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Forex News Timeline

Tuesday, January 19, 2021

AUD/USD is melting to the downside across the time frames in what is expected to be a 50% mean reversion of the monthly bullish impulse. The following

AUD/USD is in the hands of the bears as it starts to correct the monthly bullish impulse. The price has been rejected by the daily M-formation's neckline and resistance.AUD/USD is melting to the downside across the time frames in what is expected to be a 50% mean reversion of the monthly bullish impulse.  The following illustrates the downside in motion across the monthly, weekly and daily charts. The 4-hour chart is well entrenched in bearish territory having been rejected at the daily M-formation's neckline.  Monthly chart The market has topped mid-month. A downside continuation would be expected to make its way to the prior resistance in a 50% mean reversion.  Weekly chart The price is correcting and is on course towards the prior resistance structure that now would be expected to act as support and slow down the bearish momentum.  Daily chart The price has been rejected at the M-formation's resistance. 4-hour chart With the price well entrenched in bearish territory according to the indicators, the market would be expected to continue to melt in accordance with the long-term bearish corrective bias. 

EUR/GBP has nudged a little higher on Tuesday, with focus more on US fundamentals (US Treasury Secretary nominee Janet Yellen’s testimony to Congress

EUR/GBP has nudged a little higher on Tuesday, with focus more on US fundamentals.The pair swung either side of 0.8900 as bears continue to eye key support to the downside in the 0.8850s.EUR/GBP has nudged a little higher on Tuesday, with focus more on US fundamentals (US Treasury Secretary nominee Janet Yellen’s testimony to Congress stole the limelight) as opposed to European fundamental themes. The pair has swung either side of the 0.8900 mark, with the bears still eyeing a test of key support to the downside in the 0.8850s. Eurozone Update Aiding the EUR are reports suggesting that Italian PM Giuseppe Conte is getting close to securing a majority in the Senate ahead of a confidence vote on his government. He needs to secure 161 votes in order to guarantee a majority and is currently reported to have around 156/157 votes, but this might be enough if the Viva Italia Party’s 18 members (who triggered the crisis that the government currently faces by pulling out of the coalition over disagreements on how the spend the EU Recovery Fund money) abstain. The latest reports suggest they will. At the very least, an election seems unlikely at this point, with a majority of Italian political parties preferring not to hold an election in the midst of the pandemic and before EU rescue funding is allocated. In other news, Germany confirmed that it would be extending its current lockdown restrictions until at least 14 February, as indicated over the weekend. Meanwhile, ECB governing council member Mario Centeno spoke of the need to expand the euro’s international role, but noted that the eurozone will face a significant challenge in doing so. Finally, the reaction to the Tuesday morning session release of stronger than expected German ZEW numbers for January had limited impact, with focus instead on the more widely followed January Markit flash PMI release on Friday. UK News The latest daily UK Covid-19 statistics were mixed; on the one hand, cases rose 33,355, another decline and down from over 70K additional cases a little over a week ago. The rapid drop in the infection rate shows that the latest lockdown is working, or at the very least that after meeting with family and friends over Christmas (contributing to the spike to more than 70K cases per day), the nation has drastically reduced its number of social contacts. However, 1,610 were reported to have died after testing positive with Covid-19 in the last 28 days, a new record number daily number that suggests, as far as the hospitals are concerned, the worst is far from yet over. Meanwhile, according to government sources, top officials are realising that tough restrictions are likely to remain in place in large UK cities perhaps even as late as May given the high level of infections. Much depends on what happens with the death rate over the coming weeks as more and more of the most vulnerable in the UK are vaccinated; most analysts assume there will be a fast drop off in the death rate as those most likely to die acquire immunity. As the death rate drops, policymakers are likely to have a more difficult time justifying why strict lockdowns should remain in place. Given its vaccination lead, the UK is still likely to be able to fully open up ahead of its developed market peers. Elsewhere, Bank of England Chief Economist Andy Haldane sounded quite hawkish, as is typically the case; he said that QE is a temporary action to keep borrowing costs low and, somewhat interestingly in a world of central bankers who are for the most part desperate for more inflation, said that the UK does not need higher inflation that would cause borrowing costs to rise.  

Bank of England’s Andy Haldane says the bounce back from Covid may be sharper than the financial crisis. Says hopes furloughs continues to ‘keep a lid

Bank of England’s Andy Haldane says the bounce back from Covid may be sharper than the financial crisis. Says hopes furloughs continues to ‘keep a lid on unemployment’. More to come...

Janet L. Yellen, President-elect Joseph R. Biden’s nominee to be Treasury secretary, says the US must make investments to enable it to compete with Ch

Janet L. Yellen, President-elect Joseph R. Biden’s nominee to be Treasury secretary, says the US must make investments to enable it to compete with China. Says regards China as most important strategic competitor to US. Says China is 'guilty of horrendous human rights abuses'. Says US must make investments to enable it to compete with China.   More to come...

Janet L. Yellen, President-elect Joseph R. Biden’s nominee to be Treasury secretary, said at her confirmation hearing on Tuesday that she fears there

Janet L. Yellen, President-elect Joseph R. Biden’s nominee to be Treasury secretary, said at her confirmation hearing on Tuesday that she fears there are difficult months ahead before the vaccine is distributed widely enough to fully reopen economy.  Yellen says we should not think about tax increases in the abstract but in the context of a larger investment program. She also said that the US needs to address that China poses, saying that the regime is guilty of human rights abuses.  More to come...

GBP/USD has crawled above the 1.3600 level in recent trade and currently trades close to highs of the day in the 13620s, up about 0.3% or 40 pips on t

GBP/USD has crawled above the 1.3600 level in recent trade and currently trades close to highs of the day in the 13620s.The main event of the day has been Yellen’s testimony to Congress, which did not deliver fireworks.The latest daily UK Covid-19 statistics were mixed.GBP/USD has crawled above the 1.3600 level in recent trade and currently trades close to highs of the day in the 13620s, up about 0.3% or 40 pips on the day. The move has primarily been driven by USD weakness; the Dollar Index has dropped back below the 90.50 mark from earlier weekly highs close to 91.00. As US flow returned after MLK day on Monday, markets have adopted a more upbeat mode (US stocks, crude oil and industrial metals all up). The main event of the day has been US Treasury Secretary nominee Janet Yellen’s confirmation testimony to Congress; as expected, she called for “big” spending (in line with incoming US President Joe Biden’s stimulus plans) to take advantage of the low rate environment and indicated a hands-off approach to USD exchange rates. Given that most of her testimony was leaked over the weekend, the market reaction to her remarks has been muted. FX market attention now turns to Biden’s inauguration on Wednesday for more on the incoming administration's plans for the US economic recovery. UK News The latest daily UK Covid-19 statistics were mixed; on the one hand, cases rose 33,355, another decline and down from over 70K additional cases a little over a week ago. The rapid drop in the infection rate shows that the latest lockdown is working, or at the very least that after meeting with family and friends over Christmas (contributing to the spike to more than 70K cases per day), the nation has drastically reduced its number of social contacts. However, 1,610 were reported to have died after testing positive with Covid-19 in the last 28 days, a new record number daily number that suggests, as far as the hospitals are concerned, the worst is far from yet over. Meanwhile, according to government sources, top officials are realising that tough restrictions are likely to remain in place in large UK cities perhaps even as late as May given the high level of infections. Much depends on what happens with the death rate over the coming weeks as more and more of the most vulnerable in the UK are vaccinated; most analysts assume there will be a fast drop off in the death rate as those most likely to die acquire immunity. As the death rate drops, policymakers are likely to have a more difficult time in justifying why strict lockdowns should remain in place. Given its vaccination lead, the UK is still likely to be able to fully open up ahead of its developed market peers. Driving the week for sterling Next up, Bank of England Chief Economist Andy Haldane will be speaking. On Wednesday, focus will then turn to the release of December Consumer and Producer Price Inflation numbers and then on Friday to December Retail Sales and January flash PMIs.  

Gold is rising modestly on Tuesday, on the back of a weaker US dollar and US yields. It peaked on European hours at $1845 and recently at $1842. It is

The metal gains but fails to break $1845.A pullback in Wall Street and a stabilization of the US dollar limited gold.Gold is rising modestly on Tuesday, on the back of a weaker US dollar and US yields. It peaked on European hours at $1845 and recently at $1842. It is hovering around $1840, up for the second day in a row. The yellow metal bottomed at $1833 and quickly rebounded; the move lower took place amid a correction in equity prices in Wall Street that trimmed gains. The US dollar is falling across the board. Over the last hours, it managed to stabilize, but the recovery failed to gain momentum. The DXY stands below 90.50 and is starting to look to the daily low. The US bond market opened after Monday’s holiday. The 10-years yield bottomed at 1.08% and then rebounded to 1.10%. The reaction to Yellen’s testimony has been limited. She spoke about supporting the economy at times when interest rates at historic lows. Her words offered nothing new to market participants. From a technical perspective, the short-term bias in gold looks biased to the upside. The XAU/USD faces a strong resistance at $1845 that if broken, could allow for an extension toward $1855/60. On the flip side, if gold drops and consolidates below $1835, it would point to a test of $1830. Technical levels  

Further to the prior analysis, EUR/USD embarking on a bullish correction, 1.2120 eyed, the price has completed a 50% mean reversion of the bearish imp

EUR/USD meets resistance following a string correction.DXY on the verge of bringing in the buyers for an upside continuation of the correction. Further to the prior analysis, EUR/USD embarking on a bullish correction, 1.2120 eyed, the price has completed a 50% mean reversion of the bearish impulse as the US dollar corrects within its own retracement.  The following is a top-down analysis which illustrates the market structure and potential for a downside continuation in the euro.  Casting eyes back over the prior analysis, The Chart of the Week: EUR/USD enters the bear's lair, there was a weekly bias to the downside, but the price action was forecasted as follows: Live market: At this juncture, the price would be expected to extend to the downside and test the demand area properly: Daily chart The US dollar can be monitored for a continuation of the upside correction from here. DXY daily chart EUR/USD 4-hour chart The correction has been strong and it has broken the dynamic resistance.  The 4-hour time frame can be monitored for supply from the structure for a continuation to the downside. 

