspend ferry and bus operation, close the Yangtze river bridge and stop passenger traffic. Separately, South Korean news agency, Yonhap, reported the second case of the coronavirus following the confirmation from the government.

NZD/USD stays positive while trading around 0.6615 during the early Friday. The pair showed no major response to weak Credit Card Spending from New Zealand.

NZD/USD holds on to recovery gains after upbeat New Zealand CPI ignores weaker than forecast Credit Card Spending data.The monthly falling trend line, 23.6% Fibonacci retracement limit immediate upside to 21-day SMA.38.2% Fibonacci retracement, 200-day SMA keep sellers away.NZD/USD stays positive while trading around 0.6615 during the early Friday. The pair showed no major response to weak Credit Card Spending from New Zealand as major attention was given to the early-day release of Q4 CPI that pleased buyers. Following better than forecast readings of New Zealand’s fourth quarter (Q4) CPI data, December month Credit Card Spending from the nation slipped below 4.3% forecast to 3.4%. That said, the pair currently confronts short-term key resistance confluence around 0.6625 that encompasses a falling trend line since December 31 and 23.6% Fibonacci retracement of the pair’s rise from early-October to December-end. Should NZD/USD prices manage to register a daily closing beyond 0.6625, further recovery to a 21-day SMA level near 0.6650 can’t be ruled out. Also on the bulls’ radar will be the January 16 top near 0.6665 and December 31 high of 0.6756. Meanwhile, sellers will look for entry below the latest lows close to 0.6580. In doing so, a 38.2% Fibonacci retracement level of 0.6543 and 200-day SMA at 0.6512 now, will become their favorites. NZD/USD daily chart Trend: Pullback expected  

A bumper employment report has substantially eased pressure on the RBA to deliver a cut in February, even so, the Aussie dollar may have a tough time

A bumper employment report has substantially eased pressure on the RBA to deliver a cut in February, even so, the Aussie dollar may have a tough time scoring big gains, courtesy of low domestic bond yields, ANZ analysts mentioned in the weekly note.  Key quotes While RBA easing is likely to have been pushed out by employment data, lack of carry from low domestic yields will hamper the AUD in the medium term.  While easing geopolitical risks and accommodative global policy have been supportive, only a globally synchronized rise in growth would lift the AUD much above current levels.  The official data released on Thursday showed Australian unemployment unexpectedly declined to 5.1% in December from the prior month's 5.2%. Employment rose by 28,900 people - almost triple estimates - while participation remained at 66%, according to Bloomberg.  Markets were expecting a dismal data as the economic sentiment had weakened in December due to wildfires.  Markets priced out prospects for an RBA rate cut in February following the jobs report. Major investment banks also pushed out rate cut forecasts to the second quarter.  Still, the AUD/USD pair may struggle to challenge and rise above the recent high of 0.7016, as the Australian government bond yields are offering significantly lesser yields than their US counterparts.  For instance, the 10-year Aussie yield is seen at 1.08% and the US 10-year yield is trading at 1.734%. 

The Standard Chartered analysts offer their outlook on the Reserve Bank of New Zealand (RBNZ) monetary policy in the year ahead. Key Quotes: “RBNZ is

The Standard Chartered analysts offer their outlook on the Reserve Bank of New Zealand (RBNZ) monetary policy in the year ahead. Key Quotes: “RBNZ is likely to keep the policy rate in 2020 on hold while maintaining an easing bias Government fiscal policy will spur growth in conjunction with already accommodative monetary policy settings We expect GDP growth to remain stable at 2.3% in 2020; services to recover from a lackluster 2019.”

