Trading News

Trading News

03-01-2023 08:01:29

The Forex-Dollar Is Stable As Investors Anticipate Economic Data

US Dollar Index Forecast, News and Analysis

The index surged 8% last year, its greatest annual gain since 2015, as the Fed raised interest rates to combat inflation. The dollar is expected to stabilize as "market activity progressively ramps up this week," according to Christopher Wong, the currency analyst at Singapore's OCBC Bank.

The US dollar remained fairly unchanged on Tuesday as investors awaited a barrage of economic data this week, as well as minutes from the previous Federal Reserve meeting, which will give insight into the Central Bank's thinking on interest rates and inflation.

The dollar index, which measures the US currency against six key currencies, has had a slow start to 2023, rising 0.068% to 103.710. The index surged 8% last year, its greatest annual gain since 2015, as the Fed raised interest rates to combat inflation.

The dollar is expected to stabilize as "market activity progressively ramps up this week," according to Christopher Wong, the currency analyst at Singapore's OCBC Bank. After four straight 75-basis-point rises, the Federal Reserve boosted interest rates by 50 basis points last month. The minutes of the December meeting is expected to be issued on Wednesday, with investors hoping for clues about the Fed's likely policy course in 2023.

Citi analysts predicted that the minutes would grow more fascinating as the doves and hawks differed on how high the final rate should be. "We will also be watching for any advice on what might decide the amount of the rise at the February meeting," Citi said, adding that they continue to predict a 50 basis point boost in February.

Investors will also be watching the payrolls data, which is coming out on Friday. In other news, the Japanese yen rose 0.46% against the US dollar to 130.12 per dollar, its highest level since June.

On Saturday, the Nikkei reported that the Bank of Japan (BOJ) was considering boosting its inflation estimates in January to show price increases near the 2% objective in fiscal 2023 and 2024. Upgrades to the BOJ's inflation prediction would likely feed more speculation that the central bank is seeking to adjust its ultra-loose monetary easing policy, and would follow the BOJ shocking markets by broadening its 10-year yield limit range.

Meanwhile, the euro was down 0.07% to $1.0655, while the sterling was down 0.07% to $1.2037.

03-01-2023 03:01:12

AUD/USD Forex Signal

Today's AUD/USD Updates

Risk 0.75%

Trades must be taken before 5 pm Tokyo time Wednesday.

Short Trade Idea

Short entry after a bearish price action reversal on the H1 time frame, right after the next hit of the upper trend line depicted in the price chart below, which is now at about $0.6835.

Set the stop loss one pip above the current swing high.

Once the trade is 20 pips in profit, move the stop loss to break even.

When the price reaches 20 pips in profit, take 50% of the position as profit and allow the rest to ride.

Long Trade Idea

Long entry after a positive price action reversal on the H1 time frame and the next touch of $0.6781, $0.6762, or $0.6731.

Set the stop loss one pip below the current swing low.

Once the trade is 20 pips in profit, move the stop loss to break even.

When the price reaches 20 pips in profit, take 50% of the position as profit and allow the rest to ride.

The simplest way to see a typical "price action reversal" is for an hourly candle to finish with a higher close, such as a pin bar, doji, outer candle, or even just an engulfing candle. You may profit from these levels or zones by keeping an eye on the price activity that occurs at the given levels.

AUD/USD Analysis

I believed a bullish bounce at $0.6732 would be good for swing traders as a long trade entry, but the bounce was so short-term that it was only suited for scalpers.

Since then, the technical picture has stayed positive, although it is a sluggish trend with several severe drops.

According to the price chart below, the price is increasing within a bullish wedge. Although the bullish impetus is slow or nonexistent, and the Australian Dollar is weak, the steady increase is being supported by a declining US Dollar.

What's most intriguing for bulls here is that there are no critical resistance levels above $0.6953, implying that the price has lots of opportunities to grow.

Before the price may become positive, risk sentiment must shift from risk-off to risk-on.

Although we cannot predict if risk sentiment will change, I believe long swing trades or scalps from bullish rebounds at any of the closely listed support levels appear appealing, particularly as scalps.

There is nothing significant due today for either the AUD or the USD.

03-01-2023 09:01:34

GBPUSD Recovers As Yields Fall And Technicals Propel The Pair Higher

GBPUSD Forecast Today

The GBPUSD has recovered after plunging substantially during the European session today. The price rose above resistance between 1.1991 and 1.2010, and with that break, it surged directly up to retest a cluster of moving average resistance, beginning with the GBPUSD bouncing higher into MA resistance.

  • 200-day moving average at 1.20394.
  • The 100-hour moving average of 1.20451, and
  • The 200-hour moving average is 1.2054.

The top price reached 1.20568 before reversing to the negative. As I type, the price is back at 1.2020, aiming to retest the high of the swing range between 1.1991 and 1.2010. As the pair's trading dynamics shift to ups and downs, that region will be watched for support. In the short term, the swing area remains an important indicator. Keeping above is more bullish. Moving down is more bearish.

US rates are falling, with the 10-year yield currently down -8.5 basis points. Meanwhile, equities have swung back to the negative, rapidly removing the "New Year's joy" from the market. The Dow Jones Industrial Average is down -0.20%. The S& P 500 is down -0.35%, while the Nasdaq is down -0.58%.

Fundamentally, the S&P global manufacturing PMI was lower than expected, while construction spending was somewhat higher (but few expect a miraculous turnaround in building/housing anytime soon).

04-01-2023 01:01:44

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.5617; (P) 1.5680; (R1) 1.5740


EUR/AUD’s break of 55-day EMA suggests that a short-term top was formed at 1.5976. Intraday bias is now on the downside for correction to 38.2% retracement of 1.4281 to 1.5976 at 1.5329. On the upside, above 1.5739 minor resistance will suggest that the pullback has finished, and bring a retest of 1.5976 high.

In the bigger picture, strong support from 55 weeks EMA affirms underlying bullishness. As long as the 1.5271 support holds, the rise from the 1.4281 medium-term bottoms is expected to continue to the 1.6434 key resistance next. Decisive break there should confirm a medium-term bullish trend reversal.

04-01-2023 05:01:29

The USD/BRL Crosses An Important Resistance Level As Higher Values Accumulate

USD/BRL Analysis

Following the Christmas break, the USD/BRL has witnessed increased purchasing pressure, and values have now reached significant resistance levels since the New Year began.

The USD/BRL finished at 5.4800 vicinities yesterday, and it has been steadily rising since hitting a low of nearly 5.1300 on December 23rd. Skeptics of the bullish trend may point out that the forceful bullish move occurred during the Christmas season, which is right, but it may not mask the fact that the USD/BRL is being bought because financial institutions are concerned about the upcoming changes to Brazilian fiscal policy.

With full trade volumes expected to resume in the near term, now that the Christmas season is over and financial institutions are returning to their trading desks, the USD/BRL will have an opportunity to revert downward. The currency pair is approaching significant resistance, and the 5.50000 level may be seen as a crucial psychological gauge. Although the USD/BRL temporarily surpassed this level in November and July of 2022, the Forex pair has not traded over 5.5000 since January 2022.

The next few days of USD/BRL trade might help set the tone for the months ahead. Fundamentally, the United States Federal Reserve will release its Meeting Minutes today, which will be a crucial component in determining behavioral opinion towards interest rate policy for the following half year.

In addition, Brazil's new administration is now in place. The incoming President can press for changes in economic policies that are more liberal in terms of expenditure on social purposes that are justified by his political party. This will almost probably raise concerns about the long-term value of the Brazilian Real.

Restoration to the full trading activity will provide traders with insight into the near-term outlook of financial institutions. The current run-up in value, which has been rather forceful over the last ten days, will have to be followed by a selling wave to generate the impression that the USD/BRL is overbought. If this does not occur and the higher price is maintained, it may raise the possibility that the USD/BRL is ready to enter a prolonged bullish trend. Traders should be aware that a gap is anticipated following the beginning of USD/BRL Forex today.

Support and Resistance

If the USD/BRL suddenly moves around the 5.4900 to 5.4990 ratios on the open, it might indicate that the objective of 5.5000 is firmly within the purview of speculative forces. A prolonged advance over 5.5000 would be considered bullish.

Support should be kept an eye on between 5.4600 and 4.4500. If they are readily exposed, it might indicate that the USD/BRL has been overbought in the last week and that the currency pair will attack the 5.4100 ratios in the short future.

Current Resistance: 5.4990

Current Support: 5.4510

High Target: 5.5660

Low Target: 5.4020

05-01-2023 09:01:00

The Forex Market Remains Under Pressure

Under pressure: market conditions and stress

The government's overarching message in recent months has been that there will be no volatility in the foreign exchange market in January. January has arrived, and the situation remains precarious. Instead of rising, reserves will fall to $32.6 billion following a $1.12 billion payment to the Asian Clearing Union for imports from South Asian countries in November and December.

For the first time, Bangladesh Bank raised its dollar selling rate by Tk 1 to Tk 100 on Tuesday. "There is no evidence of change, and there is little sincerity among policymakers," said Zahid Hussain, a former World Bank Dhaka office head economist.

There have been no certain policy measures to halt the depletion of reserves. The interest rate cap and the resistance to floating exchange rate continue, Hussain said. These two steps could have resulted in currency market corrections because they would have struck a balance between the demand and supply of dollars.

Imports have been limited to some extent, the export trend is positive, and remittance inflows are below expectations, according to Ahsan H Mansur, executive director of the Policy Research Institute. "As a result, there was no discernible influence on the foreign currency market," he explained. Imports totaled $5.9 billion in July, rising to $6.8 billion in August. Imports fell slightly in September and October. It reached $7 billion in November.

According to Bangladesh Bank data, imports amounted to $32.5 billion in the first five months of fiscal 2022-23, up 4.4 percent year on year. Remittances increased 1.7 percent to $10.41 billion in the first half of fiscal 2022-23.

According to Hussain, the trade deficit, which occurs when a country's imports exceed its exports, and the current account deficit, which occurs when a country sends more money abroad than it receives from abroad, have both decreased.

"However, after many years, the financial account has turned negative. The bank account itself requires funding "he added, adding that capital flight is causing a diversion in the foreign currency market.

The financial account discloses both foreign and domestic ownership of domestic assets. If it rises, it indicates that foreign money is entering the country. If it falls, the country's money would flow into international markets, which is where Bangladesh presently finds itself.

"Along with hundi, banks are dishonest, thus money is being laundered out of Bangladesh," Hussain added, citing Islami Bank's loan of Tk 7,246 crore to nine non-existent firms as an example. That sum is most certainly being stolen out of Bangladesh." Such corruption must be prevented. For the financial industry, this is a difficult problem.

"People would not have the confidence to send remittances or foreign direct investment in such an unpredictable climate," Hussain warned.

The situation is so precarious that some banks are buying dollars on the open market to pay letters of credit, according to Mansur, who is also the head of Brac Bank. "Exporters are complaining because they have to acquire dollars at a greater rate than they sold their export revenues for. As a result, exporters are keeping their profits rather than paying them out. As a result, the situation is deteriorating." Some banks are unable to open LCs, impacting the supply of domestic goods.

"Overcoming the current situation over the next six months will be challenging," said Mansur, a former International Monetary Fund analyst. While the pressure on banks has reduced, it is impossible to predict where the situation will be in March, according to Syed Mahbubur Rahman, managing director, and chief executive officer of Mutual Trust Bank. "While the trade and current account deficits have decreased and remittances have grown significantly, the issue is how long this trend will continue."

Ramadan is approaching, thus imports have already begun to rise, according to Rahman, head of the Association of Bankers, Bangladesh, a forum of bank CEOs.

05-01-2023 10:01:13

In The EUR USD Keep An Eye On The 1.05155 Level

EUR/USD Currency Pair Overview

In the EURUSD, keep an eye on the 1.05155 level.

That level indicates the 50% midpoint of the pair's 2022 trading range.

Earlier this week, the price fell to test that level and found buyers. A move below should result in more selling pressure. Moving below the November swing highs at 1.047981 would assist to solidify the downward bias.

For bullish/bearish bias purposes, the 50% level is frequently used as a pivot. As a result, it is one of those technical levels to keep an eye on and watch for indications. Traders will look for momentum in the direction of the break if it is broken.

Hold, and there might be a rebound like the one saw on Tuesday.

06-01-2023 07:01:46

Forex-Dollar Remains Positive On The Solid Us Job Market

Why is the U.S. dollar still so strong?

On Friday, the dollar maintained at a one-month high as US economic data revealed a still-tight labor market, which might keep the Federal Reserve on its aggressive rate rise path.

According to figures released on Thursday, the number of Americans submitting new applications for unemployment benefits fell to a three-month low last week, while layoffs plunged 43% in December.

According to a second study, private employment climbed by 235,000 jobs last month, considerably above predictions of a 150,000 gain.

The US dollar index rose 0.9% against a basket of currencies overnight, reaching a nearly one-month high of 105.27. It was recently 0.03% higher at 105.15, on track for the greatest weekly rise since September of more than 1.5%.

"All of the tales about job losses in the IT industry have yet to be reflected in the overall employment statistics, which implies that although there is weakness in some pockets...there is still significant demand for employees from other sections of the economy," said Khoon Goh, ANZ's head of Asia research.

The greenback's advance overnight pushed the sterling to a six-week low of $1.1873. It was recently up 0.12% at $1.1922.

Similarly, the euro fell 0.8% the previous day to a more than three-week low of $1.0515 and was last stable at $1.0519.

The dollar gained 0.6% against the Japanese yen overnight, reaching a one-week high of 134.045 yen, and last purchased at 133.44 yen.

Markets are now focusing on the carefully awaited nonfarm payrolls data, which is coming later on Friday, with analysts surveyed by Reuters estimating the US economy gained 200,000 jobs in December.

"We might be in for a pleasant surprise," Goh said. "This will keep the Fed steadfast in raising rates."

The euro zone's flash inflation data for December will also be released on Friday, with an annual inflation rate of 9.7% expected.

Inflation in Germany, France, and Spain already slowed last month, suggesting that eurozone inflation may fall short of forecasts.

"The low inflation data, as well as all the shocks," said Ray Attrill, head of FX strategy at National Australia Bank.

"However, in terms of trade, the recent downturn in oil and gas prices that we've seen is quite favorable for eurozone growth prospects...so I would anticipate the euro to get more support from that than it has."

In other developments, the Australian dollar was recently 0.07% higher at $0.6757, after falling 1.3% in the previous session and erasing much of the gains it gained earlier in the week on reports that China had loosened limits on Australian coal imports.

Following a 1% drop on Thursday, the kiwi gained 0.02% to $0.6224, putting it on course for an almost 2% weekly loss, its worst since September.

06-01-2023 01:01:24

AUD/JPY Forecast

AUD/JPY News and Analysis

It's worth noting that the Japanese yen's rise corresponded with the Bank of Japan signaling that it might act.
The AUD/JPY initially attempted to rebound during the early Thursday trade but encountered significant noise and support near the 91 levels.
This is a region that has previously been significant, therefore it will most probably have a lot of market memory associated with it.
It was previously supported, therefore it should now be fought, and I believe many people will be looking at this through the lens of whether or not the level will stay critical.
It's also worth noticing that the 50-Day EMA is approaching the 200-Day EMA, making the so-called death cross. Of course, the death cross is a pretty unfavorable long-term sign, so it will be fascinating to watch how this plays out.
After all, the Japanese yen might be one of the most fascinating currencies to trade in 2023, given how much it was sold off over the previous year. Remember that the Bank of Japan has declared that it would maintain yield curve regulations, with the 10-year note having a 50 basis point maximum.
It's worth noting that the Japanese yen's rise corresponded with the Bank of Japan signaling that it might act. However, the 10-year Japanese Government Bond rate is just 41 basis points higher overnight, so there is still some wriggle space. If the market threatens the 50 basis point threshold in the 10-year yield, the Japanese yen will likely continue to fall as the central bank is obliged to print more bravery for you to purchase more debt.
It's also worth mentioning that the Wednesday candlestick was rather harsh, with significant purchasing against the Japanese yen seen not just in the Australian dollar but also in the majority of other currencies. In other words, we may have recently witnessed the market's "bottom," as we created a double bottom at the ¥88 level. We are not yet out of the woods, but if we can significantly break above the 91 levels, potentially on a daily or even weekly close, I believe this market will begin to go to the outside. Otherwise, it might be swinging around between ¥91 and ¥88.

07-01-2023 12:01:44

Forex Opinion & Analysis

An Overview

After the bear breakout on January 3rd, the EUR/USD bear fulfilled the target of a second leg down. There will likely be buyers at the January 3rd bottom, and the market will continue to move sideways.
Since November 21st, the market has been in a bull channel, and bull channels often grow into trading ranges rather than bear trends, suggesting that sideways movement is most likely.
Furthermore, following January 3rd, the bears could not generate immediate follow-through selling. This increases the likelihood of additional sideways movement here.
Finally, during the January 3rd selloff, it was sensible to purchase the moving average. Those bulls who placed limit orders on the moving average are likely inclined to scale lower, increasing the likelihood of additional sideways trade.
Overall, the market is likely to fall and approach the November 30th or November 21st low (bottom of the channel); but, the market may have to go sideways for some time beforehand.

Next Week's Levels and Opportunities

USD/JPY requires a break at 134.20 to target 132.52 then. Lines at 136.00’s dropped to 1.3588 and continue the long slide lower.
GBP/JPY 163.00 also drops to 162.00 and specifically 162.09, above the target of 164.00’s. Oversold next week begins at low 158.00’s.
EUR/JPY must hold below 141.50 to target 140.13 easily.
AUD/JPY must trade below 91.39 and NZD/JPY 84.29. CAD/JPY trades between 99.19 and 97.59.
GBP/USD oversold begins at 1.1802 and higher requires a break above 1.1938.
AUD/USD holds a die-or-die position at 0.6731 and NZD/USD at 0.6210.
EUR/USD remains the outlier to AUD, NZD, and GBP at 1.0424.
GBP/USD was the first to break to lead AUD, NZD, and EUR/USD lower.
EUR/NZD traded to tops at 1.6937 yesterday and 1.6934 today. Once EUR/NZD ranges are firmly established, ranges hold for many weeks to allow continuous longs or shorts. For EUR/NZD since December, 1.6900’s tops offered many shorts and will last all of January.
EUR/AUD trades to 1.5300’s and 1.5200 targets on a break of 1.5486. EUR/AUD is similar to EUR/NZD as ranges once established hold for many weeks to offer multiple longs and shorts.
Overall currency markets trade in a fairly neutral position and wait on the DXY resolution to break 104.45 or 105.34 and 105.76.