USD/CAD has been choppy in recent trade, rallying from Asia Pacific and European morning levels under 1.2750 to briefly as high as the 1.2760s ahead o

USD/CAD has seen choppy trade but is trading back at lows of the day in the 1.2720s.Downbeat data and continued concerns over the expected cancellation of Keystone pipeline have failed to weigh on the loonie.Markets have remained in an upbeat mood throughout the duration of Yellen’s Senate testimony thus far.USD/CAD has been choppy in recent trade, rallying from Asia Pacific and European morning levels under 1.2750 to briefly as high as the 1.2760s ahead of US Treasury Secretary nominee Janet Yellen’s testimony to Congress (she is expected to be appointed), before dropping back towards lows of the day around the 1.2720s in more recent trade. Helping cap the price action at the time was the pair’s 21-day moving average, which currently resides at 1.27628. On the day, the pair trades with losses of around 0.2% or 25 pips, with the loonie boosted amid a favourable tone to risk appetite and higher crude oil prices. Downbeat Manufacturing and Wholesale sales numbers for November (the former dropped 0.6% MoM versus expectations for a decline of 0.1% while the latter rose 0.7% MoM, less that expectations for 1.0%) have failed to dent sentiment towards the loonie. Meanwhile, another domestic theme to keep an eye on will be whether Canadian PM Justin Trudeau can persuade incoming US President Joe Biden to allow the continuation of the Keystone XL pipeline project, the scrapping of which will deliver a blow to the Canadian economy and the prospects for the country’s crude oil export growth. The PM is set to speak to the Alberta Premier later today on the topic. Yellen testimony mostly as expected thus far… In her opening remarks, the nominee for position of US Treasury Secretary Janet Yellen effectively endorsed incoming US President Joe Biden’s fiscal stimulus plan, saying that she believes there is a consensus that without further fiscal action, the economy will face deeper scarring at a later date. More aid will be needed in the coming months, she said. When asked about the new administration’s policy on the US dollar, Yellen said (as expected) that she believes in a market-determined exchange rate. Regarding taxes, Treasury Secretary nominee Yellen echoed recent remarks from President-elect Biden, saying that she believes in a fair, progressive tax code where the wealthy and corporations pay their fair share. When asked about potential incoming corporation tax hikes, Yellen noted that President-elect Biden has said he would tweak the 2017 tax cuts but would not completely repeal them. She hinted that such tweaks would not happen immediately. On the debt, Yellen agreed that it is essential to (eventually) put the federal budget onto a sustainable path, but noted that we are in a very low-interest rate environment which represents structural shifts that are likely to be with us for some time. Still, the US needs to watch deficits, she said, though given her endorsement of Biden’s $1.9T rescue package and subsequent, perhaps equally as large, recovery package, she does not seem overly concerned about the 2021 and 2022 fiscal deficits. Finally, Yellen hinted at the prospect of a wealth tax; capital gains should be taxed at some point, she suggested, arguing that mark to market is one method to look at, but different approaches will be examined. The remarks are very much in line with what was leaker over the last few days and what markets had been expecting for some time, why there was not much of a market reaction. Note that US bond yields, which had been up on the day, dropped back from highs, perhaps a reflection of a slightly stronger tone on the need for long-term budget sustainability than expected. USD/CAD still trending to the downside USD/CAD is still trending to the downside when looked at over a longer time horizon; the pair currently resides within a downwards trend channel, constrained to the upside by a downtrend linking the 13 and 23 November, 21 and 21 December and January 2021 highs. The fact that the pair failed to break above this key downtrend earlier in the week implies further losses back towards 2021 lows in the 1.2620s is more likely than not.USD/CAD 12-hour chart

The USD/JPY retreated further from 104.07 and fell to 103.84, the lowest level since the Asian session. It is moving with a bearish bias, still positi

US yields break to the downside during Yellen’s testimony.USD/JPY moving sideways above the 20-day SMA.The USD/JPY retreated further from 104.07 and fell to 103.84, the lowest level since the Asian session. It is moving with a bearish bias, still positive for the day but off highs. A decline in US yields and a correction in equity prices weakened the pair. In Wall Street, the Dow Jones is up by just 0.35%, and the Nasdaq gains 0.80%, both off highs. The correction lower took place as US yields also declined. The 10-year fell from 1.11% to 1.08% in a few minutes. A consolidation of the 10-year under 1.07% would point to lower levels, potentially boosting the yen. The move took place as Janet Yellen speaks at the confirmation hearing in the Senate. She mentioned several times that with interest rates at historic lows, it is time to invest, to act big. The US dollar is holding onto losses across the board. The DXY stands at 90.48, retreating after hitting on Monday the highest level in a month. The dollar’s decline kept the USD/JPY limited to the upside. The pair continues to move sideways supported by the 20-day moving average, today at 103.55. A close under 103.50 would weaken the outlook for the dollar. On the upside, the key level is seen near 104.40, a downtrend line that should negate the current bearish bias if broken. Technical levels  

Janet Yellen, the nominee for Treasury Secretary, has said the environment is lof low-interest rates, making the case for investment. Ten-year Treasur

Janet Yellen, the nominee for Treasury Secretary, has said the environment is lof low-interest rates, making the case for investment. Ten-year Treasury yields have dropped to 1.092% from near 1.12% earlier in the day.  She has stressed that Congress should approve additional fiscal support to prevent scarring of the economy rather than worrying about debt. She has pointed to a steady rate of debt-to-GDP despite the ballooning absolute amount of liabilities. Yellen has also called for more investment.  The US Dollar is stable, with EUR/USD hovering around 1.2120.  Janet Yellen confirmation hearings for Treasury Secretary live stream

Treasury Secretary nominee Janet Yellen has been testifying in front of the Senate Finance Committee and has called on Congress to act to support the

Treasury Secretary nominee Janet Yellen has been testifying in front of the Senate Finance Committee and has called on Congress to act to support the struggling economy. The former Federal Reserve Chair has stressed that interest rates are at historic lows, enabling broad action.  Yellen has added that she aims to have a competitive economy that creates jobs. She also notes high-income inequality and promises to focus on the needs of American workers. Yellen has stated that she will work overtime for a second coronavirus relief package.  On taxes, the Treasury Secretary nominee has said that she believes in a fair and progressive tax code.  The S&P 500 is trading marginally higher, just below 3,800 points. EUR/USD is hovering around 1.2130. 

Janet Yellen, nominee for Treasury Secretary has said that she wants to reverse some of the incentives to offshoring made available in the tax bill pa

Janet Yellen, nominee for Treasury Secretary has said that she wants to reverse some of the incentives to offshoring made available in the tax bill passed by President Donald Trump in 2017. She has expressed interest in bringing taxes back homes and also making US companies competitive on the global stage.  The S&P 500 is trading above 3,780, but off the highs as Yellen hints at tax changes.  Yellen has also stated that President-elect Joe Biden is interested in incentivizing electric cars, including infrastructure. The former Federal Reserve Chair has added that climate change is a critical problem.

The NZD/USD pair is back near weekly lows after hitting at the beginning of the American session 0.7133. It turned to the downside and printed a fresh

US dollar moves off lows in New York as Yellen’s speaks.NZD/USD with a bearish bias, looking at the 0.7100 area.The NZD/USD pair is back near weekly lows after hitting at the beginning of the American session 0.7133. It turned to the downside and printed a fresh daily low at 0.7101. As of wiring, it trades at 0.7110, around Monday’s close. The move off highs in NZD/USD took place amid a modest recovery of the US dollar across the board and following a correction in equity prices in Wall Street. Main indexes are in positive ground but off highs. Market participants are hearing from Treasury secretary nominee Janet Yellen at the Senate. She mentioned that considering interest rates are at historic lows, the smartest thing is to act big. The DXY is falling by 0.28%, trading around 90.50, hit by risk appetite. The kiwi is among the weakest currencies on Tuesday. AUD/NZD climbed to 1.0840, the highest level in three months. From a technical perspective, the NZD/USD is still under pressure. The recovery from Monday’s low has been short-lived. So far on Tuesday, the pair has been able to hold above 0.7100. A break lower would open the door to more losses. On the upside, the key level could be seen at 0.7150/55 (horizontal level and the 20-SMA in 4-hour chart); a consolidation above should alleviate the bearish pressure. Technical levels  

Treasury Secretary nominee Janet Yellen has said that the US believes in market-determined exchange rates. She has added that the US under president-e

Treasury Secretary nominee Janet Yellen has said that the US believes in market-determined exchange rates. She has added that the US under president-elect Joe Biden will not seek a weaker dollar to gain a competitive advantage and they will both work to address countries who do so. The former Fed Chair has also spoken about China, characterizing it as an important and strategic competitor. She has said that she will work with allies to confront Beijing and take on the country's abusive, unfair and illegal practices.  Yellen is testifying before the Senate Finance Committee. 