WTI pulls back from early-November lows while taking the bids to $55.60 during the Asian session on Friday. Downbeat inventory levels, fears of demand

WTI snaps three-day losing streak amid fresh headlines from the Middle East.News from Libya, Iran and Iraq suggest the US fight with the Arab world is far from over.Preliminary readings of global PMIs, risk catalysts in focus.WTI pulls back from early-November lows while taking the bids to $55.60 during the Asian session on Friday. Downbeat inventory levels, fears of demand slowdown and an end to global production cut have recently weighed on the black gold. However, fresh headlines from the Middle East suggest the geopolitical tension to prevail. The US-Middle East drama continues… Be it Libya Gen Khalifa Haftar’s warning to target civilian planes as the top US-Iran envoy’s threat to kill late Iranian commander Soleimani’s successor are the top headlines that signal the fears of oil supply outage is still on the cards. Also portraying the US-Middle East tussle are the comments from the US special representative for Syria that mentions, “Any talks on troop withdrawal from Iraq must include all aids.” News of Brazil to discuss cooperation with the OPEC and doubts over the global oil producers’ further support to the macro output cut policy dominated before a few hours. Also signaling the cut in future demand were fears of China’s coronavirus that have so far taken lives off China while also spreading outside the dragon nation’s border. With this, the market’s risk-tone seems to stabilize as traders concentrate more on the indicators supporting the reduction in supply than a likely decline in the demand. On the economic front, numbers from the official Energy Information Administration (EIA) as well as private American Petroleum Institute (API) both registered an increase in the US inventories during their latest releases. Moving on, preliminary PMI numbers from the US, Eurozone and the UK will be the key to watch during the rest of the day. Though, trade/political headlines will keep the driver’s seat. Technical Analysis Sellers look for fresh entry below the latest low of $54.79 whereas buyers will avoid entering any positions unless the quote rises past $57.50 that comprises the mid-month low.  

EUR/JPY is currently testing the bounds of the uptrend line rising from September and October lows. A break below the trendline support at 121.00 on a

EUR/JPY is probing major ascending trendline support. A downside break would confirm a bearish reversal and expose deeper support levels. EUR/JPY is currently testing the bounds of the uptrend line rising from September and October lows.  A break below the trendline support at 121.00 on a daily closing basis would suggest the upside from September lows below 116.00 has run its course, opening the doors for a drop to deeper support levels.  The first major hurdle for sellers after the breach of trendline would be 120.16 (Jan. 3 and Jan. 8 low). Initial resistance is marked by an hourly chart falling trendline resistance, currently at 121.88. Securing a foothold above that would revive the bullish case and expose the recent high of 122.87.  At press time, the pair is sidelined just above 121.00. The cross printed a low of 120.63 on Thursday but managed to close above the ascending trendline rising from September lows.  Daily chartTrend: Bearish below trendline support Technical levels  

Following yesterday's jobs data and another improvement in the unemployment rate, the bulls are back in the picture, thrown a lifeline and some more t

AUD/USD bull channel intact and the resistances are well mapped out to target.Subsequent downside follow-through will open up the 61.8% Fibo.Following yesterday's jobs data and another improvement in the unemployment rate, the bulls are back in the picture, thrown a lifeline and some more time to bail out a sinking ship.  Looking to the charts, we can see that the bullish channel is still very much intact.  As per yesterday's analysis, the bulls can now look to a break of the prior resistance at 0.6880 and then a full reversal of the top of the RHS of the H&S which will put them in good stead for a continuation of the bullish trend.  On the flipside, as per yesterday's pre jobs data release, the bears can target the golden ratio as the 61.8% Fibonacci retracement target, 0.6820 area which will be expected to hold the initial tests. A subsequent break there will be game over the committed bulls and 0.66 will be on the cards. 0.6800 will give way to 0.6755 November low ahead of the target the 0.6671 October low  

Bank of England will cut rates by 25 basis points this month no matter what comes out of January's PMI report, scheduled for release on Friday, accord