08-01-2023 01:01:30

USD Weekly Outlook

Weekly forex analysis and forecasts

The Dollar Index (DXY) finished the week on the back foot following some major U.S. economic data such as Non-Farm Payrolls (NFP) and ISM services, as well as higher-than-expected core inflation in the eurozone despite decreasing oil costs (the euro accounts for 57.6% of the DXY).

Wage pressures are diminishing, which has been a concern in the US services sector, supporting high inflation statistics, according to a key statistic in the NFP report. It will be fascinating to observe if December's declining average hourly wages materialize into next week's US CPI announcement.

The CPI print will be the focus for the dollar, and given that both core and headline inflation data have been declining since late to mid-2022, a lower result might reduce positive support.

A CPI beat would imply a 50bps interest rate hike at the February Federal Reserve meeting (see to table below for current money market pricing), while a miss would imply a 25bps increase, leaving the DXY vulnerable to a leg down. The trading week will conclude with the Michigan consumer sentiment data for January, which is predicted to edge higher, indicating consumer optimism in the United States.

After the recent falling wedge (black) breakout failed to hold above the 105.00 psychological resistance mark, the daily DXY price movement did not continue higher. The overall trend is bearish, with the Relative Strength Index (RSI) trading below the 50-day SMA and below the 200-day SMA (blue). The CPI next week will most likely give some directional bias moving forward, keeping the DXY rangebound until then.

Resistance levels:

105.00

104.65

104.11

Support levels:

103.42

102.15

09-01-2023 12:01:24

EUR/USD Forecast: Slow Wage Growth in the United States Aids Buyers

An Overview

  • According to US employment data, wage growth halted in December.
  • In December, the US economy added employment at a steady rate.
  • The European Central Bank's main interest rates may soon hit their high.

The EUR/USD outlook for today is optimistic, as the pair extends Friday's gains. The Euro rose on Friday after significant US employment data indicated that pay growth slowed in December, increasing market bets that inflation is slowing. The Fed does not need to be as active as some had predicted.

The labor market remained tight, and the US economy added jobs steadily in December, returning the unemployment rate to a pre-pandemic low of 3.5%. Meanwhile, average hourly salaries climbed by 4.6% year on year in December, down from 4.8% in November.

According to Mario Centeno, a member of the ECB Governing Council, the European Central Bank's benchmark interest rates should soon hit their top despite efforts to control inflation. This assumes no additional external shocks occur.

He said at a conference that interest rates will go up until the European Central Bank (ECB) felt inflation could be decreased to its medium-term objective of 2% "as rapidly as practicable.

Annual consumer price rise in the eurozone slowed to 9.2% in December from 10.1% in November, according to Eurostat numbers released on Friday, falling short of the 9.7% expected in a Reuters poll.

Centeno applauded the four-month low rating, pointing to a significant slowdown in Germany. The ECB expected that average inflation would progressively fall, but that it would not reach its objective for another three years.

EUR/USD Significant Events Today

There will be no major announcements from the eurozone or the United States. As a result, investors will continue to absorb Friday's news.

The EUR/USD is in a sharp bullish advance on the 4-hour chart, having broken over the 1.0550 and 1.0625 resistance levels. The 30-SMA has also been broken, and the RSI has risen over 50. This indicates a shift in attitude from negative to positive.

If bulls maintain their current pace, the price will most certainly reach the next resistance level at 1.0701. If the price remains above the 30-SMA, the bullish trend will continue.

09-01-2023 08:01:20

USD/JPY Trading Support and Resistance

USD JPY Forecast and Analysis

This week, I'll start with my monthly and weekly Forex prediction of currency pairings to keep an eye on. The first portion of my projection is based on my analysis of Forex prices over the last 20 years, which shows that the following approaches have all delivered positive results:

Trading the two currencies that have been moving the strongest over the last six months.

Trading against exceptionally significant weekly counter-trend movements made by currency pairings the previous week.

Carry Trading: Purchasing high-interest-rate currencies and selling low-interest-rate ones.

Let's have a look at the most recent statistics on currency price fluctuations and interest rates, which we gathered using a trade-weighted index of the world's main currencies:

Monthly Outlook for January 2023

I predicted that the EUR/USD currency pair would grow in value and the USD/JPY currency pair would decline in value in January.

The anticipated performance is as follows:

Weekly Forecast for January 8th, 2023

I didn't make a weekly forecast last week. I'm not making a weekly forecast this week because there were no abnormally big counter-trend price swings in the market last week.

Because of high-impact data released this week, directional volatility in the Forex market is anticipated to rise in the following week.

Last week was dominated by the Australian Dollar's relative strength and the Japanese Yen's relative weakness.

Popular Pairs' Key Support/Resistance Levels

Trades should be entered and terminated at or near critical support and resistance levels, according to what I teach. This week, significant support and resistance levels on the most popular currency pairs may be tracked.

Let's look at how trading one of these important pairs off key support and resistance levels last week may have played out:

USD/JPY Levels

Last week, I predicted that the level at 129.60 would operate as support in the USD/JPY currency pair, as it has previously performed as both support and resistance. Take note of how nicely these "role reversal" levels may function.

The H1 price chart below illustrates how the price rejected this level near the close of last Tuesday's Tokyo session (which may sometimes be a good time to begin Forex trades with the Japanese Yen) with a massive bullish engulfing candlestick, as shown by the up arrow.

Based on the scale of the entrance candlestick structure, this trade has been exceptionally successful, with a maximum positive reward-to-risk ratio of more than 9 to 1.

10-01-2023 07:01:03

Why Fx Traders Should Pay Close Attention To The Stock Market This Quarter

We all know that the forex and stock markets are linked, thus forex traders should keep a watch on what stocks are doing. However, there are a few situations this quarter that make this link much more evident. The stock market, particularly in the United States, may provide some clues as to what to expect in the currency markets.

What's going on?

To have a better grasp of the issue, keep in mind that bonds are one of the main ways the stock and currency markets are linked. When bond prices fall, for example, investors rush to purchase that currency. This raises the currency's value about other currencies. At the same time, investors are exiting the stock market to purchase bonds. This implies that the stock market will fall.

As a result, the traditional inverse link between currencies and the stock market exists. That doesn't always match up perfectly since it relies on why bond prices have fallen. Another important issue is risk sentiment. Because stocks are riskier, when there is a risk-off market, investors will exit the stock market and purchase bonds.

What is causing the underlying market to rise?

The problem is that the bond market is currently severely skewed, notably in the United States and Japan. This is because authorities have been meddling in the market over the previous few years. Almost all central banks and governments have done so, while some have done so more than others. As a result, there may be a disparity in currency reactions.

Governments released large quantities of debt in the form of bonds during covid. Due to supply and demand, this would generally cause interest rates to rise. However, central banks intervened by purchasing bonds in an attempt to drive interest rates lower. In the bond market, this creates an artificial scenario.

Following the distortion

Bond yields are naturally used to illustrate relative risk. That is, the greater the interest rate, the longer the bond period. This is known as the bond yield curve. However, central banks such as the BOJ and the BOE have intervened to "regulate" the yield curve. The US bond curve is "inverted," which means that short-term debt has a higher interest rate than long-term debt, reflecting central bank policy expectations.

Why it is significant

Investors will place their money where they feel the risk-reward ratio is the best. Bonds are less risky than stocks, thus the higher the interest rate, the greater the interest in selling equities. Investors have a distinct incentive structure if the central bank is manipulating the market. This can result in a stock market run-up while conditions aren't so excellent, such as in 2020-2021, followed by a stock market slump when things improve, such as in 2022.

As a result, central bank policy can trump economic facts. The Fed is anticipated to pause or cease raising interest rates this quarter. If the Fed maintains its current stance, the market's natural dynamics may resume. As a result, the stock market may resume its more traditional function of anticipating sentiment. This, in turn, offers insight into how much demand there is for bonds and whether a certain currency will gain or depreciate.

10-01-2023 09:01:05

Today In Forex: The Us Dollar Sees Optimism

US Dollar Today Forcast

The US Dollar began the week on the back foot as the safe-haven currency was pulled down by optimism. On the one hand, market participants analyzed US macroeconomic data released last Friday, which indicated that the Federal Reserve might decrease the rate of tightening.

According to San Francisco Fed President Mary Daly, 50 basis points (bps) or 25 basis points (bps) are on the table at the next meeting. Raphael Bostic, president of the Atlanta Federal Reserve Bank, stated that interest rates should climb to 5% or 5.25%. Both promised further rises to keep inflation in check before eventually pausing and holding for a while.

On the other hand, China announced the reopening of the three-year-old sea and land crossings with Hong Kong. Asian equities gained significantly, leading the way higher for their international counterparts. It's worth noting that Wall Street gave up much of its intraday gains before the close.

Despite weak Eurozone statistics, the EUR/USD touched 1.0760, retaining gains. GBP/USD is trading at 1.2200, profiting from the US Dollar weakening.

Commodity-linked currencies climbed early in the day, after spending the previous two sessions stabilizing near their daily tops versus the dollar. The AUD/USD pair is trading at 0.6930, while the USD/CAD pair is down to 1.3370.

The Japanese yen strengthened against the US dollar, falling to 131.50. Gold maintains its advances and is currently trading at $1,875 per troy ounce. However, crude oil prices ended the day barely altered, with WTI trading at $74.70 per barrel.

11-01-2023 07:01:51

Forex Today: The Wait For US Inflation Figures Continues

What you need to take care of on Wednesday, January 11:

The FX board witnessed minimal movement on Tuesday, owing to a light macroeconomic calendar and investors' need for clarification from central banks. US Federal Reserve Chairman Jerome Powell and his colleagues from Canada and Japan were on the lines, but only as part of a conference on central bank independence, so no new hints on monetary policy were provided.

The US Dollar rose during the first part of the day but finished mixed as Wall Street managed to recoup pre-opening losses and register a tiny gain. At the same time, the yield on US government bonds rose. Investors are hesitant to take significant risks ahead of the release of US inflation data next Thursday.

The EUR/USD pair is trading at 1.0740, while the GBP/USD is trading around 1.2160, down on the day. Commodity currencies have also weakened against the US dollar, with the AUD/USD trading at 0.6890 and the USD/CAD trading around 1.3420. Finally, the USD/JPY pair is trading slightly higher at around 132.20.

Gold is consolidating at $1,876 per troy ounce, while crude oil rose in the American afternoon. WTI closed at $75.20 per barrel.

The upcoming Asian session will be important in terms of macroeconomic data, as Australia will release the November Monthly Consumer Price Index, which is expected to be 7.3% YoY, up from 6.9% in October. In addition, Australia will release November Retail Sales, which are projected to have grown by 0.6% after decreasing by 0.2% the previous month. Finally, China will release the December Consumer Price Index (CPI) and the Producer Price Index (PPI) for the same month.

11-01-2023 12:01:36

EUR/JPY Forecast Today

At the moment, the EUR/JPY intraday bias is neutral. On the downside, a break below 140.15 minor support will revert the tilt to the 137.37 low. If this level is broken, the drop from 148.38 to 135.40 Fibonacci will resume. However, given the positive convergence situation in the 4-hour MACD, a breach of 142.92 suggests that the correction from 148.38 has been finished. The intraday tendency will go back to the upside towards the 146.71 barrier level.

In the wider picture, as long as the 55-week EMA (now at 138.64) holds, the greater uptrend from 114.42 (2020 low) to 149.76 long-term resistance will continue. However, a strong breach of the 55-week EMA will result in a further drop to the 38.2% retracement of 114.42 to 148.38 at 135.40. A sustained break there increases the likelihood of a trend reversal, with a 61.8% retracement at 127.39 being the objective.EUR/JPY Forecast Today

11-01-2023 08:01:57

As the NA Session Begins, the EUR is the strongest then CHF

In the North American Session

As the North American session begins, the EUR is the strongest and the CHF is the weakest. The USD is trending upward in the markets. Tomorrow, at 8:30 a.m. ET, the crucial US CPI report will be issued. This week, SF Fed President Mary Daly stated that it is all about CPI services less housing.

Today's oil inventory data will be closely watched by the markets. Late yesterday, private data was provided, revealing a massive 14M barrel spike, the greatest in two years. The EIA statistics will be available at 10:30 a.m. Despite the substantial increase in stockpiles, the price of crude oil has risen by roughly $0.59.

In other markets:

spot gold is near unchanged at $1876.50

spot silver is up $0.17 or 0.70% at $23.77

WTI crude oil is trading up $0.62 at $75.72

Bitcoin is trading at $17,422, which is down about $30 from the near 5 PM level yesterday

The NASDAQ index is up for the fourth straight day in the premarket for US stocks:

Dow Industrial Average is up 84 points after yesterday's 186.45-point rise

The S&P index is up 11 points after yesterday's 27.16-point rise

The NASDAQ index is up 31 points after yesterday's 108.98-point rise

In the European equity markets, the major issues also trading higher:

German DAX, +1.05%

France's CAC is up 0.97%

UK's FTSE 100 of 0.77%

Spain's Ibex is up 0.15%

Italy's FTSE MIB is up 0.54%

In the Asian-Pacific markets, the major indices were mixed:

Japan's Nikkei index +1.03%

Hang Seng index is up 0.49%

New Zealand's 50 Index -0.24%

Australia's S&P/ASX index +0.9%

Shanghai composite index -0.24%

In the US debt market, rates are trading lower after the 10-year yield rose by close to 10 basis points yesterday. At 1 p.m. ET today, the US Treasury will auction off tenure notes:

2 year 4.243%, -1.5 basis points

5 year 3.694% -3.8 basis points

10 year 3.574% -4.5 basis points

30-year 3.694% -610 basis points

12-01-2023 07:01:40

The Fact That The USD is Soon To Expire Does Not Bode Well For The Currency

What you need to take care of on 12/01/2023

For the second day in a row, market participants held their breath, with key pairs remaining at familiar levels. Tensions rose ahead of the December US Consumer Price Index (CPI), with the spotlight on central bank officials.

The European Central Bank (ECB) policymakers were mainly hawkish, which supported the EUR. Francois Villeroy de Galhau, governor of the French central bank, stated that the ECB should seek to reach the terminal rate by the summer, signaling that rates would have to be raised further in the following months.

Austria's central bank governor, Robert Holzmann, took a more aggressive position, stating that "rates will need to climb much higher to achieve levels that are sufficiently restrictive to enable a rapid return of inflation to goal."

Finally, he stated that it is too early to contemplate a potential terminal rate. Finally, ECB Governing Council member Olli Rehn stated that interest rates in the Eurozone will need to climb further in the next sessions and reach restrictive levels to reduce inflation.

Susan Collins, the Boston representative of the US Federal Reserve, backed modest rate rises. Collins stated that she believes a 25 basis point or 50 basis point increase would be appropriate, adding that she is leaning toward a 25 basis point increase at this time, but that it is extremely data-dependent.

The Kremlin reiterated that President Vladimir Putin is willing to engage in Ukraine, but that any agreement should be on Russian terms. A peaceful resolution to the crisis is still a long way off.

EUR/USD remains constant at 1.0750 for the second day in a row, while GBP/USD finished at 1.2140. The AUD/USD pair began the day on the back foot, but recovered and achieved a slight gain, trading just over the 0.6900 mark. The USD/CAD pair is trading around 1.3420, while the USD/JPY pair is at 132.40.

Gold reached a new eight-month high of $1,886.63 per troy ounce before reversing course ahead of Wall Street's opening, finishing the day with minor gains at approximately $1,877.00.

Crude oil prices rose on the back of a study from the US Energy Information Administration (EIA), which predicted that worldwide use of liquid fuels such as gasoline, diesel, and jet fuel would reach new highs in 2024. The headline concealed a significant increase in US stocks.

On Thursday, the focus will be on the US Consumer Price Index, which is expected to rise 6.5% year on year in December. The core reading is up 5.7%, down from 6% previously.

12-01-2023 11:01:42

USD/JPY Remains Weak Amid BOJ Concerns

In case you missed it, Eamonn had the following news earlier today, which helped to push the yen higher in trading:

This just adds to the bond market's pressure, with 10-year Japanese government bond rates remaining near the 0.50% level since the end of last week. To summarise, there is rising concern and anticipation that the BOJ may deliver another surprise or will gradually begin to alter policy later this year.

The previous report today casts some doubt on next week's policy meeting, at which the BOJ is expected to lift inflation estimates - especially after Tokyo CPI rose to its highest level since April 1982, keeping over the central bank's 2% target for the seventh month in a row.

Since the collapse last week, we've seen pricing move toward the lower end of its recent consolidation. There have been oscillations in and around its 100-hour (red line) and 200-hour (blue line) moving averages, but the pair stays more contained between crucial support around 130.00 and daily resistance around 134.45-50 as well as the 135.00 level in the larger picture.

As we await the US CPI statistics later today and the BOJ policy meeting decision next week, these will continue to define and restrict risks for both buyers and sellers.

In the case of the latter, investors may be dissatisfied with the central bank's lack of action following last month's policy change. But, given how things are gradually setting up for such an occurrence, I don't anticipate the yen to fall very much.


12-01-2023 04:01:19

USD/JPY Forecast

The concern at this point is whether the market will continue to see interest rates climb, forcing the Bank of Japan to create more yen.

  • The USD/JPY rose marginally during Wednesday's trading session as we continue to try to establish a base against the Japanese yen.
  • The Consumer Price Index figures are due out on Thursday, and they will have a significant impact on what the bond market believes the Federal Reserve will do.
  • As the Bank of Japan has instituted yield curve management, this will have a significant impact on what occurs in this market.
  • This is, of course, a reference to the Bank of Japan's declaration that it is willing to buy "infinite bonds" to keep the 10-year interest rate below 50 basis points.

However, they began this program with a yield curve control of 25 basis points on the same 10-year interest rate, so they have already caved a little. This is one of the factors that contributed to the Japanese yen's annihilation last year. The concern at this point is whether the market will continue to see interest rates climb, forcing the Bank of Japan to create more yen.

The 200-Day EMA is an indicator that many people pay close attention to. I suppose you could make an argument at this time that the 50-Day EMA contracting and dropping near the 200-Day EMA has some investors thinking about longer-term selling.

 If global interest rates remain stable, the Japanese may be granted some relief in this situation. I believe we are in a scenario where a difficult couple of days are more likely than not. After all, the Consumer Price Index is due out on Thursday; if it comes in hotter than expected, this market might swiftly go into the 200-Day EMA above.

On the downside, the 130 level appears to be the core of substantial support, so at this time, I believe we are attempting to determine whether the market has retreated sufficiently to make the long side appealing again. The following few weeks should provide some clarity, but the next few days will most likely be more chop than anything else.

13-01-2023 08:01:00

Asia Market Open Highlights

Everyone in the same boat limits the bounce

Asian equities mostly began higher, benefiting from lessening inflationary pressures in the United States and hopes that central banks will decrease the pace of interest rate rises.