Crude oil markets trade on the front foot on Tuesday amid a broad recovery in the market’s appetite for risk, as traders eye incoming US Treasury Secr

Crude oil markets trade on the front foot on Tuesday amid a broad recovery in the market’s appetite for risk.WTI trades just to the south of the $53.00 handle.The monthly IEA report was downbeat but failed to deliver any meaningful dent to bullish oil market sentiment.Crude oil markets trade on the front foot on Tuesday amid a broad recovery in the market’s appetite for risk, as traders eye incoming US Treasury Secretary Janet Yellen’s testimony for Congress for more impetus behind the recent inflation trade. So far, Yellen is expected to heavily endorse incoming US President Joe Biden’s proposed $1.9T stimulus package, is not expected to signal too much concern regarding the US’ growing mountain of debt and is also expected to indicate that the government will be taking a hand-off approach to USD exchange rates. WTI trades just to the south of the $53.00 handle, up about 60 cents or a little over 1% on the day, with a break above the psychological level opening the gates to another test of recent highs in the $53.80s. A break above this double top area of resistance would open the door to a resumption in the gradual grind back towards the $60s, in line with the bullish forecasts that have been made by many institutions in recent weeks.  Downbeat IEA forecasts fail to dampen bullish oil market sentiment The International Energy Agency’s monthly oil market report this morning was downbeat, but failed to deliver any meaningful dent to bullish oil market sentiment; the agency downgraded its forecast for Q1 oil demand growth by a chunky 600K barrels per day, a reflection of resurgent Covid-19 cases and associated lockdowns in major economies. The agency reduced its demand growth for the full year of 2021 by 300K barrels per day. The third of the major monthly oil market reports chimed with the monthly Short-Term Energy Outlook report released last week, that also downgraded its forecast for oil demand growth in 2021.  

German Chancellor Angela Merkel has agreed with state leaders to extend the nationwide lockdown through February 14. Europe's largest economy has been

German Chancellor Angela Merkel has agreed with state leaders to extend the nationwide lockdown through February 14. Europe's largest economy has been struggling with a significant wave of coronavirus cases and deaths.  In Italy, the eurozone's third-largest economy is encountering a political crisis. The government survived a vote of no-confidence in the lower house and political analysts suggest that Prime Minister Giuseppe Conte has mustered enough support in the Senate.  EUR/USD is trading around 1.2130, as markets are following the testimony of former Federal Reserve Chair Janet Yellen. See Janet Yellen confirmation hearings for Treasury Secretary live stream

In the view of Jane Foley, Senior FX Strategist, the Bank of Japan (BoJ) is unlikely to deviate from the current accomodative way as this would cause

In the view of Jane Foley, Senior FX Strategist at Rabobank, the Bank of Japan (BoJ) is unlikely to deviate from the current accomodative way as this would cause an unwanted appreciation of the yen.  Key quotes “For now, the BoJ will want to promote an image of a Bank focussed on policy stimulus. Over 60% of the economy is now in a state of emergency due to an increase in covid cases and any divergence from the accommodative paths set by the ECB and the Fed could result in an unwanted appreciation of the JPY. Any changes in BoJ policy and in the JGB curve could have an impact on the JPY.” “We currently expect USD/JPY to trade mostly in the 103/104 range in the months ahead.”   

Janet Yellen, the nominee for Treasury Secretary is testifying before the Senate and asking politicians to go "big." The former Chair of the Federal R

Janet Yellen, the nominee for Treasury Secretary is testifying before the Senate and asking politicians to go "big." The former Chair of the Federal Reserve is familiar with both fiscal and monetary stimulus that XAU/USD bulls are eager to hear of.  How is the precious metal positioned on the technical graphs? The Technical Confluences Indicator is showing that gold has some support at $1,835, which is the convergence of the Bollinger Band 15min-Lower, the BB 1h-Lower and the Fibonacci  38.2% one-week.  The most substantial cushion is $1,826, which is the meeting point of the Fibonacci 61.8% one-month and the Fibonacci 38.2% one-day.  Some resistance is at $1,846, which is the confluence of the previous 4h-high and the Fibonacci 61.8% one-week.  Further above, the upside target is $1,857, which is a juncture including the SMA 200-1h and the BB 4h-Upper.  XAU/USD resistance and support levels Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

New Zealand GDT Price Index climbed from previous 3.9% to 4.8%

Janet L. is testifying before the US Senate Committee on Finance, in her confirmation hearings to become Secretary of the Treasury. The former Chair o

Janet L. is testifying before the US Senate Committee on Finance, in her confirmation hearings to become Secretary of the Treasury. The former Chair of the Federal Reserve is set to call on Congress to act "big" in approving vast fiscal stimulus. Here is a live stream of her testimony: Comments about America's dollar policy, lending programs, and other topics will be closely scrutinized by lawmakers, one day before President-elect Joe Biden enters the White House.  More Yellen Testimony Cheat Sheet: Three factors set to rock stocks and the dollar

Spot silver (XAG/USD) prices are up on Tuesday, with the metal crossing back above and remain supported to the north of the $25.00 per troy ounce mark

Spot silver is up on Tuesday, with the metal supported to the north of $25.00.US flow has returned after MLK Day in the US on Monday and the mood of the market is upbeat.Yellen’s testimony to Congress will be the market's main immediate focus.Spot silver (XAG/USD) prices are up on Tuesday, with the metal crossing back above and remain supported to the north of the $25.00 per troy ounce mark. At present, the precious metal trades with gains of about 0.5% or just over 10 cents, supported primarily by the weaker US dollar (the Dollar Index has dropped back below the 90.50 mark from Monday’s near 91.00 highs). Driving the day US flow has returned after North American market closures there on account of Monday’s MLK Day holidays and the mood of the markets has become a little more upbeat; US equities just saw a positive open, US bond yields are higher, crude oil and industrial metal markets are (for the most part) up and in FX, safe-haven USD and JPY are currently underperforming. No theme or news, in particular, can be pointed to as to why markets are in a slightly more optimistic mood on Tuesday. Seemingly, the main driver has been a technical correction of Monday’s risk-off flows with markets actually in much more of a “wait and see mode” ahead of key risk events coming up. Speaking of key risk events, the main focus on the mind of investors this Monday is going to be incoming US Treasury Secretary Janet Yellen’s testimony to the Senate Finance Committee in Congress. Most of the key parts of her testimony have already been leaked to the media. On fiscal stimulus; she is expected to call for the US government to “act big” in terms of fiscal stimulus given the low-rate environment (effectively an endorsement of incoming US President Joe Biden’s $1.9T fiscal stimulus package). In the past, Yellen has advocated for the US to pursue a balanced budget, but is not expected to do so on Tuesday. Regarding the US dollar; Yellen is expected to clarify that the US will be taking a “hands-off” approach to exchange rates, which might also be accompanied by a thinly veiled warning to US trade partners that they ought to do the same (rather than actively seeking to weaken their currency to boost exports). After Yellen speaks, trade ought to quiet down for the rest of the session. Depending on how the US dollar reacts, precious metals markets will likely act as a function of this. As ever, traders would be wise to also keep an eye on any reaction in real yields and inflation expectations; any drop in the former and move higher in the latter could come as a boost to the likes of silver and gold.  

Sellers seems to have turned up around the greenback and lift EUR/USD back above the 1.2100 mark on turnaround Tuesday. EUR/USD up on USD-selling, loo

EUR/USD regains the smile and retakes 1.2100 and above.German, EMU Economic Sentiment surprised to the upside.Janet Yellen testifies before the Senate later on Thursday.Sellers seems to have turned up around the greenback and lift EUR/USD back above the 1.2100 mark on turnaround Tuesday. EUR/USD up on USD-selling, looks to Yellen EUR/USD finally regains the smile following four consecutive daily pullbacks and looks to extend the rebound from Monday’s new 2021 lows in the mid-1.2500s. The softer tone surrounding the buck gives extra legs to the recovery in EUR/USD beyond 1.2100 the figure, while positive results from the euro area also collaborates with the bid bias in EUR. In fact, and tracked by the ZEW survey, the Economic Sentiment in Germany improved to 61.8 for the month of January and rose to 58.3 in the broader euro area, confirming the upbeat morale in the region amidst the vaccine rollout and despite rising coronavirus cases. Across the pond, ex Fed Chief Janet Yellen will testify before the Senate Finance Committee, as President-elect Joe Biden nominated her to Treasury Secretary. In the US data space, November’s TIC Flows will be the only release later on Monday. What to look for around EUR The leg lower in EUR/USD seems to have met decent contention in the mid-1.2000s for the time being. Despite the recent corrective downside, the outlook for EUR/USD remains constructive and appears supported by prospects of a strong recovery in the region (and abroad), which is in turn underpinned by extra fiscal stimulus by the Fed and the ECB. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR along with the huge long positioning in the speculative community. EUR/USD levels to watch At the moment, the pair is up 0.47% at 1.2131 and a break above 1.2349 (2021 high Jan.6) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018). On the flip side, the next support is located at 1.2046 (55-day SMA) seconded by 1.2053 (2021 low Jan.18) and finally 1.1976 (50% Fibo of the November-January rally).