Bank of England (BOE) will cut rates by 25 basis points this month no matter what comes out of January's PMI report, scheduled for release on Friday, according to TD Securities analysts.  Key quote While some analysts are looking at today's PMIs as the make-or-break factor for the Bank of England decision next week, we believe instead that the hard data has been disappointing enough to justify a rate cut.  At the end of the day, we look for more analysts to shift their stance to calling for a rate cut next week. Analysts think the poor retail sales report for December released earlier this month was the final nail in the coffin for the BOE. December retail sales contracted by -0.6% month-on-month. That was well below the consensus estimate of +0.6% and came on the back of a downwardly revised -0.8% drop in November. The Markit Manufacturing PMI for January is seen rising to 48.9 from the prior month's 47.5. Meanwhile, Services PMI is forecasted to tick higher to 51.00 from 50.00. Both data are scheduled for release on Friday at 09:30 GMT. 
 

GBP/JPY registers few moves while trading around 143.65 during Friday’s Asian session. On Thursday, the pair registered another pullback from 38.2% Fi

GBP/JPY repeated fails to clear 38.2% Fibonacci retracement, stays above 21-day SMA since January 14.61.8% Fibonacci retracement, the two-month-old rising trend line will lure sellers below the short-term moving average.Buyers will aim for December month high during the upside break.GBP/JPY registers few moves while trading around 143.65 during Friday’s Asian session. On Thursday, the pair registered another pullback from 38.2% Fibonacci retracement of its run-up from November 22 to December 13. Even so, prices remain beyond 21-day SMA. Considering the pair’s gradual recovery since January 06, coupled with mildly bullish MACD signals, buyers should hold their positions while targeting the 38.2% Fibonacci retracement level of 144.65. A daily closing beyond 144.65 will quickly flash 145.00 on the chart whereas 23.6% Fibonacci retracement level and December month’s high, near 144.90 and 148.00 respectively, could lure the bulls afterward. Meanwhile, 61.8% Fibonacci retracement level of 142.60 can limit the pair’s declines below 21-day SMA, at 143.17 now. During the quote’s additional weakness past-142.60, an ascending trend line from November 22, at 141.50, will be the key to watch. GBP/JPY daily chart Trend: Further recovery expected  

EUR/USD is back on the defensive after an early-month bout of strength fell flat. The currency pair reversed higher from 1.0981 at the end of November

EUR/USD has breached a three-month ascending trendline. Daily chart indicators are flashing bearish signals. The higher low of 1.0981 (November's low) could be put to test. EUR/USD is back on the defensive after an early-month bout of strength fell flat. The currency pair reversed higher from 1.0981 at the end of November and rose above 1.12 on the new year day. The break above 1.12, however, was short-lived, as the spot fell to 1.11 on Jan. 10 and formed a lower high at 1.1173 on Jan.16 before falling to a seven-week low of 1.1036 on Thursday.  More importantly, the pair closed at 1.1051 on Thursday, violating the support of the trendline rising from Oct. 1 and Nov. 29 lows. The breakdown of the trendline support has exposed the higher low of 1.0981 established on Nov. 29.  Supporting the bearish case is the below-50 reading on the 14-day relative strength index. Further, the MACD histogram is charting deeper bars below the zero line, a sign of strengthening bearish momentum.  The convincing move above Thursday's high of 1.1109 is needed to invalidate bearish pressures.  Daily chartTrend: Bearish Technical levels  

USD/JPY is flashing green in Asia with yen failing to gain ground on the back of upbeat Japanese inflation data. The pair is currently trading at 109.