The lack of a dramatic stock market rebound is most likely due to everyone being in the same reduced inflation boat. Nonetheless, investors are growing increasingly anxious about the impact on corporate America and the extent of the economic cratering caused by the Fed's aggressive rate rise approach. While a large negative miss on CPI may have led to a bias toward considerably more euphoric markets, the inline data nevertheless has investors perplexed.

Not to mention the genuine fear in certain quarters that inflation may stage a comeback owing to the strength of the US labor market. Indeed, this scenario highlights a fundamental feature that might result in the Fed keeping rates higher for longer in 2023 than many expect.

In Japan, stocks are mixed, with the Nikkei 225 down and the wider TOPIX index little changed as the outlook for exporters dims due to the yen's rise.

Forex

With the substantial declines in bond and market volatility, the dollar is no longer required as a haven; hence, the efficiency of dollar cash as a risk-off hedge is decreasing, which might start a larger unwind of USD holdings on its own.

Stoxx 600 equity inflow trackers reveal a fresh spike as investors become more confident about growth outside of the US, resulting in a better corporate profit situation in Europe. The restoration of long-only investor flow in USD is critical to pushing the EURUSD higher.

IMM positioning should dissuade people from estimating the probable size of dollar fluctuations. It is actual money and corporate USD currency cash that matters, i.e., the proverbial dry powder on the sidelines, which is not represented in positioning surveys.

13-01-2023 01:01:07

The USD is under more pressure from yesterday's CPI data

The US CPI data came in within forecasts as the statistics met expectations, leaving global markets unsure of what to do next. The dollar swung back and forth not just in the immediate aftermath, but even before traders and investors looked between the lines to interpret the data as being on the weaker side.

If you're trading on the data, that'll be a big killer because the market was a little unsure an hour or so following the main risk event.

However, the dollar eventually fell as expectations of a more aggressive Fed were reduced, with some market participants now expecting a 25 basis point rate rise next.

In my opinion, the two most important charts for the dollar right now are those against the euro and the yen.

In the case of the EUR/USD, the move yesterday validated the break over the previous resistance of 1.0700, with buyers now taking out 1.0800.

This opens the way to the 50.0 Fib retracement level of the swing lower from 2021, which is expected at 1.0942 next. All of this is before we get to the next significant psychological barrier level of 1.1000, which many market participants are pinning today following yesterday.

The USD/JPY then saw a significant collapse, falling from 130.00 to its lowest level since 1 June. However, the move is partly influenced by recent BOJ conjecture, and I would argue that it was not so much the CPI data that produced such ripples in the pair yesterday.

The bearish momentum was mostly carried over from Asia, where there is growing concern that the BOJ may attempt to further adjust or at least hint at a policy shift at its meeting next week.

In any event, a break below 130.00 puts sellers in an excellent position to pursue a further negative break towards the May lows around 126.55-65, with the 125.00 mark a critical level to watch.

13-01-2023 05:01:00

GBPUSD Trend today

The GBPUSD pair crawls upwards in an attempt to resume the main bullish trend, to keep the positive scenario valid for today supported by the EMA50, waiting to visit 1.2440 as the next main target, reminding you that it is important to hold above 1.2120 to continue the expected rise.

The expected trading range for today is between 1.2100 support and 1.2290 resistance.

The expected trend for today: Bullish

13-01-2023 08:01:00

GBP/USD PRICE & ANALYSIS

The British Pound climbed versus the US Dollar on Friday, thanks to more benign inflation figures from the world's largest economy and some unexpected domestic growth.

According to official statistics released on Thursday, price increases in the United States slowed for the sixth consecutive month in December. This has traders and investors more confident than ever that the majority of interest rate hikes are now behind them and that, while more are possible, the pace will reduce.

This viewpoint contrasts with that of many other developed countries, particularly those more vulnerable to price increases connected to the Ukraine conflict, such as the Eurozone. Rates are expected to climb further there, and the euro and sterling also surged following the US data.

GROWTH MANAGEMENT IN THE UK SURPRISE ON THE INSIDE

The pound had some rare domestic happiness Friday when it was revealed that its economy expanded by a whisker in November. Gross Domestic Product Growth was 0.1% while markets expected a 0.2% decrease. However, when manufacturing and industrial production fell short of expectations, the champagne may be safely placed on ice. The UK economy does not appear to be ready for considerably higher borrowing rates, and interest rate support for the sterling is likely to remain erratic as economic data becomes available.

Continued bad labor relations and the threat of recession, probably accompanied by some stagflation,' will keep the Pound a worried bullish bet. The Bank of England's next policy decision will not be made until February 2.

However, London-listed companies have gained with global rivals in anticipation that the US rate-hike cycle is coming to an end. On Friday, the blue-chip FTSE 100 index approached all-time highs. The extent to which this index constitutes a gamble on the UK economy is controversial, considering the amount of significant multinational brands that comprise it.

 all-time highs. The extent to which this index constitutes a gamble on the UK economy is controversial, considering the amount of significant multinational brands that comprise it.

TECHNICAL ANALYSIS OF THE GBP/USD

The daily chart shows that, even though GBP/USD dropped decisively below its previously-dominant uptrend channel on December 15, the bulls kept a considerable degree of influence.

Sterling's fortunes have improved since that day, with an increase this week. While GBP/USD is now supported, the pound appears to be a bit stretched at current levels, and some consolidation may be required before it can push meaningfully higher and reclaim those mid-December heights.

For the time being, support appears to be in a zone between the psychological 1.2000 level and 1.2120. Between December 22 and January 3, the market moved tightly inside this band. The pound's ability to maintain above or within this range as the weekends might be a key indicator for any near-term aim at its recent highs.

According to IG's client sentiment index, the market is now net short of GBP/USD, albeit by a small margin, with respondents reporting a 53%/47% split.

14-01-2023 07:01:29

USDJPY Forecast For 13.01.2023–20.01.2023

Short positions from corrections below 132.88 with a target of 125.35 - 121.52 are considered in the main scenario.

Alternative scenario: a breakthrough and stabilization above 132.88 will allow the pair to continue advancing to levels between 138.24 and 140.57.

On the daily chart, the upward third wave of a more considerable degree (3) has finished developing, with wave 5 of (3) forming as part of it. On the H4 chart, a descending correction looks to be growing as the fourth wave (4), with wave C of (4) forming as part of it.

On the H1 chart, the third wave of more minor degree iii of C looks to have begun to form, with wave (iii) of iii of C forming inside. If this assumption holds, the pair will continue to fall to 125.35 - 121.52. In this scenario, the level of 132.88 is significant since a break will allow the pair to continue rising to levels of 138.24 - 140.57.

14-01-2023 01:01:21

India's Forex Reserves Fell By USD 1.268 Billion to USD 561.583 Billion

The Reserve Bank of India reported that India's currency reserves fell by USD 1.268 billion to USD 561.583 billion in the week ending January 6. Following two weeks of decline, total reserves climbed by USD 44 million to USD 562.851 billion in the preceding reporting week. The country's foreign exchange reserves hit an all-time high of USD 645 billion in October 2021.

The reserves have been dwindling as the central bank utilized them to safeguard the currency against global market pressures. According to the RBI's Weekly Statistical Supplement, foreign currency assets (FCA), a major component of overall reserves, fell by USD 1.747 billion to USD 496.441 billion during the week ending January 6.

Foreign exchange reserves are assets in foreign currencies kept in reserve by a central bank, such as bonds, treasury bills, and other government securities. It is important to highlight that the vast bulk of foreign exchange reserves is stored in US dollars.

India's foreign exchange reserves comprise the following:

  • Foreign Currency Holdings
  • Reserves of gold
  • SDRs are Special Drawing Rights (SDR)
  • International Monetary Fund reserve position (IMF)

The effect of appreciation or depreciation of non-US units such as the euro, pound, and yen held in foreign exchange reserves is included in the foreign currency assets.

The value of gold reserves rose from USD 461 million to USD 41.784 billion. The Special Drawing Rights (SDRs) increased by USD 35 million to USD 18.217 billion, according to the apex bank. The country's reserve position with the International Monetary Fund (IMF) fell by USD 18 million in the reporting week to USD 5.141 billion, according to the statistics.

14-01-2023 09:01:43

Forex Weekly Forecast (January 16 – 20, 2023)

The EURUSD, GBPUSD, USDJPY, USDCAD, and S&P 500 are the subject of today's weekly Forex prediction (SPX500). We have some amazing technicals in the works for next week, including USDCAD support in July 2021 and an all-time high trend line for the S& P 500.

EURUSD Forecast

Last week, the EURUSD burst out, eventually closing above the 1.0700 range high. On Thursday, the euro broke through 1.0780 and found support there on Friday. So, next week, keep an eye on that crucial level. As long as the EURUSD closes above 1.0780 daily, the pair appears to be rather optimistic.

However, as indicated in today's video, the weekly time frame provides a strong barrier for bulls next week at 1.0870. That is the December 2016 weekly trend line. So a daily close above that will be required to open up additional levels, including perhaps 1.1120. Given the foregoing, waiting for a close above 1.0870 or below 1.0780 before acting isn't a terrible idea.

GBPUSD Forecast

GBPUSD has recently been a volatile market. On the one hand, the short-term uptrend that has been in place since September remains intact, thus longs appear logical.

On the other hand, the GBPUSD has been trading sideways for weeks, making it a tough pair to trade. With that in mind, I'll be watching two important stages this week. The first is the upward trend line from the closing on September 26th. This week, that level is expected to be about 1.2030.

The second resistance level I'm keeping an eye on is 1.2300. In mid-December, GBPUSD failed to hold above this level, resulting in a bearish fakeout.
Any retest of 1.2300 is thus bearish unless bulls accomplish a daily closing above it.

USDJPY Forecast

Thursday confirmed the breach, and Friday came dangerously close to testing 126.70 support. However, the issue for traders is that the USDJPY has yet to revisit 130.60 as fresh resistance. Given that it is the swing low for May 2022, the 126.70 regions should provide support if touched this week.

A rebound from there might push USDJPY back to the resistance confluence at 130.60. Given the classic technicals, USDJPY is on my watch list regardless of the short-term activity.

USDCAD Forecast

Given that it is the trend line from July 2021, the 1.3300 area is likely to draw buyers if tested this week. Not only that, but the level has had a significant impact since its inception in September 2021.

Positive market movement from 1.3300 would take USDCAD higher, maybe back to 1.3570. A close below 1.3300, on the other hand, would open the door to lower levels such as 1.3320 and potentially 1.3020.

S&P 500 (SPX500) Forecast

The SPX (S& P 500 futures) is reaching major resistance. The trend line from the all-time high is at 4,020 and will be a factor this week. A retest of 4,020 will almost certainly generate selling pressure. Will bulls finally have a daily close above it, or will it cause a bearish reversal like it has for months?

A daily close below 4,020 would confirm the break and reveal 4,140, while a daily close above that line would confirm the break and expose 4,140. Although it is not obvious from the daily time frame, 4,140 is a significant monthly level for SPX. The key support level for the S& P 500 is 3,910.

15-01-2023 08:01:03

Forex Suggest Identifies Cryptocurrency Acceptance Markets

Despite ongoing market volatility and the spectacular decline of some of the industry's largest exchanges, the cryptocurrency industry continues to captivate users as the most recent way to pay. But where in the world is that enslavement less a pipe dream and more of a reality? According to the most recent Forex Suggest data, the United States, the United Kingdom, and Canada are the world's top destinations for accepting cryptocurrency payments. The United States currently has 127 crypto-accepting businesses, accounting for nearly half of the global total. The United Kingdom trailed behind with 28 crypto-capable devices, followed by Canada with 12. The integration of commerce platform Primer with Coinbase in October 2022 to enable merchants to accept digital currency as payment is one example of the US's successful track record in cryptocurrency payments. Similarly, tech behemoths Microsoft and PayPal have made significant progress in the space, with major investments announced throughout last year. Open a store In terms of the environments in which cryptocurrency is spent, Forex Suggest believes that e-commerce is the most important industry for cryptocurrency acceptance. Rakuten, Shopify, and Overstock are all highlighted as examples of the 30 e-commerce businesses with crypto-friendly checkouts in this category.

Following e-commerce is the travel industry, which ranks 26th, and internet services, which ranks 24th. Expedia, for example, accepts Bitcoin as payment for hotel reservations, and many airlines, including AirBaltic, LOT Polish Airlines, and Norwegian Air, have begun accepting cryptocurrency payments. Similarly, the food and beverage and retail industries each have 23 businesses accepting cryptocurrency, followed by charity and gambling, which have 19 and 15 businesses accepting cryptocurrency, respectively. Sports organizations are also becoming more crypto-friendly. According to the data, the United States has the most sports teams that accept cryptocurrency, with seven out of ten. Senator is also in the leading region.


16-01-2023 12:01:06

NZD/USD Technical Analysis

The New Zealand Dollar edged higher on Monday as investors continued to bet that the US Federal Reserve will scale back the size and pace of its interest rate hikes at its policy meeting on January 31-February 1. This would weaken the US dollar while strengthening commodity-linked currencies such as the New Zealand dollar.

This viewpoint is supported by the December CPI report, which showed that prices fell 0.1% over November. In comparison to the previous year, prices increased at a 6.5% annual rate.

Furthermore, economic data from the University of Michigan's consumer sentiment survey showed that the one-year inflation outlook had dropped to 4% on Friday. This was the third consecutive monthly decline and the lowest level since April 20, 2021.

The NZD/USD is trading at.6408, up 0.0024 or +0.37% at 01:58 GMT.

Goldman Sachs strategists agreed with the idea of a less hawkish Federal Reserve. They believe the December inflation data sealed the deal on a shift to 25 basis point hikes in February, but they caution that it is too early in the process for central banks to declare victory.

Daily Swing Chart Technical Analysis

According to the daily swing chart, the main trend is up. A trade through.6417 will signal the resumption of the uptrend. A break of.6191 shifts the main trend to the downside.

The minor trend is also upward. A trade through.6322 shifts the minor trend to the downside. This will also shift momentum to the downside.

The nearest support is a minor pivot at.6372. The nearest resistance is a long-term 50% level at.6467.

Daily Swing Chart Technical Forecast

The reaction of traders to the minor pivot at.6372 will most likely determine the direction of the NZD/USD on Monday.

Bullish Scenario

A sustained move above.6373 signals the presence of buyers. Taking out.6417 restores the uptrend, with the long-term 50% level at.6467 as the next target. By passing this level, the Kiwi will be in a position to challenge the main top at.6514.

Bearish Hypothesis

A sustained move below.6372 indicates the presence of sellers. The minor bottom at.6322 is the first target. If this level is breached, it indicates that the selling is intensifying. This could cause a surge to the long-term Fibonacci level of.6231. This is the last support before the main bottom at.6191.

16-01-2023 04:01:40

GBP/USD Forex Signal

Bullish view

Buy the GBP/USD pair and set a take-profit at 1.2300.

Add a stop-loss at 1.2100.

Timeline: 1-2 days.

Bearish view

Set a sell-stop at 1.2180 and a take-profit at 1.2050.

Add a stop-loss at 1.2250.

The GBP/USD forex rate has been rising in recent days as investors digested important economic data. It reached a high of 1.2242 last week, the highest since December 19. As the US dollar index fell from $115 in 2022 to $102, the pair has been strongly bullish.

Inflation and retail sales figures for the United Kingdom

The GBP/USD exchange rate rose after the United States released its inflation data last Thursday. According to the Bureau of Labor Statistics (BLS), the country's inflation continued to fall in December. It has fallen for six months in a row, and some analysts are concerned about the possibility of deflation in the United States as the economy undergoes significant change.

Inventories remain high amid recessionary fears. Despite recent positive data, including employment, some economists believe the US economy will contract in 2023. According to a Wall Street Journal poll of economists, the likelihood of a recession has risen to 61%. Top Wall Street banks' financial results indicated that they expected a mild recession.

The GBP/USD pair rose after the release of the most recent UK GDP data on Friday. These figures showed that the economy eked out a small gain in November, defying analyst expectations. It grew by 0.1% in November, beating expectations of a 0.2% contraction. In the third quarter, the economy shrank by 0.3%.

The GBP/USD exchange rate will react to upcoming UK economic data. The Bureau of Labor Statistics (BLS) will release the most recent job figures on Tuesday. On Tuesday, the latest UK inflation figures will be released. Economists predict that inflation will fall slightly in December, as it did in the United States.

Forecast for the GBP/USD

The GBP/USD has been rising in recent days. It has managed to move above the 25-day and 50-day moving averages during this time. It also rose slightly above the key resistance level of 1.2200, which was the highest point on January 9. The pair also passed above the upper side of the descending channel and the Ichimoku cloud.

As a result, the pair is likely to see a bullish breakout this week as the UK releases important economic data. If this occurs, the pair is likely to continue rising as buyers aim for the key resistance level of 1.2300

17-01-2023 07:01:33

The US Dollar benefits little from dull trading.

The US dollar began the week where it left off the previous one, easing across the board. Market participants were still upbeat about easing US price pressures and the possibility of a US Federal Reserve monetary policy pivot in the near future. 

However, optimism faded at the start of a quiet week, with US markets closed for the Martin Luther King holiday. The US dollar managed to recover ahead of the daily close, but it ended the day with modest gains against most major rivals, and it remains vulnerable to further declines.

The main focus was on Japan Government Bonds (JGBs), as the 10-year note's yield jumped to 0.52%, pushing it to the upper end of the Bank of Japan's range. 

The Bank of Japan is holding a monetary policy meeting this week, and rising yields have fueled speculation that policymakers will finally change their monetary policy. 

Governor Haruhiko Kuroda's term expires in April, and speculation suggests that he will make changes to the ultra-loose policy before leaving. Masayoshi Amamiya, Deputy Chief of the BoJ, is the leading candidate for the next governor.

According to the Bank of Canada Consumer Survey, expectations for 1-year ahead inflation increased to a record 7.18% from 7.11% in the third quarter, while expectations for 2-year ahead inflation fell to 5.14% from 5.22% in the third quarter.

The EUR/USD pair is trading near 1.0815, while the GBP/USD pair is trading a few pips below 1.2200. The AUD/USD pair briefly traded above the 0.7000 level before settling at around 0.6950, while the USD/CAD pair oscillates around 1.3400. The USD/JPY pair has recovered from a new multi-month low of 127.21 and is now trading at 128.50.

Gold maintains its $1,900 level, now settling at $1,914, while crude oil prices fell, with WTI settling at $79.12 per barrel.

17-01-2023 02:01:07

EUR/USD Forex Signal: Forming of a Small Double-Top Pattern

As signs of a divergence between the Federal Reserve and the European Central Bank (ECB) emerged, the EUR/USD pair has been strongly bullish.

Bearish outlook

Set a take-profit of 1.0717 on the EUR/USD pair.