The USD/CAD pair extended the previous day's rejection slide from the 1.2800 mark and witnessed some selling on Tuesday. The mentioned handle coincide

USD/CAD retreated further from a descending trend-line resistance tested on Monday.The intraday downfall now seems to have found a decent support near 200-hour SMA.Mixed oscillators on hourly/daily charts warrant some caution for aggressive traders.The USD/CAD pair extended the previous day's rejection slide from the 1.2800 mark and witnessed some selling on Tuesday. The mentioned handle coincides with a short-term descending trend-line and should now act as a key pivotal point for short-term traders. Meanwhile, the downfall lacked any follow-through selling and the USD/CAD pair, for now, seems to have formed a base near 200-hour SMA. Hence, it will be prudent to wait for a convincing break below the mentioned support before positioning for any further decline. A fresh leg up in the US Treasury bond yields extended some support to the USD. This, along with the reluctant to place any aggressive bets ahead of the BoC decision on Wednesday, held investors from placing any directional bets and might help limit the downside. Technical indicators on the daily chart – though have been recovering from the negative territory – are yet to confirm a bullish bias. Moreover, oscillators on the 4-hourly charts are holding in the neutral territory and further warrant caution for aggressive traders. That said, sustained weakness below the 1.2725 region (200-hour SMA) might prompt some aggressive technical selling and turn the USD/CAD pair vulnerable to break below the 1.2700 mark. The downward trajectory could then drag the pair towards the 1.2665 support area. On the flip side, immediate resistance is pegged near the 1.2760 region, above which bulls are likely to make a fresh attempt to conquer the 1.2800 mark. Some follow-through buying should pave the way for an extension of the recent recovery move from multi-year lows. USD/CAD 1-hourly chart Technical levels to watch  

The improved sentiment surrounding the single currency motivates EUR/JPY to partially reverse the recent sharp leg lower and reclaim the key 126.00 ma

EUR/JPY pushes higher and surpasses the 126.00 mark.The softer greenback lends support to the euro on Tuesday.ECB, BoJ remains the salient events later this week.The improved sentiment surrounding the single currency motivates EUR/JPY to partially reverse the recent sharp leg lower and reclaim the key 126.00 mark and beyond. EUR/JPY now targets the YTD tops at 127.50 EUR/JPY halts a 7-day negative streak after being rejected from so far yearly tops in the mid-127.00s earlier in the month. Tuesday’s correction lower in the greenback lends fresh oxygen to the single currency so far and helps the cross to bounce off Mondays’ 2021 lows just above 125.00 the figure. Indeed, while US markets resume the normal activity after Monday’s MLK Day holiday, the dollar looks offered amidst a consolidative mood in yields of the US 10-year reference just below the 1.12% yardstick. Earlier in the euro docket, the ZEW Survey showed the Economic Sentiment in both Germany and the broader Euroland improved to 61.8 and 58.3, respectively, for the current month. Across the pond, the only release will be the TIC Flows for the month of November. Later in the week, all the attention will be on the ECB and BoJ monetary policy meetings. EUR/JPY relevant levels At the moment the cross is gaining 0.77 at 126.15 and faces the next up barrier at 127.49 (2021 high Jan.7) followed by 130.18 (monthly high Nov.7 2018) and then 133.13 (monthly high Sep.21 2018). On the other hand, a drop below 125.08 (2021 low Jan.18) would aim for 124.75 (100-day SMA) and finally 124.55 (50% Fibo of the November-January rally).

The EUR/USD pair recovered on a better market’s mood, hitting a daily high of 1.2137 and trading nearby ahead of Wall Street’s opening. Bulls will hav

The EUR/USD pair recovered on a better market’s mood, hitting a daily high of 1.2137 and trading nearby ahead of Wall Street’s opening. Bulls will have better chances above the 1.2170 mark, Valeria Bednarik, Chief Analyst at FXStreet, reports. Key quotes “There are no fireworks across financial markets, as investors await for Janet Yellen. The former Federal Reserve’s head has been nominated as Treasury Secretary by Joe Biden and will speak before the Senate Finance Committee.” “Data coming from Europe was generally encouraging, although still reflecting the effects of the pandemic in economic progress. German inflation was confirmed at -0.3% YoY in December, while the ZEW Survey showed that the Economic Sentiment improved to 61.8 in January from 55 in the previous month. The index for the EU came in at 58.3, improving from 54.4.” “The EUR/USD pair has recovered from around the 38.2% retracement of its November/January rally at 1.2062 but remains below the next Fibonacci level at 1.2170. Bulls will likely retake control on a break above this last.”  

The GBP/USD pair maintained its bid tone through the early North American session and was last seen hovering near the top end of its daily trading ran

GBP/USD regained positive traction on Tuesday and built on the overnight bounce.The upbeat market mood weighed on the safe-haven USD and remained supportive.Rallying US bond yields helped limit the USD losses and capped gains for the major.The GBP/USD pair maintained its bid tone through the early North American session and was last seen hovering near the top end of its daily trading range, around the 1.3615-20 region. The pair built on the previous session's intraday bounce of around 80 pips and gained some follow-through traction during the first half of the trading action on Tuesday. The uptick was supported by the emergence of some US dollar selling, through lacked any strong bullish conviction. The prevalent upbeat market mood – as depicted by a positive trading sentiment around the equity markets – prompted some profit-taking around the safe-haven USD. The already upbeat market mood got an additional boost amid the increasing likelihood for additional US fiscal stimulus measures. The market has been pricing in the prospects for more aggressive fiscal spending in 2021 under Joe Biden's presidency. The bets increased further after reports indicated that US Treasury Secretary nominee Janet Yellen will urge lawmakers to act big to avert a protracted downturn. Against the backdrop of expectations for a larger government borrowing, the risk-on flow triggered a fresh leg up in the US Treasury bond yields. This, in turn, might help limit the USD losses and keep a lid on any runaway rally for the GBP/USD pair, at least for the time being. Apart from this, the imposition of more travel restrictions in the UK further held the GBP bulls from placing aggressive bets. This makes it prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move for the GBP/USD pair. In the absence of any major market-moving economic releases, Tuesday's key focus will be on Janet's confirmation hearing before the Senate Finance Committee. This, along with the broader market risk sentiment, might influence the USD price dynamics and produce some trading opportunities around the GBP/USD pair. Technical levels to watch  

Canada Manufacturing Sales (MoM) below forecasts (-0.1%) in November: Actual (-0.6%)

Canada Wholesale Sales (MoM) below forecasts (1%) in November: Actual (0.7%)

The AUD/USD pair held on to its modest daily gains, albeit seemed struggling to build on the momentum. The pair was last seen trading around the 0.771

AUD/USD regained positive traction on Tuesday amid renewed USD selling.The risk-on mood was seen as a key factor weighing on the safe-haven USD.Rallying US bond yields extended some support to the USD and capped gains.The AUD/USD pair held on to its modest daily gains, albeit seemed struggling to build on the momentum. The pair was last seen trading around the 0.7710-15 region, up 0.45% for the day. The pair regained positive traction on Tuesday, snapping two consecutive days of the losing streak and recovered the overnight losses to near two-week lows. The prevalent upbeat market mood prompted some fresh selling around the safe-haven US dollar and was seen as one of the key factors that benefitted the perceived riskier Australian dollar. Against the backdrop of the optimism over the COVID-19 vaccine rollouts, the already stronger global risk sentiment got an additional boost from the increasing likelihood of more US fiscal stimulus. The market bets increased further after reports indicated that US Treasury Secretary nominee Janet Yellen will urge lawmakers to act big to a protracted downturn. Meanwhile, expectations of a larger government borrowing, along with the risk-on flow triggered a fresh leg up in the US Treasury bond yields. This, in turn, extended some support to the USD and kept a lid on any strong gains for the AUD/USD pair. Investors might also prefer to wait on the sidelines ahead of President-elect Joe Biden's inaugural ceremony on Wednesday. This makes it prudent to wait for some strong follow-through buying before positioning for any further gains amid absent relevant market moving economic releases. That said, Yellen's comments might influence the USD price dynamics. This, along with the broader market risk, might further contribute to produce some meaningful trading opportunities around the AUD/USD pair. Technical levels to watch  

Economists at Standard Chartered have risen the 2021 and 2020 GDP growth forecasts for New Zealand to 4.9% and -2.7% from 4.2% and -4.8%, respectively

Economists at Standard Chartered have risen the 2021 and 2020 GDP growth forecasts for New Zealand to 4.9% and -2.7% from 4.2% and -4.8%, respectively as the GDP growth has already rebounded to pre-COVID levels. They also expect the RBNZ to keep policy rates on hold through 2021 given the better outlook for 2021. See: NZD/USD to drop towards 0.7006 before resuming the uptrend – Credit Suisse Key quotes “We raise our 2021 and 2020 GDP growth forecasts to 4.9% and -2.7% from 4.2% and -4.8%, respectively, to account for better-than-expected growth in 2020.” “Several factors should continue to support the growth recovery in 2021, including the global economic reopening, relatively successful containment of COVID-19 domestically, rising asset prices, expansionary fiscal policy and accommodative monetary policy.”  “Besides the obvious risks from new waves of COVID-19 and vaccine disappointment, we see several additional headwinds to growth: unemployment may rise, the potential minimum wage hike may affect hiring decisions, and investment may remain tepid amid uncertainty; however, the latest rise in business confidence offers some optimism.”  “We expect the Reserve Bank of New Zealand (RBNZ) to maintain its accommodative monetary policy stance, but further rate cuts are unlikely given the better-than-expected growth recovery so far and significant easing in 2020. However, should economic conditions deteriorate or deployed unconventional tools prove less effective than expected, we see a risk of the RBNZ lowering the OCR by 15bps in May.”  