USD/JPY is extending the recovery from overnight lows near 109.25. Yen is losing ground despite the upbeat Japanese inflation data. The BOJ minutes reiterated the need for continued stimulus. Coronavirus scale may put a bid under the yen. USD/JPY is flashing green in Asia with yen failing to gain ground on the back of upbeat Japanese inflation data.  The pair is currently trading at 109.52, having bounced up from the overnight low of 109.27.  Japan's core consumer price index (CPI) rose 0.7% in December from a year earlier following November's 0.5% rise. The headline CPI rose 0.8%, bettering the forecast of 0.4% by a big margin.  The inflation data was released at 23:30 GMT, but so far has done little to strengthen the bid tone around yen.  After all, inflation remained well away from the central bank’s elusive 2% target despite the acceleration from the previous month.  BOJ minutes reiterate easing bias Bank of Japan's (BOJ) December monetary policy meeting minutes released a few minutes before press time reiterated easing bias.  Most members agreed it is appropriate to continue easing consistently, minutes said. The central bank has been running an ultra-easy policy for more nearly seven years and its easing bias has been priced in long ago.  Yen may gain ground on virus scare The Japanese yen may find love, helping the pair reverse the bounce from 109.26 to 109.53 if the equities remain risk-averse on coronavirus scare. As of Jan. 23,  there were 830 confirmed cases in China. The futures on the S&P 500 are currently reporting marginal gains. Technical levels  

Japan Jibun Bank Manufacturing PMI came in at 49.3, above forecasts (48.7) in January

Following the upbeat release of New Zealand’s fourth quarter (Q4) CPI data, analysts at Westpac anticipate the Reserve Bank of New Zealand (RBNZ) to e

Following the upbeat release of New Zealand’s fourth quarter (Q4) CPI data, analysts at Westpac anticipate the Reserve Bank of New Zealand (RBNZ) to emphasize more on their other mandate concerning employment for fresh impulse. Key quotes Consumer prices rose by 0.5% in the December quarter – a relatively large increase for this time of the year, which is typically weighed down by seasonal price declines. The annual inflation rate rose from 1.5% to 1.9%, returning to where it was at the end of 2018. The result topped our forecast of a 0.4% rise, as well as the 0.2% increase that the Reserve Bank expected in its last Monetary Policy Statement. In both cases, the upside surprise was on the tradables side of the CPI, which rose by 0.4% for the quarter (0.1% annual). Non-tradables prices were as expected with a 0.6% rise, with the annual pace dipping slightly to 3.1%. Today’s result will be a modest positive surprise for the RBNZ and reinforces our expectation for no-OCR cut over the first half of 2020.  With inflation on track to be comfortably within the target range over the next year, the RBNZ’s other mandate – supporting maximum sustainable employment – is likely to be key to any future monetary policy moves.

Total number of confirmed coronavirus cases in China at 830 as of Jan 23 - State media Death toll from coronavirus outbreak in China at 25 - State med

Total number of confirmed coronavirus cases in China at 830 as of Jan 23 - State media
Death toll from coronavirus outbreak in China at 25 - State media More to come 

GBP/USD remains mildly negative while trading near 1.3120 during the Asian session on Friday. The pair took a U-turn from 50% Fibonacci retracement of

GBP/USD remains below 50% Fibonacci retracement for two weeks in a row.An ascending trend line since early-November acts as strong support.An upside break beyond Wednesday’s high could challenge the monthly top.GBP/USD remains mildly negative while trading near 1.3120 during the Asian session on Friday. The pair took a U-turn from 50% Fibonacci retracement of its November-December 2019 upside on the previous day. Even so, prices carry the 21-day SMA breakout registered on Wednesday. Hence, a daily closing beyond the 45-pip range between 1.3145 and 1.3100, including 50% Fibonacci retracement and 21-day SMA respectively, becomes necessary for the pair to register increased volatility. 61.8% Fibonacci retracement at 1.3054 and an upward sloping trend line stretched since early November at 1.3000 now, can question the sellers during the pair’s downside below 1.3100. Should there be increased selling under 1.3000 mark, December monthly low near 1.2900 will lure the bears. Alternatively, the monthly high surrounding 1.3285 will be the buyers’ choice if prices manage to cross 1.3145. Further, 23.6% Fibonacci retracement and December month top, near 1.3340 and 1.3515, will be in focus during the pair’s rise after 1.3285. GBP/USD daily chart Trend: Sideways  

Westpac Banking Corporation now no longer expects RBA rate cut in February, pushes out cut forecast to April and expects a further cut in August 2020.