Put a stop-loss order at 1.0850.

Time frame: 1-2 days.

Bullish outlook

Set a take-profit of 1.0900 on the EUR/USD pair.

Put a stop-loss order at 1.0750.

The EUR/USD exchange rate fell slightly in low volume as the market awaited important economic data from the United States and Europe. It fell to 1.0816, just a few points below its peak for the month. After falling below parity in 2022, the pair has been on a strong uptrend.

Divergence between the Fed and the ECB?

As signs of a divergence between the Federal Reserve and the European Central Bank (ECB) emerged, the EUR/USD pair has been strongly bullish. The United States has produced several positive numbers, implying that the Fed will continue its pivot in the coming months. Inflation has fallen for six months in a row, and the unemployment rate has fallen to 3.5%.

European inflation, on the other hand, remains elevated. Inflation remains close to 10%, according to data released earlier this month. As a result, ING analysts believe the bank will raise rates by 125 basis points in the first half of the year. It will then maintain rates at that level until 2024.

Their viewpoint supported what the governor of the Finnish central bank said last week. He believes that the ECB should continue to raise interest rates.

As a result, ING analysts decided to revise their euro forecast. After being bearish for a while, they now believe the pair will remain bullish this year. They cited interest rate differentials or spreads between the United States and Europe, as well as the bloc's improving fundamentals.

Recent data and news indicate that Europe will avoid the recession that most analysts predicted. The energy shock that most people expected did not occur because Europe had enough natural gas in storage.

At the same time, winter was much warmer than expected, and LNG flows from the US and other sources have increased dramatically in recent months.

Forecast for the EUR/USD

In recent weeks, the EUR/USD pair has been in a bullish trend. This week's rally faded as the pair formed a small double-top pattern. This pattern is typically interpreted as a bearish sign in price action analysis. In addition, the pair remained slightly above the 25-day and 50-day moving averages. It is also slightly above the key resistance level of 1.0718, which was the highest on December 30.

As a result, the pair is likely to retreat slightly and retest the key support level of 1.0717. This trade's stop-loss will be set at 1.085.

18-01-2023 07:01:22

FOREX-Dollar Steady, yen Falls as Traders Await the Bank of Japan's Policy Decision

The US dollar held steady on Wednesday, while the yen fell as investors awaited the Bank of Japan's policy decision, which could signal the end of Tokyo's ultra-easy monetary policy.

Last month, the central bank surprised the market by raising its 10-year yield cap to 0.5% from 0.25%, effectively doubling the range it would allow above or below its target of zero. Since then, speculation has swirled that the BOJ's yield curve control (YCC) policy would be tweaked further.

The Japanese yen fell 0.56% against the US dollar on Wednesday, closing at 128.83 per dollar, down from a seven-month high of 127.25 on Monday. The dollar index, which compares the safe-haven currency to six others, was unchanged at 102.400.

According to Kristina Clifton, senior economist and senior currency strategist at Commonwealth Bank of Australia, the meeting is likely to cause significant volatility in currency markets, with a dovish stance causing the dollar/yen to rise by 2-5 yen.

"By contrast, any policy change may be interpreted by markets as a step toward policy normalisation, pulling the dollar/yen lower, potentially sharply lower," Clifton said.

The 10-year yield on Japanese government bond breached the BOJ's ceiling for three straight sessions to Tuesday, leading to a wave of emergency bond buying by the government.

Some investors believe the BOJ will be forced to adjust, or even dismantle, YCC as soon as this week because the central bank will be unable to sustain the massive volume of bond buying required to defend the cap.

"The pressure on the JGB market in recent weeks, combined with the prospect of rising Japanese inflation, leads us to conclude that the BOJ will deliver a strong signal that the end of YCC is near," said Rodrigo Catril, a strategist at National Australia Bank in Sydney.

"If the Bank maintains its YCC band, this is likely to be accompanied by a commitment to purchase more JGBs, but given market pressure, we suspect that the Bank will have to give a strong signal that a policy shift is imminent."

Meanwhile, the pound was last trading at $1.2274, down 0.11% on the day, while the euro fell 0.03% to $1.0785.

The Australian dollar fell 0.04% to $0.698, while the New Zealand dollar rose 0.03% to $0.643.

18-01-2023 02:01:44

The upside in EUR/USD has become more limited

Bond yields on both sides of the Atlantic rose a few basis points before being halted by separate news reports. The culprit in the United States was a terrible Empire manufacturing, which fell to its lowest level since mid-2020 due to a drop in new orders and stalled hiring. US short-term yields finished the day 2-2.8 basis points lower.

Yields at the long end of the curve returned to intraday lows following the release, but eventually closed 4 to 5 basis points higher. On European soil, a Bloomberg story was responsible for German yields falling between 5.6 basis points (30y) and 10.9 basis points (2y), outperforming swaps by 1 to 2 basis points. According to news agency sources, ECB policymakers are considering a slower pace of rate hikes beginning with the March meeting.

A 50 basis point move in February is still considered most likely. They added that a slowdown in tightening should not be interpreted as the ECB abandoning its mandate. However, if that is the case, it is a less hawkish stance than President Lagarde outlined at the December meeting.

The euro paid in cash. The EUR/USD retreated from recent highs around 1.087 and fell to 1.078, even as the dollar itself traded unconvincingly. The DXY (trade-weighted dollar) continued to fall, but only so far. The EUR/GBP fell below 0.88, with a smidgeon of sterling strength present. It came after a solid labour market report, with near-record wage growth, keeping the pressure on the Bank of England.

This morning, the Bank of Japan held a closely watched meeting, but the mountain produced a mouse. It held rates steady at -0.1% and adhered to its YCC programme, which kept the 10y fixed at 0% with a 50 bps range. Given the ongoing inflationary and market pressures, some expected the BoJ to widen the allowed deviation even further.

The Bank of Japan raised its inflation forecast for the end of the horizon to 1.8%, with risks tilted to the upside, but clearly considered it insufficient for further policy changes.

As bets on a hawkish twist unwind, the yen takes a beating. The USD/JPY has risen from 128.12 to 130.75. However, Japanese equities are the standout performer, accounting for 2.5% of the total.

Bond yields in the area are down 4-11.1 basis points, with the 10-year yield leading the way. Moves spread to US Treasuries. Cash yields fall by 2.7-6.6 basis points.

Retail sales in the United States are due later today. They are expected to have fallen further m/m in December. Given yesterday's disappointing Empire manufacturing and general sentiment vs central banks following the ECB and BoJ news, there's probably more room for a US/core bond yield reaction in the event of a negative surprise.

In such a case, the dollar could remain under pressure, but with yesterday's Bloomberg story, EUR/upside USD's became more limited. 1.0942 became more powerful as a resistance. Following a CPI beat, the pound has extended its gains this morning.

Although headline inflation fell from 10.7% to 10.5%, monthly dynamics were stronger than expected (0.4% m/m vs 0.3%). Furthermore, core price growth remained stable at 6.3%, defying expectations for a drop to 6.2%. EUR/GBP falls towards 0.8769. The first significant support comes in at 0.8721.

Headlines in the News

At the World Economic Forum in Davos, IMF deputy managing director Gopinath subtly changed the organization's rather pessimistic outlook.

In a recent speech in New York, IMF managing director Georgieva warned that a third of the global economy will be in recession this year, calling 2023 a "tougher" year than 2022.

Gopinath continued to refer to the year as "tough," with inflation remaining too high and central banks remaining on course with interest rates to combat the problem, but she also emphasised an expected improvement in the second half of the year, stretching into 2024.

Lower energy prices and the reopening of the Chinese economy triggered an extremely bullish start to the year, with markets split on the central bank part of the story. In an interview with Bloomberg, German Chancellor Scholz expressed optimism by declaring that Germany will enter a recession.

In a statement, Slovakia's interim Prime Minister Heger stated that snap elections in the fall appear to be the most realistic scenario at the moment. Regular elections were set for February 20, 2024. Heger's administration fell apart in December. Attempts to gain a majority since losing the no-confidence vote have failed: "With today, I consider all attempts to establish a new 76 (majority) to be closed," he said. To call snap elections, parliament's term must be reduced, which could happen at next week's opening session (Jan 24).

18-01-2023 07:01:31

Technical Analysis of the GBP/USD: Nearest Selling Levels

Since the start of this week's trading, the GBP/USD pair has been dominated by bullish performance, with gains towards the 1.2300 resistance level. At the time of writing the analysis, it is stable near it. This comes as investors have abandoned the US dollar following the recent announcement of lower US inflation figures.

In contrast, the British economy added more jobs than expected in November, while wages grew faster than expected, keeping the Bank of England under pressure to keep raising interest rates.

As a result, the British pound rose after the Office for National Statistics reported a 27 thousand job increase in the three months to November, which was unchanged from the previous month but higher than expectations for a 5 thousand decrease.

The unemployment rate in the country remained unchanged at 3.7%, while the number of people receiving non-work benefits increased by 19.7 thousand, less than the 19.8 thousand expected by markets.

The pound is rising in value.

Despite six consecutive quarterly declines, the number of job vacancies remains at historically high levels, indicating that the labor market remains historically "tight" and consistent with persistent wage inflationary pressures, according to the Office for National Statistics. This confirms the Bank of England's ability to raise interest rates, thereby supporting the pound sterling. At the time of writing, the market reaction was largely consistent with this theme.

Money market traders are increasing their bets on a BoE rate hike following Wednesday's inflation report, which highlighted near-record UK wage growth. They increased their bets by 6 basis points, predicting a bank rate of 4.56% by September, the highest level in nearly a week.

Two-year US Treasury yields, which are among the most sensitive to monetary policy changes, rose 5 basis points to a two-week high of 3.57%. The pound was set to finish at a five-week high.

Gas prices have dropped by more than 80% since last year's record high, and headline inflation is expected to slow to 10.5% in December, the first decline since the pandemic began in 2020. While policymakers in the United Kingdom slowed the pace, Governor Andrew Bailey warned that the risks to the inflation outlook remain tilted to the upside after tightening to 50 basis points last month.

GBP/USD analysis today:

The price of the GBP/USD pair is currently on an upward trend.

Moving toward the 1.2330 resistance level will confirm this and push the technical indicators into overbought territory.

Despite easing expectations about the future of the Fed's policy, I continue to prefer selling the Sterling Dollar at any bullish level. This is offset by pessimistic forecasts for the British economy's recovery.

However, based on past performance, a move toward the 1.2095 support level will signal the end of the current bullish trend. The sterling-dollar pair will be influenced today by the release of British inflation figures, followed by the release of US economic data, the producer price index, and retail sales figures.

19-01-2023 07:01:43

The FOREX-Dollar rises on haven bids, while the yen regains ground.

The dollar rose broadly on Thursday as investors increased their bets that the Bank of Japan would abandon its yield curve control policy, while the yen rose as investors increased their bets that the Bank of Japan would abandon its yield curve control policy. Weak data from the United States released on Wednesday showed that retail sales fell by the most in a year in December, and manufacturing output fell by the most in nearly two years, fueling fears that the world's largest economy is heading for a recession.

The dollar rose broadly on Thursday as investors increased their bets that the Bank of Japan would abandon its yield curve control policy, while the yen rose as investors increased their bets that the Bank of Japan would abandon its yield curve control policy.

Weak data from the United States released on Wednesday showed that retail sales fell by the most in a year in December, and manufacturing output fell by the most in nearly two years, fueling fears that the world's largest economy is heading for a recession. "Those weak data reinforced market concerns about an impending US recession... (which) supported the dollar, and I believe that will become a growing narrative in the coming months," Carol Kong, a currency strategist at Commonwealth Bank of Australia.

The pound fell 0.17% to $1.2327, moving away from the previous session's one-month high of $1.2435, while the Australian dollar fell 0.49% to $0.6907, following a 0.64% loss on Wednesday. The euro fell 0.02% to $1.0792, still a long way from Wednesday's nine-month high of $1.08875, even as French central bank chief Francois Villeroy de Galhau maintained a hawkish stance on the European Central Bank's rate-hike path.

The fresh wave of risk aversion, exacerbated by news of job cuts at tech behemoths Microsoft and Amazon, kept the dollar bid. "The effects of the FOMC tightening will become increasingly visible," Kong predicted.

However, the dollar failed to gain ground against the Japanese yen, closing 0.4% lower at 128.42 yen, undoing much of the previous day's rally in the immediate aftermath of the BOJ's decision to maintain its ultra-easy monetary policy. In defiance of market expectations, the BOJ maintained its interest rate targets and yield band, instead devising a new weapon to prevent long-term rates from rising too much, in a show of resolve to maintain its YCC policy for the time being.

Following the decision, the yen fell 2% against the dollar and other currencies, as did Japanese government bond yields, which fell the most in two decades at one point on Wednesday. The euro was last 0.39% lower at 138.58 yen, while sterling fell 0.23% to 158.27 yen, as markets continued to test the resolve of the BOJ's ultra-dovish stance.

"I think it reflects the fact that market participants are still speculating on a change in the Bank of Japan's policy despite their inaction yesterday," CBA's Kong explained. "While there are still high expectations for a policy shift... I believe the yen will remain fairly elevated in the near term." In other news, the New Zealand dollar fell 0.31% to $0.6425. New Zealand Prime Minister Jacinda Ardern said in a televised statement on Thursday that she will not run for re-election and will step down no later than early February.

The US dollar index rose 0.09% to 102. The 42 against a basket of currencies.

19-01-2023 01:01:51

Bearish Breakdown in the AUD/USD Forex Pair

The Australian Dollar is extremely weak, but it is unlikely to fall much further against the US Dollar today.

My previous signal on January 12th did not trigger because there were no valid reversals at the first touches of any of the support or resistance levels that day.

Short Trade Ideas 

  • Short after a bearish price action reversal on the H1 time frame, on the next touch of $0.6953 or $0.6993.
  • Set the stop loss one pip above the current swing high.
  • Once the trade is 20 pips in profit, adjust the stop loss to break even.
  • When the price reaches 20 pips in profit, take 50% of the position as profit and leave the rest of the position to run.

Long Trade Ideas 

  • Long after a bullish price action reversal on the H1 time frame and the next touches of $0.6845, $0.6790, and $0.6723.
  • Set the stop loss one pip below the current swing low.
  • Once the trade is 20 pips in profit, adjust the stop loss to break even.
  • When the price reaches 20 pips in profit, take 50% of the position as profit and leave the rest of the position to run.

The best way to spot a classic "price action reversal" is for an hourly candle to close with a higher close, such as a pin bar, doji, outside candle, or even just an engulfing candle. You can profit from these levels or zones by observing the price action that occurs at the specified levels.

AUD/USD Analysis 

In my previous forecast, I stated that the AUD/USD currency pair was trapped between $0.6845 and $0.6953, but that if new US CPI data showed a drop to 6.5% or lower, we would almost certainly see a rise to $0.6953 and potentially a bullish breakout beyond that level, which could be significant.

This was a good call because when the CPI data came in at 6.5%, the price immediately rose above $0.6953, and then fell back to exceed that level over the next few days.

Yesterday, the price reached a multi-month high of $0.7063 before plummeting precipitously. This bearish breakdown is significant and could be significant.

The price chart below shows that the price has returned to a zone of safety, the recent zone of consolidation below the resistance level at $0.6918. The technical outlook is bearish as long as the price remains below that level, but how much further the price can fall is unknown because there is a lot of consolidation and support above the support level at $0.6845, which will likely keep the price up for the time being.

The Australian Dollar is currently in the spotlight because it is the weakest major currency. This drop appears to be unrelated to anything happening in Australia, but rather a barometer of risk sentiment, which fell yesterday for highly debatable reasons. In my opinion, we are witnessing a more natural and deep bearish retracement.

Given our long-term trend against the US Dollar, and the fact that there is unlikely to be much immediate downside movement ahead of us, I see the best potential opportunity here today as a long trade following a bullish bounce at the support level of $0.6845, if it is reached today.

There is nothing significant scheduled for today in terms of the AUD or USD.

19-01-2023 07:01:19

The USD/JPY Rises and Then Falls Following The BOJ Meeting

In October, the USD/JPY made a strong bearish reversal as the USD fell. The Bank of Japan and the Ministry of Finance, on the other hand, intervened in the markets following the JPY's long decline, and the pair reversed just below 152.

The BOJ also made a move, announcing a policy change in December, which helped send USD/JPY lower, and the price fell below 130 this year. Traders were expecting further policy changes to be announced at the BOJ meeting yesterday.

Instead of tweaking or abandoning it entirely, the BOJ announced no policy changes yesterday, but it revised inflation forecasts higher, disappointing JPY buyers. As a result, the USD/JPY rose to 131.60 from a 128 low.

The traders' heavy long positioning on the JPY suggested that speculators were betting on back-to-back major policy changes by policymakers, but I believe they cannot risk too much change in too short a period. The surprise factor, however, was that they doubled down on defending their yield curve control policy.

As the BOJ's gains faded, the price fell back. Someone had to ruin the BOJ's attempt to send a strong message today. This, combined with a softer USD today and the fact that the technicals are still supportive of the recent downside trend, encouraged USD/JPY sellers to return, indicating that the main trend remains bearish.

20-01-2023 07:01:56

US Dollar Forecast Today

The DXY bulls and bears are locked in a struggle at a critical point

  • DXY bears are camping below the 102.20 crucial resistance level.
  • A breach of the 50% mean reversion level opens the door to an upward correction.

The US Dollar was under pressure in non-directional markets on Thursday, although it was pulled down by US disinflationary data, despite aggressive language from Federal Reserve officials.

The price is bouncing along the support, with an eye on a test of the initial bearish impulse's 38.2% Fibonacci level and a 50% mean reversion that will hit the neckline of the M-formation. This is currently at 102.20 and will be crucial in determining the trajectory for the remainder of the week. A break there raises the possibility of a move into trendline resistance at 102.50, while failure raises the case of a big bearish continuation.

A move down at this point increases the possibility of a breach of the 101.30s swing lows on the daily chart, as well as a fake-out that would have trapped US dollar bulls in the currency market.

20-01-2023 02:01:04

USD/JPY Technical Analysis

Higher as Traders Ignore Japan's Core Inflation Surge

Japan's core consumer prices jumped 4.0% year on year in December, more than double the central bank's 2% objective and setting a new 41-year high.

Despite concerns that the Bank of Japan (BOJ) may ultimately abandon its ultra-easy policies, the dollar/yen is rising. The Forex pair is also supported by high US Treasury rates.

The USD/JPY is trading at 129.088, up 0.662 or +0.52% at 06:17 GMT. The Invesco CurrencyShares Japanese Yen Trust ETF (FXY) is trading at $72.65, up $0.23 or +0.32% on Thursday.