Gold maintained its bid tone through the mid-European session, albeit seemed struggling to capitalize on the intraday positive move. The commodity was

Renewed USD selling bias assisted gold to gain traction for the second consecutive day.The upbeat market mood, rallying US bond yields capped any further gains for the metal.Investors now eye Yellen’s confirmation hearing for some short-term trading opportunities.Gold maintained its bid tone through the mid-European session, albeit seemed struggling to capitalize on the intraday positive move. The commodity was last seen trading around the $1840 region, well within the striking distance of session lows. The precious metal built on the previous day's goodish recovery move from the vicinity of the $1800 mark and gained traction for the second consecutive session on Tuesday. The uptick was exclusively sponsored by the emergence of some selling around the US dollar, which tends to underpin demand for the dollar-denominated commodity. The USD's pullback from near one-month tops could be solely attributed to some profit-taking ahead US Treasury Secretary nominee Janet Yellen's confirmation hearing later this Tuesday. Reports indicated that Yellen will urge lawmakers to act big to a protracted downturn and also outline the need for the proposed $1.9 trillion COVID-19 relief package. Meanwhile, the market has been pricing in the prospects for more aggressive US fiscal spending in 2021 under Joe Biden's presidency. Expectations of a larger government borrowing were evident from the recent strong rally in the US Treasury bond yields. This, in turn, was seen as a key factor keeping a lid on strong gains for the non-yielding yellow metal. Apart from hopes for additional US stimulus measures, the optimism over the rollout of vaccines for the highly contagious coronavirus disease continued boosting investors' confidence. This was evident from the underlying bullish sentiment in the equity markets, which further weighed on the safe-haven XAU/USD and capped the upside, at least for now. In the absence of any major market-moving economic releases from the US, the precious metal remains at the mercy of the USD price dynamics and the broader market risk sentiment. This, along with the US bond yields and developments surrounding the coronavirus saga, might assist traders to grab some short-term opportunities on Tuesday. Technical levels to watch  

EUR/USD reclaims the 1.2100 mark and above on Tuesday, coming back from the area of 2021 lows in the mid-1.2000s. If the recovery picks up extra steam

EUR/USD rebounds from yearly lows in the 1.2050/55 band.The recovery targets the Fibo level around 1.2170.EUR/USD reclaims the 1.2100 mark and above on Tuesday, coming back from the area of 2021 lows in the mid-1.2000s. If the recovery picks up extra steam, then the next interim hurdle emerges at the Fibo retracement (of the November-January rally) at 1.2173. Further up, there are no relevant levels until the YTD peaks in the 1.2350 zone. On the broader picture, the constructive stance in EUR/USD remains unchanged while above the critical 200-day SMA, today at 1.1608. Looking at the monthly chart, the (solid) breakout of the 2008-2020 line is a big bullish event and should underpin the continuation of the current trend in the longer run. EUR/USD daily chart  

DXY met sellers in the 91.00 neighbourhood on Monday and now retreats to the 90.50 region on turnaround Tuesday. Despite the ongoing rebound, the pros

DXY corrects lower after flirting with the 91.00 level on Monday.Interim hurdle lines up at the 55-day SMA at 91.09.DXY met sellers in the 91.00 neighbourhood on Monday and now retreats to the 90.50 region on turnaround Tuesday. Despite the ongoing rebound, the prospect for the greenback remains fragile. That said, a re-visit of the 90.00 yardstick should not surprise anyone in the short-term horizon. Below this psychological level is located the 2021 lows around 89.20 ahead of the March 2018 low at 88.94. A surpass of the 91.00 region should mitigate the downside pressure somewhat. The 55-day SMA, today ay 91.09, reinforces this interim hurdle. The ongoing rebound is seen as corrective only and in the longer run, as long as DXY trades below the 200-day SMA, today at 94.42, the negative view is forecast to persist. DXY daily chart  

Former Federal Reserve Chair Janet Yellen is set to testify in Congress as part of her confirmation hearings for Treasury Secretary. According to FXSt

Former Federal Reserve Chair Janet Yellen is set to testify in Congress as part of her confirmation hearings for Treasury Secretary. According to FXStreet’s Analyst Yohay Elam, Yellen's Congress comeback could prove explosive, especially on debt, stimulus and the dollar.   Ahead of Yellen's testimony, stocks are moving higher while the better market mood is weighing on the dollar, reversing its gains. See – US: Yellen to avoid comments on the US dollar – Rabobank Key quotes “She may talk about tax hikes. In that case, stocks would fall and the safe-haven dollar would rise. On the other hand, she may stress that borrowing costs are low and will likely stay as such. By signaling that Uncle Sam will still be able to borrow at low rates, investors may get the impression that the Fed would buy more bonds. Any sign that the Fed could increase its bond buys would bolster stocks and send the dollar tumbling down.” “Stimulus 1.0 will likely pass before March so the next moves are around the corner. Yellen will likely remain vague about the second move, but any hint about its potential size, timing and scope could move markets. The more she discloses and the higher the sums, the better for risk – stocks may rise and the dollar would fall. Offering less would have the opposite effect.” “The US has been officially aiming to have a ‘strong dollar.’ Yellen may stray away from that, opting instead for a policy that officially encourages markets to determine the greenback's value. A formal shift away from the ‘strong dollar’ may weaken it.”  

The resumption of the upside bias allows for extra gains in EUR/JPY the near-term with the next target at the YTD peaks in the 127.50 region. On the o

EUR/JPY manages to bounce off recent lows near 125.00.Next on the upside appears the 2021 high in the mid-127.00s.The resumption of the upside bias allows for extra gains in EUR/JPY the near-term with the next target at the YTD peaks in the 127.50 region. On the opposite side, if sellers regain control of the market, then a move below the 125.00 area should not be ruled out. A breakdown of this region should expose the 100-day SMA at 124.75 ahead of the Fibo retracement (of the October-January rally) at 124.55. Looking at the broader picture, while above the 200-day SMA at 122.76 the outlook for the cross should remain constructive. EUR/JPY daily chart  

The S&P 500 Index has scope to see further near-term consolidation but with the broader trend still leans higher for an eventual move to 3900, the Cre

The S&P 500 Index has scope to see further near-term consolidation but with the broader trend still leans higher for an eventual move to 3900, the Credit Suisse analyst team reports.  Key quotes “S&P 500 has removed near-term price and 13-day average support at 3777/65 and although a bullish ‘outside week’ remains in place this raises the prospect of further near-term consolidation/corrective weakness prior to the broader uptrend resuming.”  “Resistance is seen at 3785/89 initially, with a break above 3796 needed to ease the immediate downside bias for a retest of the 3827/23 highs. Above here remains needed to reassert the core uptrend with resistance seen next at 3866/68 and eventually the ‘measured triangle objective’ at 3900, from which we will then look for a lengthier consolidation/correction to emerge.”  “Support moves to 3750 initially, then the lower end of the recent price gap at 3742/38. Beneath here can further increase the immediate downside risk for a fall to 3705/3695, but with fresh buyers expected here.”  “Support from the ‘outside week’ low at 3663 needs to hold to maintain a tactical bullish bias. A break would instead see a top complete to warn of a more concerted phase of (still) corrective weakness.”  

The EUR/USD pair extended its steady intraday upward movement and refreshed daily tops, around the 1.2135-40 region during the mid-European session. T

A combination of supporting factors assisted EUR/USD to gain strong traction on Tuesday.The upbeat market mood prompted some USD profit-taking ahead of Yellen’s testimony.Upbeat ZEW economic survey results provided an additional boost to the shared currency.The EUR/USD pair extended its steady intraday upward movement and refreshed daily tops, around the 1.2135-40 region during the mid-European session. The pair built on the previous session's bounce from seven-week lows, around mid-1.2000s and gained some strong positive traction through the first half of the trading action on Tuesday. The momentum was sponsored by the emergence of some fresh US dollar selling and got an additional boost from better-than-expected German ZEW Economic Sentiment Index. The prevalent upbeat market mood – as depicted by a positive trading sentiment around the equity markets – was seen as one of the key factors undermining the safe-haven greenback. The global risk sentiment remained well supported by the optimism over the rollout of COVID-19 vaccines and hopes for more aggressive US fiscal spending under Joe Biden's presidency. The USD pullback could further be attributed to some profit-taking ahead US Treasury Secretary nominee Janet Yellen's confirmation hearing before the Senate Finance Committee later this Tuesday. Reports indicated that Yellen will urge lawmakers to act big to a protracted downturn and also outline the need for the proposed $1.9 trillion COVID-19 relief package. The buying interest around the shared currency picked up pace following the release of upbeat ZEW survey results. In fact, the German ZEW Economic Sentiment Index jumped to 61.8 in January as compared to 60.0 expected and 55.0 previous. Adding to this, the gauge for the broader Eurozone unexpectedly improved to 58.3 during the reported month as against 45.5 anticipated. Meanwhile, the underlying bullish sentiment in the financial markets, along with expectations of a larger government borrowing pushed the US Treasury bond yields higher across the board. This might help limit further losses for the greenback. Bulls might also refrain from placing aggressive bets ahead of the ECB monetary policy decision on Thursday. Hence, it will now be interesting to see if the EUR/USD pair is able to capitalize on the move or meets with some supply at higher levels. In the absence of any major market-moving economic releases from the US, the broader market risk sentiment might continue to influence the USD price dynamics and produce some short-term trading opportunities around the EUR/USD pair. Technical levels to watch  

GBP/USD is holding above 1.36 amid an improved market mood. The UK's ramped-up vaccination campaign is boosting the pair and Treasury Secretary nomine

GBP/USD is holding above 1.36 amid an improved market mood. The UK's ramped-up vaccination campaign is boosting the pair and Treasury Secretary nominee Janet Yellen may give the cable, which is eyeing critical resistance at 1.37, a shot in the arm, FXStreet’s Analyst Yohay Elam reports.  See – US: Yellen to avoid comments on the US dollar – Rabobank Key quotes “If Yellen suggests closing loopholes or other measures, stocks could fall and the dollar would rise. However, the former Chair of the Federal Reserve may opt for more debt – which would receive funding from Jerome Powell, her successor at the Fed. She will probably stray away from suggestion monetary financing but markets may have their interpretations.” “Coronavirus continues raging on both sides of the Atlantic, with some tentative signs of peaking. More importantly, the UK has been extending its vaccination campaign and is inoculated nearly 7% of its population. The rate is roughly half of that in America. Britain's lead in vaccination gives it an edge.”  “Pound/dollar is making tentative signs of breaking above 1.3615, which provided support last week and serves as a separator of ranges. On its way up, cable broke above the 50 and 100 Simple Moving Averages, a bullish sign.”  “Above 1.3615, the next level to watch is 1.3670, a peak in early 2021, followed by the yearly high of 1.3705. Support awaits at 1.3520, the weekly low, and then by 1.3450 and 1.3430, stepping stones on the way up.”  