Westpac Banking Corporation now no longer expects RBA rate cut in February, pushes out cut forecast to April and expects a further cut in August 2020."Due to the surprise back to back fall in the unemployment rate in November and December, we expect the RBA will delay the next rate cut until April."Aussie jobs data December Unemployment Rate: 5.1% vs 5.2% expected/prior - bullish! RBA odds of rate cut will be falling on this data.  December Employment +28.9K vs+15.0k expected, vs 39.9k prior.  December Full Time Employment -0.3K vs 4.2k prior. December Participation Rate +66.0% vs 66.0% expected. Full report Australia's trend unemployment rate decreased to 5.1 per cent in December 2019, according to the latest information released by the Australian Bureau of Statistics (ABS) today. ABS Chief Economist Bruce Hockman said: "In December 2019, the trend unemployment rate decreased slightly to 5.1 per cent, its lowest level since April 2019." In December 2019, trend monthly employment increased by around 18,000 people. Both full-time and part-time employment increased by around 9,000 people. Over the past year, trend employment increased by around 261,000 people (2.1 per cent), which continued to be above the average annual growth over the past 20 years (2.0 per cent). Full-time employment growth (1.5 per cent) was below the average annual growth over the past 20 years (1.6 per cent) and part-time employment growth (3.2 per cent) was above the average annual growth over the past 20 years (3.0 per cent). The bullish channel is still intact Meanwhile, bulls will now be hoping for a positive Consumer Price Index outcome (30.Jan) ahead of the Reserve Bank of Australia, 4th Feb. The price of the Aussie has been supported at channel support and are largely in range of yesterday's analysis ahead o the event as follows: AUD/USD Price Analysis: The price action and levels to look for on Aussie jobsUpdate AUD/USD price analysis More to come...  

Not depressed by the Eurozone’s hardstand, the UK is moving forward towards its first post-Brexit trade deal with Japan, as per The Sun.

Not depressed by the Eurozone’s hardstand, the UK is moving forward towards its first post-Brexit trade deal with Japan, as per The Sun. The news relied on the insider sources to No10 while terming the likely deal as EU++. Key quotes “Japanese Prime Minister Shinzo Abe’s aides have told No10 he wants a deal as soon as possible, with an insider saying it will break new ground on the digital and financial services sectors.” “The Cabinet’s high powered EU Exit Strategy (XS) Committee met in No10 to thrash out key details of Britain’s trade negotiations plan for 2020, including ‘most favored nation’ tariffs.” “It will really help to show Brussels as well as the rest of the world we’re ready to go.” “Chaired by the PM, the committee of the Cabinet’s most senior ministers also agreed to prioritize four countries in total for early trade deals – known as Tier One - as well as the EU.” “They are Japan, the US, Australia and New Zealand, and negotiations on all are expected to begin by the Spring.” “Other countries where deals are expected to take longer have been bracketed as Tier Two, and include Canada.” “The XS committee meets again next Thursday to thrash out tricky details of the negotiations, such as how flexible the UK is prepared to be on agricultural products.” FX implications The news should actually help the USD/JPY and GBP/USD with its likely positive impact on the market’s risk-tone as well as for the UK. While the USD/JPY is matching the expectations by taking the bids to 109.60, the GBP/USD pair seems to have been negatively affected by the US dollar strength as declining to 1.3120 by the press time of early Friday in Asia.

Following the latest Consumer Price Index from Japan for December, we now have the Bank of Japan Minutes. BoJ Minutes BoJ December Monetary Policy Mee

Following the latest Consumer Price Index from Japan for December, we now have the Bank of Japan Minutes.  BoJ Minutes BoJ December Monetary Policy Meeting – Full Minutes Risks to the economy and inflation Warrant attention. Description The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).