The USD/JPY rose earlier this week on the Bank of Japan's decision to maintain its ultra-easy monetary policy. However, it also fell as traders continued to gamble on a shift in Bank of Japan policy.

Analysts are divided on whether the BOJ would hike rates this year, owing to concern over whether salaries will rise sufficiently to offset the impact of growing living costs on consumption while keeping inflation at or around 2%.

Japan's core consumer prices surged 4.0% year on year in December, more than double the central bank's 2% objective, setting a new 41-year high and fueling market hopes that the central bank will gradually phase out ultra-low interest rates.

Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the major trend is down. However, momentum is increasing. A move through 127.227 will indicate that the downturn has resumed. A break of 134.775 shifts the primary trend upward.

The minor trend is positive. On Wednesday, it began to rise. The motion changed momentum upward.

The nearest support is the major bottom on May 24, 2022, which is at 126.362. The nearest resistance levels are 103.050 and 131.001.

Technical Forecast for the Daily Swing Chart

The reaction of traders to a minor pivot at 129.403 will most likely influence the direction of the USD/JPY on Friday.

Bullish Scenario

A persistent advance over 129.403 suggests the presence of buyers. This might lead to a surge towards pivots at 130.050 and 131.001. Passing through this level might set up a test of the minor tops at 131.578 and 131.872.

Bearish Scenario

A persistent move below 129.402 indicates the presence of sellers. This might result in a retest of the primary bottom at 127.227, followed by a retest of the long-term support at 126.362.

20-01-2023 05:01:20

GBPUSD Midday Update on 20-01-2023

The GBPUSD pair has been trading in a tight range throughout the morning, and as long as the price remains above 1.2295, our bullish outlook will continue valid for today, structured inside the bullish channel shown on the chart, reminding you that our next key goal is 1.2590.

Today's trading range is predicted to be between 1.2310 support and 1.2480 resistance.

Today's projected trend: Bullish


20-01-2023 09:01:53

DeFi Forex will save costs by 80%

According to a joint study report issued on January 19th by Circle and Uniswap, using decentralized finance (Defi) protocols in the foreign exchange market may reduce remittance costs by up to 80%.

The study, titled "On-chain Foreign Exchange and Cross-border Payments," was written by Austin Adams (Uniswap Data Scientist), Gordon Liao (Circle Chief Economist), and others.

The authors of the study report examined the trading activities of Circle's USDC and EUROC on Uniswap from July 2022 to January 2023. They determined that the digital currency had a total transaction volume of $128 million, with certain days showing up to $8 million in trading activity.

During the study period, USDC and EUROC traded at prices that were extremely close to the exchange rates discovered in the large-scale forex market for the USD and EUR, respectively. Despite its tiny trading volume, the authors conclude that the Defi currency exchange offers a legitimate alternative to traditional forex, with competitive pricing and price efficiency.

The researchers want to investigate the possible cost savings that may be obtained in the foreign exchange market by utilizing decentralized finance protocols such as Uniswap. To accomplish so, they contrasted the expenses associated with the traditional correspondent banking forex system to those connected with Defi forex.

The researchers calculated the cost of a $500 transfer via the international banking system using World Bank statistics. They then compared this pricing to buying a stablecoin (either USDC or EUROC) on an exchange, exchanging it for the other coin with Uniswap, transferring it to another person, then exchanging it back for the original currency on an exchange.

The researchers concluded that, while the Defi model does contain expenses like exchange fees, network fees, Defi trading fees, and charges connected with sending and receiving money from an exchange. According to World Bank estimates, these costs are still much less than the typical remittance cost, by up to 80%.

Defi is transforming the world's financial systems.

Decentralized finance, or Defi, is changing the way we think about traditional financial institutions. Defi systems can provide a variety of financial services without the use of centralized middlemen by utilizing blockchain technology and smart contracts. As a result, there has been an explosion of innovation in the field, as well as an increasing number of users lured to the transparency, security, and accessibility of Defi platforms.

The possibility for everyone with an internet connection to access a wide range of financial services is one of the most intriguing elements of Defi. This covers lending and borrowing, as well as trading and investing insurance and savings. Defi platforms may deliver these services at substantially cheaper rates and with better transparency by eliminating the need for traditional middlemen such as banks and financial institutions.

Smart contracts, which are self-executing contracts with the conditions of the agreement explicitly put into lines of code, are another important feature of Defi. This enables the automation of numerous financial procedures, which can decrease the risk of fraud and mistakes.

Furthermore, by storing all data on a decentralized blockchain network, smart contracts may help safeguard users' privacy and security. The total value locked in Defi platforms is expected to reach more than $30 billion by 2021, with the number of users on these platforms expanding at a similar rate. As a result, there has been an inflow of institutional investors and established financial firms wanting to join in on the action.

21-01-2023 07:01:57

GBP Fundamental Forecast: Constrained Consumers Send it Lower

The pound confronts some obstacles, including rising into a period of poor growth, tenacious (though somewhat lower) inflation, which hurts expenditure, and unresolved Brexit difficulties. The Bank of England has the difficult challenge of maintaining rate rises that may have already pushed the country into recession if the December strike results in negative economic growth for Q4. Along with early favorable inflation statistics, it looks like GBP prospects aren't looking very promising outside of GBP/USD, where dollar selling has aided the underperforming currency.

UK RETAIL SALES ARE DISAPPOINTED

The pound fell on Friday as UK retail sales data showed a month-on-month reduction in both the report's 'volume' and 'value' indicators. Following the booze-fueled World Cup economic rebound in November, UK consumers elected to tighten their belts in December as the cost-of-living crunch persists. Consumers not only spent less but also bought fewer items during the strike-affected month of December, resulting in negative ratings on both counts when compared to November. Longer-term trends show a rise in value paid with a decrease in volume, implying that UK consumers are paying more for less.

JEREMY HUNT WOULD LIKE TO EXTEND THE 5P FUEL LEVY CUT IN HIS SPRING BUDGET.

On the fiscal front, UK finance minister Jeremy Hunt intends to continue the 5p gasoline price drop for another year, as announced in his spring budget. The 5-penny drop was first proposed by then-finance minister Rishi Sunak to reduce fuel prices at the pump. Hunt must tread a fine line since non-targeted government expenditure can keep inflation high for longer.

BOE GOVERNOR ANDREW BAILEY EXPECTS INFLATION TO FALL RAPIDLY IN 2023

Andrew Bailey, Governor of the Bank of England, provided more views on inflation and the market's expectations for the terminal rate. Bailey maintains previous estimates that show inflation falling sharply in 2023 but still well above the 2% objective. About reduced inflation in December, Bailey termed the promising statistics as the "beginning of an indication that a corner has been turned". His views were reasonably cautious, considering the continuance of increased costs in the UK, where food price hikes remained a concern.

In the United Kingdom, average salaries have increased at their quickest rate since 2001 (6.4% year on year), yet this pales in contrast to inflation, which recently hit 11.1% year on year. The Bank of England has advised against salary rises, citing the risk of a wage-price spiral, which would keep inflation high for longer. Instead, the Bank has to get it right and dramatically cut inflation.

EVENTS WITH HIGH RISK FOR THE NEXT WEEK

Next week's high-impact sterling events are limited to Flash services and manufacturing PMI data, as well as a handful of high-profile UK earnings announcements from IBM, Boeing, EasyJet, Comcast, SAP, and Diageo, to name a few.

Next week's narrative will revolve around fourth-quarter US GDP and if the Fed looks to be steering a gentle landing despite its own poor retail sales figures. Then, on Friday, PCE inflation figures will be released. Cable is still one to keep an eye on because of its direct exposure to the currency.

21-01-2023 12:01:41

EUR/USD Forecast - The Euro Is Still Struggling

The Euro has been on a massive uptrend for some time, but the last week or so has seen the same pattern of battling above the 1.08 level.

Euro vs US Dollar Technical Analysis

The Euro surged again in the early hours of Friday but lost ground rapidly after we surpassed the 1.08 level. This is an area that has consistently caused issues for the Euro, so I don't believe it's a major surprise. This is a back-and-forth situation in which we can't seem to find our foothold. I believe that given enough time, we will have to make a larger choice, but it is clear that we are not yet ready to do so. With that in mind, I see this through the lens of a range-bound market that doesn't know what to do with itself.

According to the Davos speakers, higher for longer and more tightening is coming from both central banks, so it is no longer a one-way transaction. That being said, if you need to justify a move in this market, you might consider the probability of a worldwide downturn. Keep in mind that when the global economy slows, the US dollar tends to benefit as people seek protection. I'm not sure whether that's exactly what's going to happen here, but it certainly appears like a short-term retreat is in the works. That being said, a break over the 1.09 level sets up a clear shot to the 1.10 level.

On the downside, I believe the 1.06 level will be supported if we go that far on a retreat. In other words, more chop is almost certainly on the way.

21-01-2023 03:01:58

Bitcoin is near 10.16% in a bullish trade.

Bitcoin was trading at $23,089.1 on the Investing.com Index at 15:32 (10:02 GMT) on Saturday, up 10.16% on the day. It was the highest percentage rise in a single day since Thursday, November 10, 2022.

The increase increased Bitcoin's market size to $441.8 billion, or 42.10% of the overall cryptocurrency market worth. Bitcoin's market cap peaked at $1,275.5B. In the recent twenty-four hours, Bitcoin traded in a range of $22,461.1 to $23,090.2.

Bitcoin's value has increased by 11.75% during the last seven days. Bitcoin traded for $31.6B in the twenty-four hours to the time of writing, accounting for 52.46% of total cryptocurrency volume.

In the last 7 days, it has ranged from $20,448.2539 to $23,090.2012. Bitcoin is still down 66.53% from its all-time high of $68,990.63, which was hit on Wednesday, November 10, 2021. Other aspects of cryptocurrency trading On the Investing.com Index, Ethereum was last trading at $1,664.93, up 7.12% on the day.

Tether was trading at $1.0001 on the Investing.com Index, representing a 0.01% gain. The market cap of Ethereum was recently at $202.8 billion, or 19.32% of the whole cryptocurrency market cap, whereas Tether's market cap was $66.5 billion, or 6.34% of the total cryptocurrency market value.

21-01-2023 08:01:56

Weekly USD/JPY Forecast

USD/JPY fell to 127.20 last week but has since moved sideways. This week's initial bias remains neutral. There is no apparent evidence of a bottom yet, and a further plunge is yet possible. A break of 127.20 will continue the whole slide from 151.93 and target the Fibonacci level of 121.43. Nonetheless, a breach of 131.56 should confirm a short-term bottom and shift the bias to the upside for a bigger comeback.

In the larger picture, the break of the 55-week EMA (currently at 131.52) raises the possibility of a medium-term bearish reversal, although this has yet to be verified. To drive the price back up, look for a 61.8% retracement of 102.58 to 151.93 at 121.43 and a 38.2% retracement of 75.56 to 151.93 at 122.75. However, a break of the 131.56 resistance level is required first to signify a bottom. Otherwise, more decline is likely.

In the long run, 151.93 appears to be a significant high. However, it is too early to predict a long-term negative reversal at this time. Rebounding from the 38.2% retracement of 75.56 to 151.93 at 122.75 will keep the case open for the price movement from 151.93 to be merely a corrective pattern.

22-01-2023 06:01:50

Why did Bitcoin, Ethereum, and Solana all rise on Saturday?

Weekends have recently proven beneficial to the bitcoin market, and today is no exception. Following a surge in values last Saturday, the trend has been replicated this weekend, with green dominating the market.

Bitcoin (CRYPTO: BTC) was up 8.6% in the previous 24 hours as of 9:00 a.m. ET, Ethereum (CRYPTO: ETH) was up 5.9%, and Solana (CRYPTO: SOL) was up 19%. These gains have slowed slightly, and the tokens are currently up 5.5%, 2%, and 6.9% in the last day, respectively.

So, what now?

The economic and monetary background is the macro driver of the crypto rise. Recent statistics suggest that inflationary pressures are receding, and the Federal Reserve is expected to pause interest rate rises in the coming months. Earnings season has now begun, and the financial industry has had solid results. As a result, investors are returning to higher-risk assets such as cryptocurrency.

On Thursday night, the long-awaited bankruptcy of crypto company Genesis occurred. This is undoubtedly negative for crypto's exposure, but it hasn't prompted much alarm within the sector because withdrawals have been frozen since November.

The next shoe to drop might be Genesis' parent firm, Digital Currency Group (DCG), which has its financial concerns due to illiquid assets and losses from the bankruptcies of FTX and Three Arrows Capital.

Investors value predictability, and while Genesis' bankruptcy is bad for the sector, it does provide greater transparency. We are also witnessing fewer spillover consequences from these bankruptcies.

Three Arrows Capital went bankrupt this summer, and it took months for it to lead to the collapse of FTX and the subsequent drop in Solana's value.

Going bankrupt or becoming a fraction of themselves is likely priced into the market and does not appear to have the same downstream impacts on other firms as Genesis and DCG.

Throughout all of this, Solana, in particular, has performed well. Thanks to recent enhancements, the blockchain has become quicker and more trustworthy, and both developers and consumers appear to be sticking to the blockchain rather than looking for alternatives.

The current trade surge is encouraging for cryptocurrency investors, but it may not remain. Momentum and short squeezes often drive short moves, such as the liquidation of $385 million in short holdings in the previous 24 hours.

What inspires me is the volume of blockchain activity on Ethereum, particularly on Solana. Developers continue to create for the blockchain, and non-fungible token projects on both blockchains, such as Checks on Ethereum and Claynosaurs on Solana, have attracted the market's interest.

As long as developers and entrepreneurs continue to build, the value of these tokens will rise. However, the development will be uneven, much like the price of cryptocurrencies.

23-01-2023 07:01:37

This Week: ECB vs Fed, EUR/USD Expecting Breakout

FORECAST OF EURO FUNDAMENTALS

The euro finished last week well, edging closer to the 1.09 resistance level. The European Central Bank (ECB) is now leading the way against the Federal Reserve in a struggle amongst central bank speakers to retain their credibility and stick to a fairly hawkish narrative. Markets are practically seeing through Fed talk of raising the 2023 terminal rate to 5% by focusing on worsening economic indicators from the United States. However, with so many Fed officials presenting a unified front about actually getting inflation down to its goal level, it may be stupid to do so.

The euro's support has been mostly driven by the dollar's decline, but growing inflation in the eurozone and ECB President Christine Lagarde's a hard stance against inflation. She voiced worry that China's re-opening will lead to higher energy costs in 2023, and the ECB will continue to raise interest rates to keep inflation at 2%. This rapidly dispelled any dovish chatter and might be repeated this week, when Lagarde and other ECB officials are slated to speak. With recessionary worries abounding, there is a danger that increasing too quickly may harm the area, but as things stand, it is almost probable that the February rate decision will result in a 50bps increase.

The week ahead appears to be tilted toward the United States, but German data is a wonderful gauge for the eurozone and might boost EZ optimism if real data match predictions. Softer data in the United States would seriously stress Fed hawks, possibly leading to a leg down for the greenback. Durable goods orders are virtually surely going to rise, with Boeing receiving a big flood of orders, while GDP is expected to grow in Q4 2022. Core PCE will also be scrutinized for signs of further inflationary easing. Michigan consumer sentiment data concludes the week, and forecasts predict a significant boost in consumer confidence, which might impact the EUR/USD if realized.

The daily EUR/USD price action shows yet another consolidatory rectangle pattern (pink), indicating market uncertainty, although a breakthrough is imminent. The data for next week may precipitate this move, and a daily candle closure above or below rectangle resistance/support may result in a short-term directional bias. Given that the euro is approaching overbought levels, I don't expect much more big upside (if any) in the near term, and the pair might fall quickly even if bulls get it up to 1.1000.

Resistance levels:

1.1000

1.0936

1.0900

Support levels:

1.0800

1.0774

1.0736

Conclusion

According to IGCS, retail traders are now SHORT on EUR/USD, with 67% of traders holding short positions (as of this writing). We normally adopt a contrarian approach to crowd mood at Fxedeal; but, recent shifts in long and short positions have resulted in a short-term mixed disposition.

23-01-2023 01:01:18

Despite a cautious market attitude, the US dollar is struggling to recover

The US Dollar began the new week under moderate negative pressure, with the US Dollar Index falling below 102.00 during Asian trading hours on Monday. Following Friday's strong rally, the market attitude appears to have turned cautious, with US stock index futures trading slightly lower. At the same time, the benchmark 10-year US Treasury bond yield remains just below 3.5%.

Later in the afternoon, the Bundesbank of Germany will release its monthly report, and the European Commission will release the preliminary Eurozone Consumer Confidence Index. The Federal Reserve Bank of Chicago's National Activity Index for December will be included on the US economic calendar.

Nonetheless, market activity remained sluggish due to low trade volumes over the Chinese New Year holiday. The Bank of Japan (BoJ) issued the minutes of its December monetary policy meeting during the Asian session.

According to the magazine, several members stated that the BoJ should restate and clarify that the yield band's expansion was not a move aimed at exiting the ultra-easy policy. The USD/JPY pair sustained its recent advances and was last seen trading in positive territory at about 130.00.

As the 10-year US Treasury note yield increased by over 3% on Friday, gold struggled to maintain its upward momentum heading into the weekend. XAU/USD closed the day slightly lower after reaching a multi-month high of $1,937. At the time of publication, the pair was trading in a narrow range of over $1,920.

The EUR/USD gained traction to begin the week, reaching a high over 1.0900 for the first time since mid-April before easing somewhat in the early European morning. Over the weekend, European Central Bank (ECB) Governing Council member and Austrian central bank Governor Olli Rehn stated that the ECB had grounds for "substantial interest rate rises" this winter and spring. Meanwhile, according to the results of a recent Reuters poll, the ECB is predicted to opt for a 50 basis point (bps) rise at its February monetary policy meeting, with the policy rate expected to reach 3.25% by mid-year.

During Asian trading hours on Monday, GBP/USD rose to 1.2450 before reversing much of its day's gains and falling to 1.2400. In the absence of high-impact data releases, risk sentiment and the valuation of the US Dollar may continue to dictate the pair's movement. S&P Global will issue preliminary Manufacturing and Services PMI data for Australia in the early session on Tuesday. Following last week's tumultuous trading, the AUD/USD is trading just around 0.7000 early Monday.

The USD/CAD plummeted substantially on Friday, finishing the week below 1.3400. At roughly 1.3380 in the European morning, the pair remains calm. Later in the afternoon, Statistics Canada will issue the New Housing Price Index data for December, which is predicted to be -0.2%.

Bitcoin surpassed $23,000 for the first time since August on Saturday, but it failed to maintain its positive momentum. Following Sunday's tumultuous movement, BTC/USD appears to have entered a consolidation period below $23,000 early Monday. Ethereum gained about 5% last week, marking the sixth consecutive week of increases. To begin the week, ETH/USD remains just above $1,600.