USD/JPY is trading around 104.00, also around the 23.6% retracement of its January advance, as a better market mood helped the pair to recover some gr

USD/JPY is trading around 104.00, also around the 23.6% retracement of its January advance, as a better market mood helped the pair to recover some ground. USD/JPY is technically neutral and needs to advance past 104.40 to gain further traction, FXStreet’s Chief Analyst Valeria Bednarik briefs.  Key quotes “The market’s mood is in better shape this Tuesday, weighing on safe-haven dollar and yen. The sentiment was boosted by comments from former Fed’s chair Janet Yellen, who has been nominated by Joe Biden as Treasury Secretary. Yellen is meant to speak in front of the Senate Finance Committee. Her prepared remarks are already out, showing that she believes that is time to ‘act big,’ spend now and worry about deficits later.” “In the 4-hour chart, the USD/JPY pair has advanced above all of its moving averages, which anyway remain directionless. Technical indicators recovered to above their midlines but quickly lost directional strength, indicating limited buying interest.”  “A long-term descendant trend line offers resistance in the 104.30 area, while the monthly high has been set at 104.39.”  

The USD/CHF pair continued losing ground through the mid-European session and dropped to three-day lows, around the 0.8870-65 region in the last hour.

USD/CHF witnessed some selling on Tuesday and retreated further from multi-week highs.A modest USD pullback from nearly one-month tops was seen exerting pressure on the pair.The upbeat market mood, rallying US bond yields might help limit further losses for the major.The USD/CHF pair continued losing ground through the mid-European session and dropped to three-day lows, around the 0.8870-65 region in the last hour. The pair failed to capitalize on its early uptick, instead met with some fresh supply near the 0.8915 area and extended the previous day's retracement slide from six-week tops. The downfall was exclusively sponsored by some renewed US dollar selling and seemed unaffected by the upbeat market mood, which tends to undermine demand for the safe-haven Swiss franc. The global risk sentiment remained well supported by the optimism over the COVID-19 vaccine rollout and hopes for additional US fiscal stimulus measures. Investors have been pricing in the prospects for more aggressive fiscal spending in 2021 under Joe Biden's presidency, which, to some extent, helped offset worries about the ever-increasing coronavirus cases. Meanwhile, expectations for a larger government borrowing pushed the US Treasury bond yields higher across the board. This, in turn, could extend some support to the greenback and limit any further losses for the USD/CHF pair. Investors might also refrain from placing aggressive bets ahead of the President-elect Joe Biden's inaugural ceremony on Wednesday. In the meantime, US Treasury Secretary nominee Janet Yellen’s confirmation hearing might influence the USD price dynamics amid absent relevant market moving economic releases. This, along with the broader market risk sentiment and developments surrounding the coronavirus saga, might further produce some short-term trading opportunities around the USD/CHF pair. Technical levels to watch  

Russia has found that its second COVID-19 vaccine developed by the Vector Institute, is 100% effective. The Tass news agency reports that the perfect

Russia has found that its second COVID-19 vaccine developed by the Vector Institute, is 100% effective. The Tass news agency reports that the perfect score is based on the results of clinical trials.  The nation's first vaccine, called Sputnik V, is already in use in several countries such as Argentina. Scientists in the West await additional data to assess the efficacy of the Russian vaccines. US and European regulators approved the Pfizer/BioNTech jabs while the UK has also given the green light to the AstraZeneca inoculation.  More  Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currencies

EUR/USD is holding the 38.2% retracement of its November/January rally and 55-day average at 1.2065/54, and analysts at Credit Suisse look for this to

EUR/USD is holding the 38.2% retracement of its November/January rally and 55-day average at 1.2065/54, and analysts at Credit Suisse look for this to hold for now. Meanwhile, resistance moves lower to 1.2134, then 1.2167. Key quotes “EUR/USD has sold-off sharply after confirming a small ‘head & shoulders’ top below price support at 1.2132/22 with weakness having already extended to our first downside objective at 1.2065/54 – the December low, 38.2% retracement of the November/January rally and rising 55-day average. We continue to look for an attempt to find a floor here for now and for a recovery to emerge with resistance seen at 1.2134 initially, then the 13-day average and price resistance at 1.2167/80, which we look to then cap.”  “Above 1.2167/80, EUR/USD can see a deeper recovery to the ‘neckline’ to the top at 1.2223/31, but with this needing to be cleared to negate the top to suggest the corrective setback is coming to an end for a move back to the 1.2350/55 highs.”  “Below 1.2054 on a closing basis, the pair can see support next at the September high at 1.2011 ahead of the 23.6% retracement of the entire 2020/2021 uptrend at 1.1945, with the ‘measured top objective’ at 1. 1924/14. We would then look for an attempt to establish a fresh and ideally important floor here.”  

Spain 9-Month Letras Auction climbed from previous -0.668% to -0.519%

Spain 3-Month Letras Auction climbed from previous -0.85% to -0.58%

The AUD/USD pair is set to complete an irregular top below 0.7666/43, with next support then seen at 0.7502, which is expected to provide a solid floo

The AUD/USD pair is set to complete an irregular top below 0.7666/43, with next support then seen at 0.7502, which is expected to provide a solid floor, according to economists at Credit Suisse. Key quotes “AUD/USD is starting to succumb to its dramatic loss of momentum and with a momentum top now confirmed, we shift from our cautious stance towards a preference for a deeper correction lower.” “A top would be confirmed below 0.7666/43, which would suggest a deeper fall back to 0.7603/7599, then the 0.7557 low. The size of the small top suggests a move towards the 55-day average and key price low at 0.7502 /7462 is possible, however we would expect the market to find a solid floor here in line with the broader uptrend.”  “A break above 0.7799/7805 on the back of a hold above 0.7666/43 would still be sufficient to remove the topping risks and instead suggest a much more direct resumption of the core bull uptrend, with the next resistance then seen at the recent and April 2018 high at 0.7816/20.”  

USD/CHF is pushing hard into the key 0.8918/26 highs, above which would trigger a small base to confirm further corrective strength, the Credit Suisse

USD/CHF is pushing hard into the key 0.8918/26 highs, above which would trigger a small base to confirm further corrective strength, the Credit Suisse analyst team informs. Key quotes “USD/CHF has been pushing hard into the key 0.8918/26 highs over the past couple of days, further increasing the risk of a base and the corrective recovery phase that we have been calling for.  “A clear break above the December highs at 0.8918/26 would see a small intraday ‘head and shoulders’ base completed to open up further upside, with the next level at the 55-day average at 0.8947/64, then 0.9027/28, which is a cluster of medium term retracement levels. Its worth highlighting that the ‘measured base objective’ is at 0.9083, where we would look for a solid cap.”  “Longer-term, we look for the core bear trend to take over again post a deeper setback, in line with the very large top from 2020 that remains in place. Therefore, we see support initially at 0.8856/40, an immediate break below which would lessen the basing risk and open up 0.8723/21, then the recent low at 0.8758.”  

European Monetary Union ZEW Survey – Economic Sentiment registered at 58.3 above expectations (45.5) in January

German ZEW Economic Sentiment arrived at 61.8 in Jan vs. 60.0 expected.ZEW Current Situation arrived at -66.4 in Jan vs. -68.5 expectedEUR/USD flirts with highs near 1.2125 on upbeat ZEW numbers.more to come ...

European Monetary Union Construction Output w.d.a (YoY) increased to -1.3% in November from previous -1.4%

European Monetary Union Construction Output s.a (MoM): 1.4% (November) vs 0.5%

Germany ZEW Survey – Current Situation came in at -66.4, above expectations (-68.5) in January

Germany ZEW Survey – Economic Sentiment above forecasts (60) in January: Actual (61.8)

Gold edged higher during the early European session and climbed to two-day tops, around the $1845 region in the last hour. The precious metal gained p

Gold gained positive traction for the second consecutive session on Tuesday.A modest USD pullback was seen as a key factor that benefitted the metal.The risk-on mood, rallying US bond yields might cap gains for the commodity.Gold edged higher during the early European session and climbed to two-day tops, around the $1845 region in the last hour. The precious metal gained positive traction for the second consecutive session on Tuesday and built on the overnight goodish rebound from the vicinity of the $1800 mark, or seven-week lows. The uptick was exclusively sponsored by a modest US dollar pullback from nearly one-month tops, which tends to benefit the dollar-denominated commodity. That said, the prevalent upbeat market mood held bullish traders from placing any aggressive bets and might keep a lid on any strong rally for the safe-haven XAU/USD. The global risk sentiment remained well supported by the optimism over the rollout of COVID-19 vaccines and hopes for more aggressive fiscal spending under Joe Biden's presidency. Meanwhile, expectations for a larger government borrowing triggered a fresh leg up in the US Treasury bond yields. This might turn out to be another factor that could cap the upside for the non-yielding yellow metal. Investors might also prefer to wait on the sidelines ahead of the President-elect Joe Biden's inaugural ceremony on Wednesday. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move. In the absence of any major market-moving economic releases, traders will look forward to US Treasury Secretary nominee Janet Yellen’s confirmation hearing for some impetus. This, along with the broader market risk sentiment, might further contribute to produce some short-term trading opportunities around the XAU/USD. Technical levels to watch  

GBP/USD remains poised for additional gains amid favorable technicals. 200-HMA and bullish crossover keep the buyers hopeful. 100-HMA at 1.3625 is on