China’s outbreak of coronavirus has been weighing on the risk-tone off-late. While the internal death toll due to the humanly transmitted virus has of

China’s outbreak of coronavirus has been weighing on the risk-tone off-late. While the internal death toll due to the humanly transmitted virus has officially reached 17, an increase in the registered cases from Japan and Sydney also negatively affects the market’s trade sentiment. Read: Latest on coronavirus: Beijing cancels Chinese New Year temple fairs, suspected case in Scotland With this, the US 10-year treasury yields stay on the back foot around 1.74% whereas S&P 500 Futures also cut the early-Asia gains to 3,328. Further, prices of gold, currently around $1,563, as well as USD/JPY, close to 109.60, are also affected due to the risk aversion wave.Some of the latest news concerning the virus outbreak:Australian Health authorities have confirmed a person in Sydney is in quarantine after possibly contracting coronavirus. Japan’s Health Ministry confirms the second case of a Chinese national living in the Asian country. Sources: Wuhan medical staff being infected at a faster pace than reported – South China Morning Post (SCMP) FX implications While news like these keep weighing on the risk-tone, safe-havens are likely catching a breath amid the Asian session.

Japan National CPI ex-Fresh Food (YoY) in line with forecasts (0.7%) in December

Japan National CPI ex Food, Energy (YoY) came in at 0.9%, above forecasts (0.8%) in December

Japan’s December CPI has been released. "Inflation pressures remain absent there, with annual headline inflation expected to print at just 0.7%yr in D

Japan’s December CPI has been released. "Inflation pressures remain absent there, with annual headline inflation expected to print at just 0.7%yr in December," analysts at Westpac explained ahead of the event. Japan's CPI 23-Jan-2020 17:30:02 - JAPAN DEC NATIONWIDE CORE CPI +0.7% YEAR/YEAR - GOVT (REUTERS POLL: +0.7%) 23-Jan-2020 17:30:06 - JAPAN DEC CORE-CORE CPI EXCLUDING FRESH FOOD, ENERGY PRICES +0.9% YEAR/YEAR - GOVT 23-Jan-2020 17:30:08 - JAPAN DEC NATIONWIDE OVERALL CPI +0.8% YR/YR - GOVT Description The National Consumer Price Index released by the Statistics Bureau is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. These volatile products such as food and energy are excluded in order to capture an accurate calculation. 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. USD/JPY implications More to come...

Gold stays modestly changed from Thursday’s close while taking rounds to $1,562.5 during Friday’s Asian session. The bullion recently benefited from t

Gold prices await fresh clues to extend the previous two-day run-up.Fears of SARS return, trade war supports the safe-haven’s demand.Preliminary activity numbers from the US, Eurozone and the UK will decorate the economic calendar.Gold stays modestly changed from Thursday’s close while taking rounds to $1,562.5 during Friday’s Asian session. The bullion recently benefited from the market’s risk-off sentiment amid fears emanating from China and trade headlines. However, US dollar gains seem to cap the yellow metal’s upside. Leading the risk aversion is China’s outbreak of coronavirus. The humanly transmitted disease has so far taken 17 lives and spread out of the Chinese borders to renew the fears of Severe Acute Respiratory Syndrome (SARS) virus spread that took 774 lives in 2002/03. The latest update suggests that Japan confirmed the second case of coronavirus while the World Health Organization (WHO) still believes its too early to term it as an international threat. On the trade front, markets seem to have diverted from the US-China trade war but the US-EU tussle is gaining the major attention off-late. The reason is the region’s status as the largest customer in the US. Also joining the trade war signals are the US President Donald Trump’s threats to levy tariffs on the UK. Additionally, US President Trump’s impeachment hearings, as well as the geopolitical noises in the Middle East, also contribute to heavy the trade sentiment. Investors will now look forward to the key activity numbers from the US, Eurozone and the UK to determine near-term trade direction. It should, however, be noted that the qualitative headlines will still keep the driver’s seat. Technical Analysis Short-term ascending trend channel favors further upside to $1,575 ahead of confronting January 06 high near $1,587 and $1,600 round-figure. Meanwhile, $1,550 and $1,535 could limit immediate declines.  