23-01-2023 08:01:36

EUR/USD Mid-Day Forecast

The EUR/USD falls slightly after reaching 1.0925 but remains well above the 1.0765 support level. The intraday bias is still to the upside. The current advance from 0.9534 should aim for the 61.8% prediction of 0.9630 to 1.0733 from 1.0482 to 1.1164 shortly. On the downside, a break of 1.0765 support should now suggest short-term topping and a return to the downward for the 55-day EMA (now at 1.0544).

In the grand scheme of things, the present development indicates that the rebound from the 0.9534 low (2022 low) is a medium-term uptrend rather than a correction. The next target is the 61.8% retracement of the 1.2348 (2021 high) to 0.9534 at 1.1273. As long as 1.0482 support persists, this will be the preferred scenario.

24-01-2023 07:01:50

How long until the prospect of a US recession returns to the market's spotlight? 

1. In December, its Leading Economic Index fell 1.0%.

2. The November reading was revised downward to 1.1%.

3. The December drop beat all 22 estimates in a Reuters survey of experts, which had a median expectation of a 0.7% drop.

4. This is the tenth consecutive month of rain.

5. The LEI is currently down 4.2% in the six months from June to December 2022. This is a substantially faster pace of decline than the previous six-month period's 1.9% shrinkage (December 2021–June 2022)

6. "The US LEI declined dramatically again in December, signaling a near-term recession for the US economy," stated Ataman Ozyildirim, Senior Director of Economics at The Conference Board. "Leading indicators showed a widespread weakening in December, indicating that circumstances in labor markets, manufacturing, home building, and financial markets may deteriorate in the coming months. Meanwhile, the coincident economic index (CEI) has not deteriorated as much as the LEI since labor market indicators (employment and personal income) has remained strong. Nonetheless, industrial production, a component of the CEI, dropped for the third month in a row. Overall economic activity is expected to fall in the next quarter before rebounding in the fourth quarter of 2023."

24-01-2023 03:01:58

Positive US Fed Rate Forecast Boosts Risk Viewpoint

Asian equities climbed on Tuesday, following Wall Street's strong indications overnight, as growth sectors appeared appealing ahead of key tech reports. Rising prospects for a less aggressive Federal Reserve boosted risk appetite, attracting investors to the equities market. Markets in mainland China and Taiwan, on the other hand, remain closed for the Lunar New Year vacation and will resume trade on January 30. After closing higher in the previous session, European futures are pointing to a favorable beginning this morning, which might trickle down to Wall Street later today.

In the currency market, the dollar fell slightly, while the euro remains below 1.09 following yesterday's failed breakthrough attempt. Oil bulls appear to be gaining momentum as China's economy reopens, whilst gold stays supported by US recession worries and predictions of fewer rate hikes in 2023.

The following three days will be dramatic for equities markets due to corporate earnings, with Microsoft reporting after the bell today and Tesla reporting late Wednesday. It's also a data-heavy week, with European and US economic reports in the spotlight, including PMI surveys today and US fourth-quarter GDP on Thursday. In terms of central bank meetings, all eyes will be on tomorrow's Bank of Canada rate decision, which is likely to result in a 25-basis-point rate rise.

Is the EURUSD preparing for a breakout?

Because of crucial economic data and comments from financial giants, the EURUSD might have a tumultuous week.

Monetary policy conversations between officials at the Federal Reserve and the European Central Bank continue, with attention increasingly focused on their policy meetings next week. On the one hand, a lower dollar, strong inflation in the Eurozone, and a hawkish ECB continue to support the euro. On the other hand, persistent hints of slowing inflation in the United States have fanned speculation of a less aggressive Federal Reserve. The Fed-ECB monetary policy difference is closing, which might mean more upside for the already optimistic EURUSD.

Not only will the Eurozone and US January PMIs be closely watched today, but ECB President Lagarde's speech may also have an impact on the currency pair. On the technical front, prices stay optimistic on the daily charts, with resistance at 1.09. A strong breakout and daily close above this level might indicate a move toward the next important level of interest at 1.12.

GBPUSD in the Vogue

The GBPUSD had a rough day yesterday, with values bouncing in a range of slightly around 1.24. Nonetheless, the prognosis on the daily charts remains optimistic thanks to the recent string of higher highs and lower lows. The GBPUSD might see some movement this morning as a result of the UK and US January PMIs. Bulls, on the other hand, remain in control, with support slightly above 1.23. If the currency pair can go past 1.24, an ascent toward the 1.26 zone might become a possibility. Prices might fall back below 1.2170 if the rally loses momentum and falls below 1.23.

Gold in the spotlight

Gold bulls continue to be buoyed by worries of a US recession and forecasts of a less aggressive Federal Reserve. The precious metal is undoubtedly on a roll, with five straight weekly increases, and might continue to rise provided the underlying factors stay constant. A lower dollar and bad US economic statistics may increase demand for gold in the coming days. Looking at the technical picture, prices are still optimistic, hitting new 9-month highs this morning and perhaps testing $1950 and higher.

24-01-2023 10:01:07

The Dollar Swelled After Data Showed a Brighter Forecast for US Business Activity

The dollar climbed against the euro on Tuesday as statistics revealed that US corporate activity contracted for the seventh consecutive month in January, although there were hints that the decline was slowing.

While business activity in the United States fell in January, the decline in both the manufacturing and service sectors softened for the first time since September, and company confidence increased as the new year began.

"It just appears to be another piece of evidence demonstrating what the Fed has been preaching: the economy is sturdy enough to withstand more rises," said Juan Perez, director of trading at Monex USA in Washington.

Fed fund futures anticipate only two more quarter-point rate rises to a peak of roughly 5% by June before the Fed begins lowering rates later in the year. The Federal Reserve has stated that it still has 75 basis point hikes in the works.

"It is apparent from PMIs that the Fed has stifled expansion, but the economy has not suffered as many predicted," Perez added.

The dollar extended its recovery versus the euro, but it remained close to 9-month lows set the day before. The euro was 0.17% weaker at $1.0852, barely shy of Monday's 9-month peak of $1.0927.

The euro remained supported throughout the day as eurozone statistics on Tuesday confirmed that the economy was weathering a winter of high pricing pressures pretty well, according to economists.

According to surveys, eurozone business activity unexpectedly returned to small growth in January, while service-sector activity in Germany rose for the first time since June, despite persistent pricing pressures.

A stronger economy may allow the ECB to hike interest rates more aggressively to combat inflation.

"There is enough in there to secure another 50 basis point hike from the ECB," said Michael Brown, market strategist at TraderX.

The statistics on US economic activity helped push the dollar to a near one-week high versus the yen. The US dollar was recently up 0.03% to 130.7 yen.

The dollar sank to as low as 127.215 yen last week, its lowest level since May, ahead of a Bank of Japan policy review in which investors expected the central bank to announce the end of its stimulus program. The BOJ, on the other hand, kept policy unaltered, providing some relief to the dollar.

The British pound was one of the worst-performing major currencies versus the dollar, sliding 0.71% on the day to $1.2288 after a poll revealed that private-sector economic activity in the United Kingdom declined at the sharpest rate in two years in January.

"In the near term, we expect sterling to begin underperforming surrounding European currencies as economic data reveals expanding growth differentials," said Simon Harvey, head of FX Analysis at Monex Europe.

Meanwhile, bitcoin barely changed on the day at $22,878, having risen by almost a third in value since early January as investors recovered from the high-profile collapse of the FTX crypto exchange.

25-01-2023 07:01:47

Aussie Rises, Kiwi Slumps Amidst Inflation Data

The Australian dollar rose to a more than five-month high on Wednesday after inflation data came in hotter than expected, while the kiwi fell after New Zealand's fourth-quarter inflation grew less than predicted, according to the central bank.

The euro stayed at a nine-month high versus the dollar, as traders assessed a brighter eurozone economic forecast against rising concerns of a U.S. recession. The Australian dollar gained 0.66% to $0.7092, its highest level since August, after a surprise rise in inflation to a 33-year high last quarter strengthened the argument for the Reserve Bank of Australia to keep hiking interest rates.

Meanwhile, the New Zealand dollar fell roughly 0.6% to $0.6469 as annual inflation of 7.2% in the fourth quarter fell short of the central bank's 7.5% projection. "The key message we're taking from it is that we believe we've seen the worst of inflation now and that inflation has peaked," said Jarrod Kerr, Kiwibank's chief economist.

"We expect the cash rate in New Zealand will peak at 5%, not 5.5%, as the Reserve Bank (of New Zealand) has told us, and rates markets are reacting to that shift in outlook." In other currencies, the euro held steady at $1.0888, close to Monday's nine-month high of $1.0927, underpinned by a surprisingly strong eurozone economy and hawkish rhetoric from European Central Bank (ECB) officials.

Data released on Tuesday revealed that eurozone economic activity returned to moderate growth in January, indicating that the bloc's slowdown may not be as severe as previously thought. Expectations of further ECB rate hikes also boosted mood. Policymakers are committed to containing inflation, but they disagree on the magnitude of any movements after February's projected half-point increase.

In the United States, a bleaker picture is emerging as symptoms of an economic downturn emerge as a result of the Federal Reserve's dramatic rate rises last year. Business activity in the United States fell for the seventh consecutive month in January, while the decline slowed in both the manufacturing and services sectors for the first time since September.

The US dollar index rose 0.01% against a basket of currencies to 101.92, not far from last week's almost eight-month low of 101.51. "(The data) reinforces that, for one thing, Europe's resilience... and the issues they've had in terms of energy, have not been as devastating as some had thought," said Rodrigo Catril, a currency strategist at National Australia Bank.

The British pound was 0.15% to $1.2322, while the Japanese yen was last worth 130.24 per dollar.

25-01-2023 12:01:20

EUR/USD Forex Signal: Currently Stuck in a Tight Range

Bullish view

  • Buy the EUR/USD pair and add a take-profit at 1.1200.
  • Set a sell-stop at 1.0800.
  • Timeline: 1-2 days.

Bearish view

  • Set a sell-stop at 1.0830 and a take-profit at 1.0700.
  • Add a stop-loss at 1.0950.

Following the release of dismal economic statistics, investors proceeded to read the tea leaves of the Federal Reserve (Fed) and the European Central Bank (ECB). The EUR/USD exchange rate has been locked around 1.0881 for the majority of this week. This price is around 3.86% higher than 2023 low.

Business activity in the EU and the US

According to data released on Tuesday, corporate activity in Europe and the United States is still under pressure this year. Both nations' manufacturing and services PMIs stayed below 50 in January, indicating that they are currently in a contractionary condition.

In Europe, the manufacturing PMI was 48.8, up from 49.8 the previous month. The composite PMs in France and Germany were 49 and 49.7, respectively. On the plus side, these figures suggested that commercial activity in the region was improving, aided by comparatively cheap natural gas costs. Gas prices have dropped to their lowest level in over two years.

Business activity in the United States remained subdued, with manufacturing and services PMI numbers falling below 50. These figures backed up what we've seen in recent weeks when some of the country's largest corporations announced massive layoffs. The multinational corporation 3M lay off nearly 2,500 people.

Alphabet, Microsoft, and Meta Platforms have also laid off thousands of employees. Rate rises will continue, according to ECB and Fed officials. Lael Brainard, the Fed Vice Chair, has stated that the bank will continue to raise rates until there is sufficient evidence that inflation is declining. The ECB's Chief Economist, Philip Lane, held the same opinion.

Forecast for the EUR/USD

In recent months, the EUR/USD exchange rate has been steadily rising. On January 12, it managed to break through 1.0740. This was an important level since it was the upper half of the rising triangle pattern depicted in red. It has been above this level for about two weeks. The incredible oscillator has passed through the neutral point.

As a result, we may estimate that the pair has a greater upside in the short term by calculating the distance between the hypotenuse and the top side of the triangle. More advances are expected to push the pair up to the important milestone of 1.1050.

25-01-2023 04:01:54

As Risk Remains on the Defensive, US Futures Drip Lower

This comes as technology continues to lead the downturn, with Nasdaq futures presently down 1.2% and Dow futures down 0.6%. The dip is also weighing on European markets, with the DAX and CAC 40 both down 0.6% on the day.

There isn't much in European morning trade to blame for the drop, but it comes after Microsoft's declining sales prediction earlier in the day, as well as higher CPI data from Australia and New Zealand - which may make markets more suspicious of the peak inflation thesis.

The dollar is somewhat stronger presently, with the AUD/USD trading at 0.7080, down from 0.7110 earlier. GBP/USD is also down 0.3% at 1.2285, hovering near the day's lows.

25-01-2023 08:01:08

EUR/CHF: The Euro-Swiss Pair is Moving into the Weekly Blue Box

Now we will look at the weekly chart of the EURCHF: Euro Swiss FX pair. This cross is a logical combination of two pairs: EURUSD and USDCHF. Although both dollar-linked pairings are significantly more liquid, the EURCHF has its personality. Indeed, it creates a nice double-three structure from the January 2015 lows and so matches Fibonacci extension levels.

The market has delivered a short-term bounce and correction that has persisted as a broader 7-swing pattern. In this article, we examine the EURCHF trend during the last eight years and present a perspective with objectives for the next 3-5 years.

EUR/CHF weekly Elliott Wave Analysis

The weekly chart below depicts the price behavior of the EURCHF cross-ratio. The pair has built a cycle higher in red wave x of a cycle degree from the lows of January 2015. It reached a high of 1.2005 in April of this year. The advance is an Elliott wave zigzag pattern with three swings of correction. In general, the correction may be over within three swings. However, unlike stocks, FX is a range-bound market. As a result, the latter can also trend in corrective sequences.

A correction down in wave x has unfolded from the April 2018 highs as a double three pattern with a 3- 3-3 structure. First, wave ((W)) concluded in May 2020 with a low of 1.0492. Then, in March 2021, a connection in wave ((X)) printed a lower high at 1.1151. Wave ((Y)) has since formed three further swings downward.

As a result, the blue wave (A) of the black wave ((Y)) has reached the 1.0208- 0.9952 intermediary range, which corresponds to the 0.618-0.786 extension area. The last swing in blue wave (C) of black wave ((Y)) has reached 0.9626-0.8684 complete extension area after a bounce in wave (B). A powerful response higher can be noticed from that place. The bottom at 0.9407 lows is now anticipated to represent the conclusion of the whole cycle correction from January 2015 lows.

EURCHF may be at the early stages of a new cycle in red wave y as of the September 2022 lows. While trading above the 0.9407 lows, the pair can hit the 1.2811-1.4914 range in three swings. As a result, the intermediate zone 1.1512-1.2083 should give medium-term resistance.

26-01-2023 07:01:33

Forex Today: The Countdown to This Week's and Next Week's Major Events Will Begin

Here's what you need to know about Thursday, January 26:

As we approach the end of the month and the Federal Reserve/European Central Bank meetings, the clock is ticking. A storm is brewing in the FX market, and Thursday's data events will be crucial in this respect.

It was slightly muted in some pairs, but active in others, as investors and traders prepared for today's spate of critical economic data that will contribute to the Federal Reserve's interest rate decision on February 1.

The US Commerce Department is slated to issue its preliminary fourth-quarter GDP estimates at the same time as the country's Core PCE prices, likely accelerating to a 0.3% moM pace in December, while a 0.4% growth cannot be ruled out, according to analysts at TD Securities.

"The year-on-year pace is likely to have slowed to 4.5%, indicating that prices continue to moderate but remain sticky at high levels," the experts contended. "We also expect Gross Domestic Product growth to have remained solid in Q4, producing another above-trend rise," the analyst added to the growth statistics. Consumer and inventory performance was likely supportive to growth."

WIRP implies that a 25 basis point increase on February 1 is completely priced in, with less than a 5% chance of a greater 50 basis point shift. Another 25 basis point boost on March 22 is around 80% priced in, whereas a previous 25 basis point hike in Q2 is only 35% priced in.

The dovish view caused the US Dollar to decline against the euro once more on Wednesday, but markets did not follow suit, as EUR/USD remained trapped in a 1.0875 / 1.0923 range for the day.

There was some better action in USD/JPY elsewhere. The previous day's finish provided the bear's fuel to continue selling against pullbacks, denying the bulls room into the top pattern formed earlier in the week. USD/JPY plummeted from a high of 130.58 to a new low of 129.26 as New York dealers got online, extending London's supply. This created excellent trading possibilities targeting past support structures on the way down to 129.50 and eventually the 129.20s.

USD/CAD was another pair that provided traders with possibilities of two-way movement on the day of the Bank of Canada's interest rate decision. The Bank of Canada lifted the main interest rate by 25 basis points to 4.5%, as predicted. The central banks stated in the statement that rates will likely remain at this level as they examine the effect of recent policy adjustments.

As a result, the Loonie fell across the board, but it quickly found buyers as Bank of Canada governor Tiff Macklem issued remarks on the policy outlook and reacted to questions, indicating that additional raises are not ruled out and are data-dependent. The USD/CAD exchange rate increased from 1.3365 to 1.3426. In a 50% mean reversion of the BoC rise, it then drew back into a previous support structure in the 1.3375s.

The Australian Dollar and Kiwi were higher on Wednesday following shockingly hot inflation data for Australia. As for yesterday's Q4 CPI inflation from NZ, analysts at ANZ Bank believe that it "was substantially better beneath the hood than the RBNZ feared at the time of the hawkish November MPS."

The New Zealand dollar traded between 0.6450 and 0.6504, while the Australian dollar moved between 0.7032 and 0.7122 (a crucial mark for the day ahead that defends 0.7150). In other news, the US 10-year yield fell 1 basis point to 3.45%, and WTI fell 0.1% to USD80/bbl. Gold rose 0.8% to $1940.4 per ounce.

26-01-2023 01:01:40

GBP/USD Forex Signal: Still Under Pressure of Dovish BoE Forecast

Bearish view

  • Sell the GBP/USD pair and set a take-profit at 1.2200.
  • Add a stop-loss at 1.2450.
  • Timeline: 1-2 days.

Bullish view

  • Set a buy-stop at 1.2410 and stop-loss at 1.2525.
  • Add a stop-loss at 1.2325.

The GBP/USD exchange rate recovered most of the losses it suffered on Wednesday, despite rising expectations that the Bank of England (BoE) may cut interest rates later this year. After falling to a weekly low of 1.2263 during the UK session, it climbed to 1.2400 during the American session.

Rate cuts by the Bank of England are becoming more popular

The GBP/USD exchange rate climbed marginally after futures data revealed that the Bank of England will need to decrease interest rates in the fourth quarter. According to interest rate swap statistics, investors expect the bank to raise rates by 50 basis points in February, followed by 0.25% in March. This pattern will continue until the Fed decreases interest rates in the final three meetings of the year.