GBP/USD remains poised for additional gains amid favorable technicals.200-HMA and bullish crossover keep the buyers hopeful.100-HMA at 1.3625 is on sight amid bullish RSI. GBP/USD is setting the stage to extend Monday’s recovery, with the near-term technical setup favoring the bulls. On the hourly chart, the cable has entered a phase of consolidation around 1.3600. The bulls have managed to defend the 200-hourly moving average (HMA) support at 1.3598, keeping the prospects of further upside in place. Also, a bullish crossover is confirmed on the said time frame, with the 21-HMA having pierced the 50-HMA from above. The bull cross also adds credence to a likely move higher. The Relative Strength Index (RSI) points north while above the midline, allowing room for more gains. Therefore, the 100-HMA barrier at 1.3625 comes as the first line of resistance, above which the 1.3650 psychological level could be challenged. On the flip side, acceptance below the 200-HMA could call for a test of the critical support at 1.3589, where the 21 and 50-HMAs intersect. Further south, Friday’s low of 1.3572 could be challenged while Monday’s low of 1.3519 remains the last line of defense for the bulls. GBP/USD: Hourly chart GBP/USD: Additional levels  

Economists at Standard Chartered expect the US dollar to continue moving downward in the year ahead. Nonetheless, the EUR/USD pair is set to see dips

Economists at Standard Chartered expect the US dollar to continue moving downward in the year ahead. Nonetheless, the EUR/USD pair is set to see dips but should hold above the 1.2000 level. See: US dollar to experience further weakness in the year ahead – MUFG Key quotes “We expect USD to move lower through 2021, but also expect short-term rebounds along the way.” “We see EUR/USD long positions being, by far, the most elevated and significant for broad USD. In that context, additional drivers of a near-term decline are likely to be a recent rise in US Treasury yields, a steeper US yield curve and a widening yield differential. The large fiscal stimulus planned by the incoming Biden administration could potentially boost short-term US sentiment and economic outperformance.” “There may also be trouble brewing in Italian politics that could lead to a snap election. With elections also due in the Netherlands (in March) and Germany (by October), the recent closer regional collaboration could soon be tested by populist politics.” “We expect robust supports around 1.2060 and 1.2000. A mild USD rally could end there. A break lower would suggest a deeper decline into 1.1600-1.1900 window.”

The NZD/USD pair gained some positive traction on Tuesday and recovered the previous session's losses to three-week lows, albeit lacked any strong fol

NZD/USD gained some positive traction on Tuesday and moved away from three-week lows.The overnight break below the head and shoulders neckline support favours bearish traders.The pair could slide to test the 0.7040 support before eventually dropping to the 0.7000 mark.The NZD/USD pair gained some positive traction on Tuesday and recovered the previous session's losses to three-week lows, albeit lacked any strong follow-through. Given the overnight break below the 0.7145-40 horizontal support, marking the neckline of a head and shoulder chart pattern, the near-term bias remains tilted in favour of bearish traders. The NZD/USD pair's inability to capitalize on the intraday positive move adds credence to the negative outlook. Moreover, technical indicators on the daily chart have just started drifting into the negative territory. This, in turn, supports prospects for an extension of the recent corrective pullback from multi-year tops, or levels beyond the 0.7300 round-figure mark touched earlier this January. Hence, some follow-through weakness towards the 0.7040 intermediate support, en-route the 0.7000 psychological mark, looks a distinct possibility. The latter represents the bearish pattern target, which should act as a key pivotal point and help determine the NZD/USD pair's near-term trajectory. On the flip side, recovery attempts beyond the neckline support-turned-resistance might confront resistance near the 0.7170-75 region ahead of the 0.7200 mark. Any subsequent move might be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 0.7235 supply zone. NZD/USD 4-hourly chart Technical levels to watch    

The European Commission has warned some preliminary national plans to spend the covid recovery money lack detail and need to be improved, Reuters repo

The European Commission has warned some preliminary national plans to spend the covid recovery money lack detail and need to be improved, Reuters reports, citing sources with knowledge of the matter. Additional takeaways “Commission has said those countries yet to submit their plans must speed up before the end-April deadline.” “EU commission has said the net paying countries would reject plans if not accompanied by reforms.”   more to come ..

In its latest monthly oil market report, the International Energy Agency (IEA) lowered the forecast for global oil demand by 600,000 barrels per day (

In its latest monthly oil market report, the International Energy Agency (IEA) lowered the forecast for global oil demand by 600,000 barrels per day (bpd) for Q1 2021 and by 300,000 bpd for 2021 as a whole. Additional takeaways   more to come ...

European Monetary Union Current Account s.a fell from previous €26.6B to €24.6B in November

Italy Global Trade Balance fell from previous €7.565B to €6.766B in November

Italy Trade Balance EU fell from previous €0.402B to €0.088B in November

European Monetary Union Current Account n.s.a fell from previous €34.1B to €26.8B in November

European Monetary Union Current Account n.s.a fell from previous €34.1B to €26.808B in November

The EUR/GBP cross caught some fresh bids during the early European session and jumped back above the 0.8900 round-figure mark in the last hour. Follow

EUR/GBP regained positive traction on Tuesday amid a pickup in demand for the euro.Fresh travel restrictions in the UK weighed on the sterling and remained supportive.Delay in COVID-19 vaccine rollout in Europe and Italian political crisis might cap gains.The EUR/GBP cross caught some fresh bids during the early European session and jumped back above the 0.8900 round-figure mark in the last hour. Following the previous day's pullback of around 40 pips, the cross regained positive traction for the third consecutive session on Tuesday and was supported by a pickup in demand for the shared currency. Bulls seemed rather unaffected by reports that German chancellor Angela Merkel wants to extend lockdown measures until February 15. Even the COVID-19 vaccine rollout delay in Europe and Italian political crisis did little to weigh on the euro. It is worth reporting that Pfizer-BioNTech said on Friday that deliveries of its leading coronavirus vaccine to Europe will be delayed. Meanwhile, the Italian government faces a Senate vote on Tuesday that will decide PM Conte’s fate. On the other hand, the British pound was undermined by weekend news related to the imposition of more travel restrictions in the UK. That said, a modest US dollar pullback from nearly one-month tops might help limit any deeper losses for the sterling. This, in turn, might turn out to be a key factor capping any strong gains for the EUR/GBP cross. Moreover, investors might also refrain from placing aggressive bets, rather prefer to wait on the sidelines ahead of the latest ECB monetary policy update on Thursday. Hence, it remains to be seen if the EUR/GBP cross is able to capitalize on the positive move or meets with some fresh supply at higher levels, warranting some caution for bullish traders. Meanwhile, the final version of the German consumer inflation figures, which matched original estimates, failed to provide any meaningful impetus to the EUR/GBP cross. Tuesday's economic docket also highlights the release of ZEW economic sentiment for Germany and the Eurozone, which might assist traders to grab some short-term opportunities. Technical levels to watch  

Ahead of her meeting with the State premiers, Germany’s Chancellor Angela Merkel said that she wants the lockdown to be extended until February 15, as

Ahead of her meeting with the State premiers, Germany’s Chancellor Angela Merkel said that she wants the lockdown to be extended until February 15, as cited by Bild newspaper. more to come ...

The US dollar has softened overnight ahead of today’s appearance for Treasury Secretary nominee Janet Yellen in front of the Senate Finance Committee.

The US dollar has softened overnight ahead of today’s appearance for Treasury Secretary nominee Janet Yellen in front of the Senate Finance Committee. Yellen’s hearing is set to provide more insights on USD policy under Biden administration but is unlikely to prove market-moving for the US dollar, per MUFG Bank. See – US: Yellen to avoid comments on the US dollar – Rabobank Key quotes “It has been reported in advance of the hearing that Janet Yellen will argue that ‘the smartest thing we can do is act big’ as she seeks support for the Biden administration’s proposed $1.9 trillion COVID-19 relief package. The Biden administration is also reportedly preparing a second, multibillion-dollar recovery plan that would increase spending on infrastructure, green energy, healthcare and education.” “The increasing likelihood of bigger fiscal stimulus including infrastructure investment is supportive for commodity prices and related currencies. We continue to see scope for further gains in commodity-related currencies in the year ahead which should benefit as well from the strengthening global recovery once vaccines are rolled out more widely.” “The Wall Street Journal has reported that Janet Yellen is prepared to say ‘The value of the US dollar and other currencies should be determined by markets. The US does not seek a weaker currency to gain competitive advantage. We would oppose attempts by other countries to do so’. The comments appear in line with the standard international agreements on currency policy amongst major economies and are unlikely to prove market-moving for the US dollar.”  “The Biden administration is expected to support a strong US dollar policy. However, we do not believe that fundamentals are as supportive for a strong US dollar, and continue to expect further weakness in the year ahead.”  

Hong Kong SAR Unemployment rate up to 6.6% in December from previous 6.3%

EUR/USD has clawed its way up from the one-month lows amid a better market mood. According to FXStreet’s Analyst Yohay Elam, the testimony from Janet

EUR/USD has clawed its way up from the one-month lows amid a better market mood. According to FXStreet’s Analyst Yohay Elam, the testimony from Janet Yellen, in her confirmation hearings for Treasury Secretary, can turn the dead cat bounce into a roaring rally. See – US: Yellen to avoid comments on the US dollar – Rabobank Key quotes “Biden already said that ‘everybody should pay their fair share’ and signaled closing loopholes and hiking taxes on the very rich. While such moves would not hurt the majority of Americans, Wall Street would shudder and stocks could reverse their gains. In such a rick-off scenario, the safe-haven US dollar would gain and the recent bounce in EUR/USD would prove a dead cat bounce – only a minimal upward move followed by a fresh free-fall.” “Spending is necessary due to the current situation and is made easier by cheap borrowing costs. If the former Fed Chair points to low yields when asked about funding the stimulus, markets may interpret it as a sign that no new taxes are coming  – positive for risk.” “Moreover, some may interpret any leaning on cheap funding as a hint that Yellen is already working with Powell – that perhaps she knows of an upcoming expansion in the bank's bond-buying scheme.” “Coronavirus continues raging on both sides of the Atlantic. German Chancellor Angela Merkel is contemplating not only extending the lockdown but also tightening it. Italy's Prime Minister Giuseppe Conte is facing a crucial vote of no-confidence in the Senate after surviving one in the lower chamber.”  “Bears have the upper hand. For bulls to recover, EUR/USD needs to recapture 1.2125, a former triple-bottom. It is followed by 1.2175, which was a swing high last week. Support is at the one-month low around 1.2050, followed by the round 1.20 level and then by 1.1960.”