Japan National Consumer Price Index (YoY) above expectations (0.4%) in December: Actual (0.8%)

Analysts at ANZ explained that the Reserve Bank of New Zealand should be "feeling pretty comfortable" following CPI lifting 0.5% QoQ in Q4 – in line w

Analysts at ANZ explained that the Reserve Bank of New Zealand should be "feeling pretty comfortable" following CPI lifting 0.5% QoQ in Q4 – in line with ANZ forecasts, but stronger than the market (0.4%) and RBNZ’s November MPS forecast (0.2%). Key quotes At 1.9%, annual inflation is running just 0.1%pts shy of the 2% target midpoint, but with non-tradeable inflation expected to remain close to 3% y/y and a lift in tradeable inflation in the pipeline, 2020 should bring a 2-handle. The RBNZ should be feeling pretty comfortable with the current state of play. Annual non-tradable inflation is (and should broadly remain) where it needs to be, core measures of inflation are at or close to 2%, and the economic data pulse has recently improved. We expect the OCR will be on hold at 1% for the foreseeable future, barring global shocks.

NZD/JPY takes the bids to 72.50 during early Friday morning in Asia. In doing so, the pair crosses a one-week-old falling resistance line.

NZD/JPY trades near two-day high after New Zealand’s Q4 CPI rose beyond expectations.The pair now heads to 200-hour SMA.23.6% of Fibonacci retracement can offer immediate support.NZD/JPY takes the bids to 72.50 during early Friday morning in Asia. In doing so, the pair crosses a one-week-old falling resistance line. The buyers seem to cheer upbeat data from New Zealand while portraying the recent run-up. Read: Breaking: New Zealand Q4 CPI: YoY 1.9% / QoQ 0.5% (NZD bullish) A 200-hour SMA level of 72.72 is a nearby upside barrier that the bulls are currently targeting. Though, 61.8% Fibonacci retracement of the pair’s declines from January 16 to 23, at 72.80, could restrict the pair’s further advances. In a case where the NZD/JPY prices rally beyond 72.80, 73.00 can offer an intermediate halt to the rise targeting January 16 top surrounding 73.35. Alternatively, pair’s downside break below 23.6% Fibonacci retracement level of 72.25 can recall Thursday’s low of 71.91 ahead of challenging the monthly bottom near 71.25. NZD/JPY hourly chart Trend: Bullish  

AUD/USD stays on the front-foot while taking rounds to 0.6845 amid the initial Asian session on Friday. The pair recently reacted to the preliminary r

AUD/USD concentrates more on upbeat CBA Manufacturing PMI to keep the previous day’s gains triggered by Aussie jobs data.Risk negative headlines from China joins trade war fears.Qualitative catalysts, US Markit PMIs will offer a busy day ahead.AUD/USD stays on the front-foot while taking rounds to 0.6845 amid the initial Asian session on Friday. The pair recently reacted to the preliminary readings of the Commonwealth Bank (CBA) PMI details for January. In doing so, Aussie buyers paid a little heed to news concerning the outbreak of China’s coronavirus. The CBA’s January month PMIs flash mixed results as the headlines Manufacturing PMI crossed 49.0 forecasts to 49.1 whereas Services PMI lagged behind 49.5 expected to 48.9. With this, the Composite PMI lagged below 49.6 prior to 48.6. Even if all of the activity numbers released by the CBA remained in the contraction region, traders favored the Aussie buying especially after Thursday’s welcome prints of jobs report that cut odds of the Reserve Bank of Australia’s (RBA) rate cut. On the other hand, the market’s risk tone has been weighed down by the headlines coming from China that renews fears of Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 26 countries during the year 2002/03. Although the World Health Organization (WHO) still needs some time to consider coronavirus as an international threat, there have been 17 deaths so far due to the same. The recent update concerning the virus outbreak comes from Japan that confirms the second case of coronavirus. Elsewhere, the US is ready to extend its trade war to the European Union (EU) and the UK. While the UK might step back due to the better relations between the US President Trump and British PM Boris Johnson, the EU might stand tall due to being the largest customer of the US. That said, the US 10-year treasury yields extend their south-run to 1.73% by the end of Thursday’s trading whereas the S&P 500 Futures recover mildly to 3,326 by the press time. Moving on, headlines concerning the global trade and China’s coronavirus will be the key to watch. Though, the importance of the preliminary Markit PMIs from the US can’t be ruled out. Technical Analysis A confluence of 200-day SMA and monthly trendline, near 0.6880 limits the pair’s short-term upside.  