This view is bolstered by the fact that the British economy is failing and may remain in recession for some time. On Wednesday, statistics indicated that factory price inflation had fallen to its lowest level in over a year, while flash manufacturing and services PMIs remained in the negative territory.

As a result, with inflation decreasing, many believe the BoE has the incentive to reduce rates to avoid a painful landing.

The fourth-quarter US GDP report will be the significant factor influencing the GBP/USD. Economists predict the economy will rise by 2.6% in the fourth quarter, following a 3.2% increase in the previous quarter. They also expect the GDP price index to decline from 4.4% to 3.3% in the same period.

These figures are significant since they will represent the initial estimations. Stronger-than-expected data will allow the Fed to continue its hawkish stance at its meeting next week. The latest durable goods order data, first unemployment claims, and new home sales will also be released in the United States.

Forecast for the GBP/USD

After forming a series of bearish patterns, the GBP/USD made a negative breakthrough this week. On January 23rd, for example, it formed a shooting star pattern. This is one of the most reliable bearish candlestick patterns in the market. It also produced a double-top pattern, the upper side of which was at 1.2445. In addition, a rising wedge developed.

As a result, the present rally is most likely part of the break and retest pattern, which is typically indicative of a bearish continuation. If it succeeds, the psychological level of 1.2200 will be important to monitor.

26-01-2023 08:01:03

Does a USDJPY Fall in 2023?

The Japanese yen had a difficult year last year. Over 2022, the USDJPY rose more than 30%, reaching a high of 150 in October. While expectations of weaker Fed rate rises dragged the pair below the 130 level in early 2023, doubts over the fate of the BOJ's yield control program drew the attention of Japanese assets in the middle of January. What is ahead for Japanese yen traders?

What impact does the BOJ have on the market?

The Bank of Japan is well-known for its cautious and steady monetary policy, which tries to stimulate economic growth while also fueling inflation. The BOJ employs two primary tools: the negative interest rate of -0.1% and yield-curve control, which permits the 10-year government bond to move within a predetermined range to achieve the 0% yield objective.

The Bank of Japan's yield-control policy, which was implemented in 2016, seeks to maintain yields low to boost consumer spending. As a result, inflation should rise. The Bank of Japan indicated in 2018 that the 10-year yield might rise or fall by 0.1% above or below zero. To stimulate market activity, the regulator expanded the band to 0.25% in each direction in March 2021.

In 2022, the BOJ lifted the cap to 0.5% above/below zero and expanded asset purchases in response to increasing pressure on the Bank to raise interest rates. It also increased speculation that the Bank may forsake its long-term interest rate objective. However, the Bank of England made no adjustments to monetary policy on January 18, causing the 10-year bond rate to fall to 0.38%.

In January, the Japanese yen fluctuated due to changes in market sentiment. The USDJPY plummeted over 14% at the start of the month but began to rise when the Bank announced the continuance of its easing monetary policy. Despite this, economists do not expect the Japanese yen will fall in value in the long run.

Factors that might boost the JPY

Many variables might influence the Japanese yen's long-term decline.

First, the central bank may be forced to intervene if inflation reaches 4% in December 2022. According to Bank of America, inflation might rise considerably beyond the market estimate (3% vs. 1.9%).

Another reason for the hawkish policy shift is the expiration of the tenure of BOJ Governor Haruhiko Kuroda. Analysts are concerned that the BOJ will duplicate the Fed's transitional rhetoric and take aggressive actions too late.

If this is correct and the JPY strengthens, the USDJPY may go below the 127 mark. In such a situation, sellers should set their sights on 122.30 and 114.70. After the retest of the 50-day SMA at 133.50, selling pressure may escalate.

Join FBS if you want to take advantage of the Japanese yen. FBS allows you to trade USDJPY, EURJPY, and GBPJPY on attractive terms, such as rapid execution and leverage up to 3000.

Conclusion

The Japanese yen has suffered as a result of recent monetary policy moves. However, strong inflation and a change in leadership at the Bank of Japan may cause the USDJPY to go below 120.

27-01-2023 08:01:23

Forex Today: The US Dollar Rises and Falls in Relation to US GDP

On Thursday, there was something for both bulls and bears following a barrage of data in the US that was generally positive but continues to indicate a weakening economic forecast with falling inflation, causing traders to continue to bet on a dovish Federal Reserve when it meets next week, February 1.

The US Commerce Department said that GDP rose at a faster-than-expected 2.9% annual pace in the fourth quarter of last year as consumers increased their expenditure on products.

Personal Consumption Expenditures growth fell to 2.1% year on year from 2.3% in the previous quarter, while the GDP price index decelerated to 3.5%, raising the probability of a dovish Fed. More data will be released on Friday, including Core PCE, the Fed's preferred inflation gauge, which indicates that prices likely increased at a 0.3% MoM rate in December, while analysts at TD Securities say that a 0.4% increase cannot be discounted. According to them, the YoY rate likely decreased to 4.5%, implying that prices continue to decline but remain sticky at high levels.

The US Dollar index, DXY, climbed 0.246% to 102.18 from a low of 101.504, with futures pricing a 94.7% chance of a 25 basis point rise next Wednesday and the Fed's overnight rate at 4.45% by next December. This is lower than the 5.1% rate forecast by Fed policymakers for next year, based on market expectations of a rate drop. US Treasury rates increased as well, with the 10-year Treasury note yield jumping to 3.52%.

GBP/USD, which has dropped 0.1% this week, the first weekly fall since the week of December 23, provided two-way trading in the US session. The bears first cleaned out the Lonodon lows, but the price rebounded in and around the US data following a knee-jerk drop. The bears ultimately regained control around the day's highs, and the price plummeted 50 pips before rising again into the day. It was between 1.2344 and 1.2430. In a similar vein, the EUR/USD traded between 1.0850 and 1.0929.

USD/CAD fell from 1.3407 to 1.3303 and continued to decrease throughout the day as commodities performed well in a weak US dollar market. In Asia on Friday, the USD/JPY rose from 129.02 to 130.61 ahead of the Japan Consumer Price Index. Commodity markets remained buoyed by optimism about the resumption of Chinese demand and a continuously lower US dollar. WTI rose 1.1% to $81.2/bbl, maintaining its stronger tone. Gold dropped 0.8% to $1,930.8/oz. Following yesterday's volatility, Bitcoin held holding above $23,200 ahead of the US data, sliding a few hundred US dollars when the results were released before rebounding back over $23,000.

27-01-2023 02:01:40

The week ahead: Will the EUR USD reach cloud 9?

The world's most traded currency pair might hit a new 9-month high this week as markets assess the latest policy signals from the US Federal Reserve and the European Central Bank.

To be clear, this will be a busy week that goes beyond important central bank decisions (the Bank of England is in action too). There will also be the largest tech profits and maybe an OPEC+ decision. In other words, the following significant economic data releases and events are poised to shake major asset classes this week:

Monday, January 30

  • NZD: New Zealand December external trade
  • CNH: Mainland China markets reopen after Lunar New Year
  • EUR: Eurozone January economic confidence
  • IMF publishes World Economic Outlook update

Tuesday, January 31

  • JPY: Japan December unemployment, retail sales, industrial production
  • AUD: Australia December retail sales
  • CNH: China December industrial profits, January PMIs
  • EUR: Eurozone 4Q GDP
  • USD: US January consumer confidence
  • Exxon Mobil earnings

Wednesday, February 1

  • NZD: New Zealand 4Q unemployment
  • CNH: China Caixin manufacturing PMI
  • EUR: Eurozone January CPI and manufacturing PMI, December unemployment
  • GBP: UK January manufacturing PMI
  • Brent: OPEC+ meeting
  • USD: Fed rate decision
  • Meta earnings

Thursday, February 2

  • EUR: European Central Bank rate decision
  • GBP: Bank of England rate decision
  • USD: US weekly initial jobless claims
  • S&P 500: Earnings from Alphabet, Apple, and Amazon

Friday, February 3

  • CNH: China January services/composite PMI
  • USD: US nonfarm payrolls report

Here are the market expectations for the Fed meeting next week:

  • On February 1st, the Fed will raise interest rates by 25 basis points (bps).
  • The Fed will raise rates by another 25 basis points following next week's meeting, but no later than June 2023.
  • These two increases would raise US interest rates from 4.5% to roughly 5%.
  • The Fed will then hold its target rate near 5% for a time before lowering interest rates later this year.

On the ECB side of things:

  • The ECB is projected to raise rates by 50 basis points next week, which is double the amount of the Fed's forthcoming move.
  • The ECB is expected to boost rates by another 75 basis points before the end of the year.

In a nutshell:

  • Fed = 50 basis point rises to remain (including next week's 25 basis point boost).
  • ECB = 125 basis point rises remaining (including next week's 50 basis point boost)

The belief that the ECB will raise interest rates more aggressively than the Fed has propelled the EURUSD to its highest level since April 2022. However, the EURUSD is stabilizing close below a critical Fibonacci level - the 50% line from its January 2021 to September 2022 decline. The market activity shows that the next move for EURUSD may be heavily influenced by what the ECB or Fed announces next week.

Potential EURUSD scenarios:

  • The EURUSD might be driven to "cloud 9" if the ECB maintains its hawkish approach while the Fed begins to consider stopping its rate rises (or at least markets do not believe any hawkish tones emanating out of the Fed next week).

Such a result is also expected to boost sentiment in other asset classes, including equities, gold, and perhaps cryptocurrency.

  • However, if the Fed initiates a larger-than-expected 50bps raise next week, it will send a clear message that US interest rates will rise over the market-expected 5% objective this year.

Markets now believe the Fed's aggressive intentions (or a combo of the above factors)

... which might quickly reverse some of the EURUSD's recent gains.

Key support/resistance levels for EURUSD:

SUPPORT

  • 1.0770 region: previous cycle low, June 2022 resistance zone
  • 1.07365: mid-December cycle high
  • 1.061 region: 38.2% Fib line and around where the 50-day simple moving average (SMA) resides

RESISTANCE

  • 1.09426: 50% Fib line
  • 1.112 – 1.114: March 2022 resistance
  • 1.11848: end-March cycle high

Markets are projecting a 70% likelihood that EURUSD will move between the 1.07 - 1.105 range over the next week, while implied volatility is back to its year-to-date high, which saw EURUSD's recent run higher.

27-01-2023 08:01:13

The PCE Price Index Falls, Putting More Pressure on the DXY.

Core PCE prices in the United States, excluding food and energy, rose 0.3% month over month in December 2022, up from 0.2% the previous month and in line with market expectations. Prices for commodities rose by 4.6 percent, while prices for services rose by 5.2 percent. Food costs rose 11.2 percent, while energy prices rose 6.9 percent. The PCE price index grew 4.4 percent year on year, excluding food and energy. This is the smallest growth rate in 14 months. Today's PCE result may put more pressure on the dollar, as markets may interpret it as a warning that the Fed will decrease the pace of rate rises sooner.

The US economy continues to defy expectations, with good first unemployment claims and GDP numbers this week. Is it necessary for the US Federal Reserve to slow the rising cycle? This is the critical question going into next week's meeting. The data continues to point to the possibility of the Fed's promised "soft landing," but there are still reasons to be cautious. Looking at the meat of US statistics, there are indicators of a recession developing, with residential construction declining for the previous six months, industrial production falling for the past three months, and retail sales falling by 1% or more in both November and December.

The overall picture does not appear to be as bright as of late, with lackluster activity expected to hold the Fed in check. Despite the Fed's aggressive stance before the blackout period, markets have altered their forecasts for the Fed Funds Peak Rate in May 2023. Markets now price in a 56% chance that the Fed Funds rate will peak at 5% in May, up from 40.8% a month ago. While the likelihood of a high rate of more than 5% by December 2023 has dropped to 3.1% from 7.8% a month ago. As a result of these adjustments, the dollar index has struggled recently, remaining near multi-month lows.

The market's Reaction

Following the announcement of the data, the dollar index fell marginally, falling below the 102.00 barriers once more. Since hitting the range bottom yesterday at 101.50, the index has attempted to rebound before rallying higher.

We've been stuck in a range for the better part of a week, with neither yesterday's GDP nor today's PCE data inspiring a breakthrough. All attention will be on whether the Fed meeting can spark a breakout. Technically, the longer a pair remains rangebound and consolidating, the more volatile the breakout when it occurs; keep this in mind as we approach next week's risk events.

28-01-2023 07:01:37

FOREX-Dollar Holds Gains on US Data; Traders Eye Fed Session Next Week

The dollar held slight gains versus the euro on Friday, despite data showing decreasing consumer spending and cooling inflation in the United States, and as investors awaited a spate of central bank meetings next week.

Consumer spending, which accounts for more than two-thirds of US economic activity, fell 0.2% last month, according to the Commerce Department. The November data was revised downward, showing that expenditure fell 0.1% rather than rising 0.1% as first reported. Consumer expenditure was expected to fall 0.1%, according to economists surveyed by Reuters.

The Commerce Department announced that the Federal Reserve's favored inflation indicator, the personal consumption expenditures (PCE) price index, climbed 0.1% in December after rising 0.1% in November.

"US PCE came in very much as predicted and will have minimal influence on the Fed's impending decision," said Simon Harvey, head of FX Analysis at Monex Europe.

"Given the Fed's inclination for the length of restrictive monetary policy, we expect a slowdown in price pressures to result in the Fed raising rates to a terminal level of 5% by March," Harvey said.

Traders of futures contracts linked to the Fed's policy rate maintained bets on Friday that the US central bank will raise interest rates just one more after next week's widely anticipated quarter-point increase before pausing. 4.25% to 4.5% is the current goal range.

The euro was 0.17% down at $1.08725, although it was still close to the nine-month high of $1.09295 set on Monday. The common currency gained roughly 0.2% last week.

The dollar was 0.25% weaker against the yen, trading at 129.89 yen, as strong Tokyo inflation data fueled speculation that the Bank of Japan (BOJ) will take a hawkish stance.

Consumer price inflation in Japan's capital reached a nearly 42-year high last month, putting pressure on the BOJ to withdraw assistance.

The focus now shifts to a flurry of central bank policy choices, with the Fed, European Central Bank, and Bank of England (BoE) all set to make rate decisions next week as they assess what policy tweaks may be needed to combat high inflation amid a challenging global economic backdrop.

"There is a lot of event risk on the horizon right now. Not necessarily in terms of rates for next week, but more of the forward guidance provided by central banks, "Harvey stated.

Sterling fell 0.12% to $1.2397 on market concerns that the British economy's slowing may compel the Bank of England to terminate its tightening cycle soon, weakening the pound in the short term.

Meanwhile, bitcoin was up 1.5% on the day at $23,337, on track to end the week up approximately 2.6%, it's the fourth straight weekly gain after significant losses caused by the high-profile collapse of the FTX crypto exchange.

28-01-2023 01:01:12

The US Dollar is Trading Mixed in Front of the Published of Report

Before the publication of December personal income, expenditure, and pricing statistics, the US dollar was mixed against its main trading partners early Friday, rising against European currencies but falling against the yen and Canadian dollar.

The Federal Reserve's favored inflation indicators, the overall and core PCE price indexes, will be the market's attention. A further slowing in these categories' year-over-year rates would go a long way toward confirming prevailing forecasts for a lesser 25 basis point rate hike at the Federal Open Market Committee meeting next week.

The final January University of Michigan attitude index, as well as December pending home sales data, will be revealed, followed by the Kansas City Fed's monthly services survey for January.

Federal Reserve officials will keep silent until after the FOMC meeting on January 31-February 1. A short recap of Thursday's foreign currency activities indicates that the EUR-USD declined to 1.0881 from 1.0891 at the Thursday US closing and 1.0902 at the same time Thursday morning.

According to figures released earlier Friday, EU money supply growth slowed in December, as did the rate of loan growth to firms. On February 2, the European Central Bank's monetary policy committee will convene, and it is likely to raise its benchmark interest rate by another 50 basis points.

GBP-USD declined to 1.2366 from 1.2419 at the US close on Thursday and 1.2394 at the same time the next day. There is no UK data on the program for Friday. The Bank of England's monetary policy committee will also convene on February 2 and is likely to raise its benchmark interest rate by 50 basis points.

The USD-JPY fell to 129.9418 from 130.2256 at the US close on Thursday, although it remained somewhat higher than the 129.8842 level at the same time Thursday morning.

The Tokyo consumer price index, a barometer for overall Japanese consumer pricing data, increased faster year on year in January, according to statistics released tonight. The next meeting of the Bank of Japan is set for March 9-10.

The USD-CAD slipped to 1.3317 from 1.3322 at the US closing on Thursday and 1.3384 at the same time on Thursday morning. The Canadian budget balance for November is set to be announced today. Following the Bank of Canada's decision on Wednesday to raise its main rate by 25 basis points and then pause, the next meeting is planned for March 8.

28-01-2023 08:01:10

United States GDP Income and Expenditure Outlooks

The US economy grew by 2.1% in 2022 compared to 2021, following a 2.9% annualized quarter-over-quarter growth rate in the fourth quarter of the year. Economic growth slowed significantly this year compared to 2021 when it increased by 5.9% over 2020. Although consumption increased 2.1% in the fourth quarter of the year versus 2.3% in the third quarter, goods consumption rebounded from a 0.4% decline in the third quarter to a 1.1% increase in the fourth quarter of the year.

Meanwhile, gross private domestic investment increased by 1.4% in the fourth quarter after falling by 9.6% in the previous quarter. Nonresidential structure investment made up the gap in the fourth quarter, increasing by 0.4% after falling by 3.6% in the previous quarter. Importantly for the Federal Reserve and inflation, the GDP price index declined further in the fourth quarter, to 3.5% from 4.4% in the third quarter. The price index for GDP declined due to a slowing in the price index for personal consumption expenditures (PCE), which dropped to 3.2% during the quarter after growing at a rate of 4.3% the previous quarter.

This slowing in the PCE price index was caused by a 1.5% drop in the price of goods, with durable goods falling 3.1% and nondurable goods falling 0.5%. However, service costs continued to rise at a little faster rate than in the third quarter. Services prices rose 5.6% in the fourth quarter of the year, compared to 5.2% in the previous quarter.

Personal income and expenditures revealed that the American consumer spent all of their money in October and very little in the remaining months of the year. In reality, both nominal and real consumption expenditures (PCE) fell in November and December, despite a fairly good reading in October. That is, the whole fourth-quarter consumption happened in the first month of that quarter. This suggests that the New Year will begin on a negative note in terms of consumption expenditures, i.e., the American consumer.

The not-so-bad news was that disposable personal income, both nominal and real, remained positive throughout the quarter, implying that the personal savings rate, or savings as a percentage of disposable personal income, increased during the quarter after falling to its lowest level since 2005 in September of 2022. Personal savings climbed from 2.4% in September 2022 to 3.4% in December 2022. Even with the robust increase in the fourth quarter, today's data on personal income and expenditures provide greater insight into the health of the US economy at the end of 2022.