US President Donald Trump recently crossed wires, via Reuters, while giving details of the White House peace plan for the Middle East.

US President Donald Trump recently crossed wires, via Reuters, while giving details of the White House peace plan for the Middle East. The Republican leader told to release the plan before the Israeli Prime Minister Benjamin Netanyahu’s visit on January 28. Key quotes White House Middle East peace plan is a great plan. The administration has spoken briefly to Palestinians and will speak to them again in a period of time. Plan to release the Middle East peace plan sometime prior to Netanyahu visit on Jan 28. Palestinians may react negatively at first to plan, but it is actually positive for them and they have a lot of incentive to do it. FX implications Markets show a little reaction to the news that might have contributed positively to the risk-sentiment.

EUR/USD is trading in a weak bear trend below its main simple moving averages (SMAs). Additionally, the spot is also breaking to the downside from a bull chann

EUR/USD remains under selling pressure below the 1.1063 resistance.The level to beat for bears is the 1.1035 support.   EUR/USD daily chart    EUR/USD is trading in a weak bear trend below its main simple moving averages (SMAs). Additionally, the spot is also breaking to the downside from a bull channel which started in October 2019. The bull flag from December 2019 failed as bears took over. EUR/USD formed a head-and-shoulders pattern which is weighing on EUR/USD.   EUR/USD four-hour chart   The spot is trading in a down channel below its main SMAs. The spot is rebounding from the 1.1035 support; however, if the bears break below this level, the euro, in the next sessions, can continue to decline towards the 1.1000 and 1.0971 levels, according to the Technical Confluences Indicator.     Additional key levels   

With the upbeat surprise from New Zealand’s fourth quarter (Q4) CPI pleasing New Zealand dollar buyers, AUD/NZD dropped to the fresh two-week low of 1

AUD/NZD drops to the fresh two-week low after New Zealand’s Q4 CPI beat estimates to the upside.The upward sloping trend lines since August 2019 and the one connecting lows marked from March 2019 will restrict further declines.50-day SMA, 61.8% Fibonacci retracement will keep the near-term upside limited.With the upbeat surprise from New Zealand’s fourth quarter (Q4) CPI pleasing New Zealand dollar buyers, AUD/NZD dropped to the fresh two-week low of 1.0337 after the data. The pair currently takes rounds to 1.0350 by the press time of early Asian morning on Friday. As a result, the pair nears an ascending trend line stretched from August 2019, at 1.0315 now, as well as another support line connecting lows marked from March 2019, at 1.0295. While the strength of the support lines is likely to restrict AUD/NZD declines below 1.0295, bears can target 1.0260 and 1.0220 during the declines post trend lines’ breaks. On the upside, 1.0400 and 1.0430 can offer immediate resistance to the pair ahead of a 50-day SMA level near 1.0450. However, pair’s upside beyond 1.0450 my find it difficult to cross 61.8% Fibonacci retracement of March-November 2019 upside, at 1.0480. AUD/NZD daily chart Trend: Bearish  

Australia Commonwealth Bank Manufacturing PMI came in at 49.1, above forecasts (49) in January

Australia Commonwealth Bank Composite PMI fell from previous 49.6 to 48.6 in January

Australia Commonwealth Bank Services PMI came in at 48.9, below expectations (49.5) in January

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