Before we get into what has occurred to egg pricing in the previous year or two, let's define some terms. Inflation is not assessed by the price of a single item. Inflation is defined as a widespread increase in the price level. Inflation does not imply that all prices are rising at the same time. Inflation indicates that some prices increased, while others decreased, and that some prices remained unchanged. However, when all prices were added up and averaged out across the economy, prices climbed overall.

Furthermore, certain prices are more significant than others since they demand a bigger proportion of money. That is, an increase in the price of pencils is less harmful than an increase in the price of rent, for example. At the same time, if the price of one thing rises too quickly, we may be able to avoid purchasing it so that increased prices do not affect us. However, there are some commodities that we must consume and cannot avoid, at least in the short to medium term.

29-01-2023 08:01:09

Ethereum (ETH) Price Prediction 2025-2030: ETH is Still on the Rise

As ETH's dominance has grown, As ETH's dominance over other cryptocurrencies has increased in recent years, Ether's bullish setup against Bitcoin is evident. Bitcoin and Ethereum have both stabilized over the last week as the larger cryptocurrency market remains positive.

ETH reached a high of $1,600 last week before falling to $1,587.08 today. Its market value has climbed from $147 billion to $194 billion since last month, after briefly exceeding $200 billion a few days ago. As of press time, it had settled at $194 billion.

The value of Ethereum has lately dropped significantly, yet whales have been purchasing at each drop. Last week saw the fifth-largest accumulation day of the year, as ETH whale activity hit a new high. Because of the FTX downturn that occurred in November, Ethereum whales have accumulated.

It nearly touched the lows during the FTX collapse-driven meltdown of the cryptocurrency market, but it rapidly came back and was able to maintain above these levels as well. This reinforces the case because Ethereum has historically outperformed Bitcoin.

Given everything, buying Ethereum has to be a good long-term investment, right? The majority of advisors have optimistic forecasts for ETH. Furthermore, the vast majority of long-term Ethereum value forecasts are bullish.

Why are forecasts important?

Given Ethereum's recent meteoric rise, it's not surprising that investors are placing significant wagers on this cryptocurrency. Following a lengthy period of stasis in 2018 and 2019, Ethereum gained traction once the value of Bitcoin fell in 2020.

Surprisingly, even after the halving, a large portion of the cryptocurrency market remained dormant. Ethereum is one of the few that has gained traction quickly. By the end of 2021, Ethereum had grown by 200% from its 2017 highs.

Ethereum may see such a surge owing to several critical factors. One of them is an improvement to the Ethereum community, namely a transition to Ethereum 2.0. Another justification is the Ethereum tokenomics discussion. With the transition to Ethereum 2.0, ether tokenomics will become significantly more deflationary. As a result, there will be fewer tokens available on the market to meet increased demand. The ultimate conclusion might boost Ethereum's upward momentum sooner or later.

In this post, we'll take a quick look at the cryptocurrency market's most recent efficiency, paying special attention to market cap and quantity. The most well-known analysts' and platforms' forecasts will be summed at the end, along with a glance at the Fear & Greed Index to evaluate market mood.

Ethereum's worth, quantity, and everything in between

Around press time, Ethereum was trading at $1,591, having shown resistance in the preceding several weeks following the FTX disaster. Despite this, early investors have increased their capital year after year because of the high ROI.

Ether's spot market activity has also increased, with the cryptocurrency recently overtaking Bitcoin as the most traded coin on Coinbase.

Although it is difficult to anticipate the value of a dangerous cryptocurrency, most analysts agree that ETH will once more break the $4,000 barrier in 2022. According to Bloomberg Intelligence expert Mike McGlone's most recent projection, the value of Ethereum will end the year between $4,000 and $4,500.

Furthermore, according to a forecast published on August 1 by Kaiko, ETH's market share of purchasing and selling quantities will reach 50% parity with Bitcoin's for the first time in 2022.

According to Kaiko, ETH outperformed Bitcoin in July due to significant inflows into the spot and by-product markets. Most exchanges have witnessed this increase, which might indicate that buyers are returning. Furthermore, growth in the common commerce dimension is the exact opposite of what has been observed thus far in the 2022 downturn.

On August 2, the open interest (OI) in Deribit Ether Choices valued at $5.6 billion outpaced the OI in Bitcoin valued at $4.6 billion by 32%. This was the first time in history that ETH surpassed BTC in the Options market. The majority of cryptocurrency influencers are positive about Ethereum and expect it to reach new highs.

Because of the excitement around the merger, Ethereum has become the talk of the town. The second-largest crypto has surpassed the king of crypto to become the most in-demand coin. A quick divide of the number by the market capitalization of each crypto reveals that Ethereum's relative quantity is greater than Bitcoin's.

While the majority of the Ethereum community is working to implement the more environmentally friendly PoS model, a party has developed in support of a fork that would keep the energy-intensive PoW model.

The faction is typically made up of miners who are concerned about losing their investment in pricey mining instruments since an upgrade would render their business model worthless.

Binance has stated that inside the occasion of a fork that forms a brand new token, the ETH ticker should be reserved for the Ethereum PoS chain, adding that "withdrawals for the forked token shall be supported". Tether and Circle, two stablecoin projects, have both confirmed their support for the Ethereum PoS chain following the merger.

At the time this material was published, TradingView had the same perspective, and their technical analysis of the Ethereum value showed that it was a "Purchase" indicator for ETH.

29-01-2023 04:01:31

EUR/USD Forecast: January 29th - February 4th

The EUR/USD remains optimistic, but after reaching a level last week not seen since April 2022, the currency pair has reverted downward.

The EUR/USD pair entered the weekend near 1.08655. This appears to be a favorable result for speculators who have maintained a bullish outlook on the currency pair. Unfortunately for day traders, the EUR/USD has also given a high level of volatility while on an upward trend, and this was on the whole show last week. The EUR/USD reached a high of around 1.093000 on Thursday before falling on Friday.

The EUR/gradual USD's rise has provided consistent optimistic signals, but chasing the Forex pair is difficult if a trader is over-leveraged and bearish reversals push them out of their positions too rapidly. The approaching week promises to deliver quick outcomes that may be dynamic once more.

The Federal Reserve of the United States will deliver its Monetary Policy Statement on Wednesday, along with a 0.25% rate rise. To round off the trading action this week, the US employment report will be announced on Friday. It is also worth noting that the Bank of England will publish its interest rate decision on Thursday.

Speculators targeted and hit the EUR/USD 1.09000 ratio, however, it was not sustained

For some bullish traders, finishing the week at the 1.08655 ratio may appear to be a failure, but perspective is crucial. The highs achieved on Thursday were not seen since April of 2022, and the EUR/capacity USD's to flirt with levels over 1.09000 has not gone ignored. The currency pair's rise will never be one-way, and it would be foolhardy to pursue purchasing positions blindly. Traders must maintain a sense of reality.

Technically, the EUR/USD stays close to the 1.09000 level, and traders betting on this level are expected to be plenty. Last week's core economic statistics in the United States indicated that growth is slowing, and consumer spending showed signals of constraint on Friday.

On Wednesday of this week, the United States Federal Reserve will be a focal point

  • The Federal Reserve of the United States is likely to raise interest rates by 0.25% on Wednesday, although many financial institutions anticipate a less aggressive interest rate stance.
  • If the US Federal Reserve begins to show evidence that it recognizes the US economy is slowing and says that a more dovish interest rate policy will emerge in the medium term, the EUR/USD might strengthen.

EUR/USD Weekly Outlook:

The EUR/USD speculative price range is 1.07800 to 1.09810.

Support levels in the EUR/USD have shown the potential to climb gradually. In terms of any big downward swings, the 1.08100 ratio presently appears to be a bottom rung for the currency pair. Certainly, the EUR/USD might breach this level and fall further, but from a speculative standpoint, the incremental gain in the Forex pair's worth is appealing.

However, traders should expect a high level of volatility this Wednesday, as well as a broadening of the EUR/USD range before and after the U.S. Fed's announcement. If the Fed disappoints financial institutions, the EUR/USD might find itself swiftly testing support levels.

Traders, on the other hand, are likely to expect the US Fed to declare it will be attentive to the US economy and will contemplate just raising interest rates by 0.25% increments, and that the US central bank may consider suspending rate rises in the mid-term.

If the Fed communicates that it believes the US economy is faltering, the EUR/USD will likely climb over 1.09000 and maybe sustain value above this level. Speculative positions are expected to be placed in the first few days of trading this week, and traders should ready themselves for quick price activity. If the 1.08700 level becomes a stable foundation and the 1.08900 level flirts frequently, a break of the 1.09000 level might fuel fresh bullish momentum and quickly wipe out last week's highs.

30-01-2023 07:01:34

The Dollar is Holding Steady Ahead of a Busy Central Bank Week

The US dollar strengthened on Monday, pulling away from an eight-month low ahead of a flurry of central bank meetings this week, including the Federal Reserve's, with traders looking for information on the direction of interest rate hikes.

The US dollar index, which measures the greenback against a basket of currencies, climbed 0.03% to 101.92, easing away from the eight-month low of 101.50 sets last week.

However, it was on course for a fourth consecutive monthly loss of 1.5%, weighed down by views that the Fed was reaching the end of its rate-hike cycle and that interest rates would not have to climb as much as originally anticipated. The Sterling pound was up 0.01% at $1.24005, while the kiwi gained 0.09% to $0.6500.

Moves were muted ahead of policy meetings this week by the Federal Reserve, the European Central Bank (ECB), and the Bank of England (BoE).

"We'll range trade a little bit as the market attempts to judge how the central banks respond... I believe it'll be more about what they say than what they do for all three," said Rodrigo Catril, a currency strategist at National Australia Bank (NAB).

The Fed is largely predicted to raise rates by 25 basis points, while the ECB and BoE are expected to boost rates by 50 basis points apiece. The euro was recently 0.03% higher at $1.08705 and was on track for a monthly rise of about 1.5%, the fourth month in a row.

The euro has benefited from ECB policymakers' ongoing hawkish language and fading prospects of a major recession in the eurozone. In other news, the Australian dollar increased 0.11% to $0.71175, while the Japanese yen fell slightly to 129.94 per dollar.

Core consumer prices in Japan's capital rose at the quickest annual rate in 42 years in January, according to statistics released on Friday, putting the Bank of Japan under pressure to reduce its economic stimulus.

With China returning from its Lunar New Year break, the country's purchasing managers' index (PMI) data will be released on Tuesday. "The market will be watching... hoping not to be disappointed," said Catril of NAB.

"So far, the data from China, or the vibrations from China, support the notion that a positive reopening in terms of activity is probable." Lunar New Year vacation visits within China increased 74% over the previous year as officials lifted COVID-19 travel restrictions, according to state media on Saturday. The offshore yuan was recently trading at 6.7465 per dollar, up more than 0.1%.

30-01-2023 02:01:18

For the USD, GBP, and EUR, the Calm Before the Storm

On the currency markets today, there is a sense of quiet before the storm as traders prepare for a week of interest rate announcements that will reveal the central banks' monetary plans for 2023 throughout the US, UK, and EU.

After trading flat on Sunday, cable has stabilized below the 1.24 line and is down 0.2% this morning, while the US Dollar Index (DXY) is up approximately 0.13%.

In the longer term, DXY has lost roughly 3% from the intra-month high, a pattern that is unlikely to reverse if the Federal Reserve delivers a 25 basis point rate rise on Wednesday, as is very anticipated.

To complement the United States' northern neighbor Canada's surprise move last week, the Fed may even announce a suspension in rate rises entirely.

The Bank of England is expected to boost interest rates by 50 basis points on Wednesday, which should be a positive stimulus for the GBP/USD pair.

The EUR/USD pair scarcely moved throughout the Sunday session, a pattern that continued this morning, with the pair shedding a few pips to 1.086.

Today's Eurozone economic mood indices are predicted to indicate moderate gains in the manufacturing and service sectors.

After experiencing huge mood swings earlier this month, the EUR/GBP has steadied around 87.67p, despite scarcely registering any price activity in the last two trading days.

30-01-2023 08:01:02

USD/JPY Technical Analysis: Investors Are Anxious

In the short term, and based on the hourly chart, it appears that the USD / JPY currency pair is trading inside the confines of a cohesive triangle.

The Japanese yen excelled before last weekend and has continued to gain bullish fans in recent trade. With the Federal Reserve's announcement on a possibly aggressive US interest rate this week, the currency might suffer a setback. The bulls were unable to push the USD/JPY currency pair's price above the resistance level of 131.11. Following that, trading fell below the support level of 129.02 and ended the previous week's trades steady around the level of 129.83.

Japan's yen surged in trade on Friday after inflation in Tokyo jumped more than expected in January, a result largely interpreted as portending another move in national inflation rates when they are reported at the end of February. According to Christina Clifton, Commonwealth Bank of Australia's chief economist and FX analyst, "the high rise in the consumer price index in Tokyo for January (January) adds to the case of beginning the process of unwinding the extraordinarily liberal monetary policy."

Rising inflation and persistent uncertainty over the Bank of Japan's (BoJ) monetary policy are expected to counteract the customary negative impacts of the Bank's further quantitative easing adopted to sustain the yield curve management program, according to the experts. The Bank of Japan, for its part, maintained its vow to acquire an unlimited quantity of Japanese government bonds to enforce the 0.5% upper limit put on the 10-year rate as part of the yield curve management program, and intervened regularly throughout January to that end.

While the yen increased against all of its G20 rivals on Friday, it underperformed for the week as a whole, and it is known to be susceptible to recent rises in yield on soft US government bonds, as well as this week's Fed decision, which might be an upside risk to US borrowing prices. This comes after numerous Federal Open Market Committee (FOMC) members acknowledged the apparent slowdown in the US economy in public statements during January, but also cautioned that further rate rises are anticipated in the coming months.

While the United States has had no lack of negative economic news in recent weeks, the preliminary estimate of gross domestic product for the fourth quarter was far higher than many analysts predicted, and some official measures show the labor market is resilient. This increase in the monthly rate of inflation in December is one of the reasons why the Federal Reserve Bank may raise borrowing prices over the 5% level indicated by financial markets as a likely peak in the future months.

The USD/JPY pair's technical analysis:

  • In the short term, and based on the hourly chart, it appears that the USD / JPY currency pair is trading inside the confines of a cohesive triangle.
  • This suggests that market sentiment lacks a distinct directional tilt.
  • As a result, bearish speculators will aim for profits at 129.154 or lower at the 128.437 support.
  • The bulls, on the other side, would aim to make gains around 130.571 or higher at the 131.348 barriers.

Long term, and based on daily chart performance, it appears that the USD / JPY currency pair is trading inside the confines of a falling channel. This shows that market sentiment has a considerable long-term negative tendency. As a result, bearish speculators will want to extend the current downward trend into the 126.911 support or lower to the 123.991 support. The bulls, on the other side, will try for a comeback around 132.332 or higher at the 134.835 barriers.

31-01-2023 07:01:09

Today in Forex: The US Dollar Perks From a Risk Averse Mood

What You Need to Take Care of on Tuesday, January 31:

The US Dollar advanced modestly at the start of the week, supported by a gloomy market mood. The US dollar maintains its positive bias ahead of the Asian opening, but caution reigns supreme as the macroeconomic calendar is packed with high-level events this week.

Australia will release December Retail Sales data early on Tuesday, which is expected to be 0.3% lower than the previous month. China will also release the NBS Manufacturing and Non-Manufacturing PMIs. The first is expected to rise from 47 in November to 49.7 in December, while services output is expected to rise from 41.6 to 51.

The US Federal Reserve, the European Central Bank, and the Bank of England will announce their monetary policy decisions on Wednesday and Thursday. Market participants are now speculating on a 25 basis point (bps) rate increase. A 50 basis point rate rise is completely factored in for the ECB, while the BoE is likely to raise its benchmark rate by 50 basis points.

Earlier in the day, a group of academics and business leaders encouraged the Bank of Japan to make its 2% inflation objective a long-term ambition. According to reports, the plan also emphasized the need for interest rates to grow more by economic fundamentals and to restore Japan's bond market function.

Haruhiko Kuroda, Governor of the Bank of Japan, remarked that the central bank's first mission is price stability, and he maintained that 2% inflation is achievable given wage growth and the present easy policy. USD/JPY fell to 129.19 but concluded the day at 130.50 due to widespread US Dollar demand.

EUR/USD briefly moved above 1.0900 before settling at 1.0840. The German economy increased at an annualized rate of 1.1% in the fourth quarter of 2022, falling short of predictions of 1.3%.

In addition, according to the Harmonized Index of Consumer Prices (HICP), Spanish inflation unexpectedly jumped by 5.8% year on year in January, raising concerns ahead of the ECB's monetary policy meeting later this week.

GBP/USD has fallen to 1.2340, while AUD/USD is trading at 0.7050. The USD/CAD pair has gained to the current price of 1.3390. Spot gold is now trading at roughly $1,922 per troy ounce. Crude oil prices have fallen dramatically, with WTI presently trading around $77.70 per barrel.

31-01-2023 02:01:36

The pound is dropping velocity against the dollar, but EUR/GBP volatility remains

Cable fell further 0.4% to 1.235 during yesterday's session, confirming that the pound's advance versus the dollar in January may have peaked around the 1.240 price point.

For the time being, the pair has remained at 1.235, with a spinning-top candlestick pattern indicating a general atmosphere of hesitation among traders ahead of the UK, EU, and US central bank interest rate announcements due for the next two days.

Even though a dovish 25-basis-point (bps) rise from the Federal Reserve is widely predicted, the dollar seems well supported this week, with the US Dollar Index (DXY) rising 0.35% to 101.86 yesterday and rising further to 101.88 in this morning's opening hours.

One immediate consequence of the rate-hike cycle in the United States has been a dramatic increase in overnight federal funds borrowing as deposit withdrawals force banks to seek liquidity from other sources.

According to Bloomberg, the daily government funds borrowing reached a seven-year high of US$120 billion on January 27.

EUR/USD fell from an intraday high of 1.091 to conclude Monday 0.2% down at 1.084, with more losses expected this morning.

EUR/GBP concluded 0.2% higher at 87.84p on Monday, but traders pushed the pair down 10 pips to 87.74p today, making it the most volatile trading pair right now.

The UK consumer credit borrowing is due later this morning, according to the economic calendar. Spending increased dramatically in November in anticipation of the Christmas season, while December numbers are anticipated to reveal that consumers are beginning to reign down their spending.

Eurozone GDP growth will be revealed later, with year-on-year forecasts pointing to a 40 basis point decrease to 1.8% in the fourth quarter of 2022.

FX Empire logo