The USD/CAD pair maintained its offered tone through the early European session and was last seen trading near daily swing lows, around the 1.2830-25

A combination of factors exerted some follow-through pressure around USD/CAD on Tuesday,The risk-on mood weighed on the safe-haven USD; bullish oil prices underpinned the loonie.Rallying US bond yields could revive the USD demand and help limit heavy losses for the pair.The USD/CAD pair maintained its offered tone through the early European session and was last seen trading near daily swing lows, around the 1.2830-25 region. The pair extended the previous day's rejection slide from the 1.2800 round-figure mark, or one-week tops and witnessed some follow-through selling on Tuesday. The downtick was sponsored by a modest US dollar pullback from near one-month highs and bullish crude oil prices, which tend to underpin the commodity-linked loonie. The global risk sentiment remained well supported by the optimism over the rollout of COVID-19 vaccines and hopes for more aggressive fiscal spending in 2021 under Joe Biden's presidency. This, in turn, was seen as a key factor that weighed on the safe-haven US dollar demand and exerted some pressure on the USD/CAD pair. Meanwhile, the likelihood of additional US fiscal stimulus, to a larger extent, helped offset concerns that renewed coronavirus-induced lockdowns could hurt fuel consumption. Oil prices further benefitted from Saudi Arabia's announcement to cut supply in the next two months, though the ever-increasing coronavirus cases might cap gains. Apart from this, expectations of a larger government borrowing pushed the US Treasury bond yields higher across the board and might extend some support to the greenback. Investors might also refrain from placing aggressive bets ahead of the Bank of Canada policy decision on Wednesday, which could further help limit any meaningful downside for the USD/CAD pair. In the absence of any major market-moving economic releases, either from the US or Canada, traders are likely to take cues from the US Treasury Secretary nominee Janet Yellen’s confirmation hearing. This, along with the broader market risk sentiment, will influence the USD price dynamics and produce some trading opportunities around the USD/CAD pair. Technical levels to watch  

2021 looks to be the start of a major commodity price upswing – a move that is expected to last possibly through 2021 and 2022. Factors that support t

2021 looks to be the start of a major commodity price upswing – a move that is expected to last possibly through 2021 and 2022. Factors that support the rise in prices include ample liquidity, prior under-investment, China’s continued buying, attractive valuations relative to other assers, rising inflation expectations and the global green wave of stimulus, Howie Lee, Economist at OCBC Bank, briefs. Key quotes “Authorities have been quick to act with an unprecedented fiscal and monetary stimulus in the wake of the 2020 pandemic, but are likely to sit on their hands even as economic recovery is underway. We are expecting a sharp, explosive rebound in demand in 2021 and 2022.” “The rebuilding of supply chains requires time and current diminished stockpiles will be unable to meet the demands of the pent-up demand that we are expecting to come. It will also be naïve to assume that supply will recover seamlessly this year.” “Even with the vaccine roll-outs, the headwinds on commodities are expected to be minimal, if not a boost. 10-year Treasury breakeven yields are already trading above 2% as a testament to rising inflation expectations.” “There is little to suggest China will put a stop on its stimulus in the coming year. Its voracious appetite for building materials is set to continue, as seen in the trade balance numbers in December. Aside, a recovering hog count in China is propelling an acceleration of soybean inventory rebuilding after two years of destocking due to the US-China trade war. The restocking is also in-line with its five-year plan for building up strategic commodity reserves, particularly food supplies.” “With equity valuations already at unprecedented levels and record-low bond yields showing limited downside, the cyclical rotation of funds may flow into commodities next. Commodities remain a viable hedge and is an asset still yet to fully capture the upside movements that equities and bonds already have in 2020.” “With a democrat back at the helm in the White House, a global ‘green wave’ is set to, somewhat ironically, increase demand for raw commodities in the short-term. While ultimately negative for oil and other base metals in the long run, for now many of these green policies require a large initial outlay of capital to build new infrastructure for the implementation of these projects.”  

On Tuesday, Former Federal Reserve Chair Janet Yellen testifies in Congress as part of her confirmation hearings for Treasury Secretary. The market is

On Tuesday, Former Federal Reserve Chair Janet Yellen testifies in Congress as part of her confirmation hearings for Treasury Secretary. The market is of the view that Yellen will revert to traditional language on policy which is likely to mean more measured comments on policy and very little direct reference to the USD at all, according to Jane Foley, Senior FX Strategist at Rabobank. Ahead of Yellen's testimony, the US dollar is paring its gains as US traders return from a long weekend, pushing stock futures higher.  Key quotes “In order to clarify the view of the Biden Administration as distinct from that of the outgoing government, she will also reportedly state that ‘the US doesn’t see a weaker currency to gain competitive advantage’. This, however, doesn’t mean that the USD cannot push lower.” “Given the low inflationary environment, it is possible that sustained USD weakness could be a factor in the decisions of other central banks to embark on additional easing measures. It is also reasonably to question whether the control of longer-term interest rates by a central bank can be viewed as having a currency manipulation theme. This is increasing more relevant given that more central banks are using their balance sheets as a monetary policy tool. Given this sensitive backdrop, we would expect Yellen to say as little as possible about the USD in the foreseeable future.”  

EUR/USD has held initial test of the 55-day moving average at 1.2058 and the pair has recaptured the 1.2100 level. At press time, EUR/USD is edging hi

EUR/USD has held initial test of the 55-day moving average at 1.2058 and the pair has recaptured the 1.2100 level. At press time, EUR/USD is edging higher, up 0.25% on the day, but intraday rebounds are indicated to struggle around 1.2140, per Commerzbank. Key quotes “EUR/USD has sold off to, tested and so far held the 55-day ma at 1.2058, intraday rebounds are indicated to struggle around 1.2140.” “Beyond the the 55-day ma at 1.2058 we would allow for losses to extend to 1.2014 the September high and even the 1.1969 2020-2021 uptrend, which we suspect will hold the initial test.”  “Assuming that the uptrend (1.1969) and 23.6% retracement of the move up since March 2020 (1.1945) holds; medium-term the market continues to track higher whilst targeting the 1.2556 2018 high and 1.2624, the 200-month moving average, which remains our longer-term target.”  “Loss of 1.1945 will imply a deeper sell off to the 1.1615/02 support, this is the 38.2% retracement and the September and November lows.”  

AUD/USD is slowing down from its first tease of 0.7813, April 2018’s peak. Market awaits the policy meeting of the Reserve Bank of Australia (RBA) on

AUD/USD is slowing down from its first tease of 0.7813, April 2018’s peak. Market awaits the policy meeting of the Reserve Bank of Australia (RBA) on February 2 for clarity, as macro assumptions outlined at last November’s Statement of Monetary Policy look jaded and needs refreshing. Reflationary trades are taking a breather, but they remain fancied on dips, per DBS Bank. Key quotes “At its last policy meeting last year, the RBA argued that it is not expecting to raise the cash target rate (currently at 0.1%) over the next three years. The market is increasingly questioning the RBA’s stance, given the backdrop of a better-than-expected economic recovery as the market moves into the vaccine optimism phase. This is likely a reason to expect AUD to still find buyers on pullback dips.” “There is momentum loss coupled with a negative moving average convergence divergence signal – a sustained decline would have AUD/USD probe lower if it goes under the 0.7641 support.” “Tactically, we fit a buy on dip at 0.7520, which is just slightly above the 38.2% Fibonacci retracement of 0.6991-0.7820 around 0.7504. Add at 0.7465 with an invalidation point at 0.7405.”  

The USD/JPY pair held on to its strong intraday gains through the early European session and was last seen hovering near the top end of its daily trad

USD/JPY regained positive traction on Tuesday and jumped back above the 104.00 mark.The risk-on mood undermined the safe-haven JPY and was seen driving the pair higher.Rallying US bond yields helped offset a modest USD downtick and remained supportive.The USD/JPY pair held on to its strong intraday gains through the early European session and was last seen hovering near the top end of its daily trading range, just above the 104.00 mark. A combination of supporting factors assisted the pair to catch some fresh bids on Tuesday and finally break out of its two-day-old consolidative trading range. The global risk sentiment remained well supported by the optimism over the rollout of COVID-19 vaccines and hopes for additional US fiscal stimulus measures. The upbeat market mood undermined demand for the safe-haven Japanese yen and was seen as a key factor driving the USD/JPY pair higher. Bullish traders further took cues from a fresh leg up in the US Treasury bond yields, which continued pushing higher amid expectations of larger government borrowing. This, in turn, helped offset a modest US dollar pullback from near one-month tops and assisted the USD/JPY to move past the 103.90-95 horizontal resistance. Hence, the uptick could further be attributed to some technical buying on a sustained move beyond the mentioned barrier. It will now be interesting to see if bulls are able to capitalize on the move or the USD/JPY pair meets with some fresh supply at higher levels. In the absence of any major market-moving economic releases from the US, US Treasury Secretary nominee Janet Yellen’s confirmation hearing might influence the USD price dynamics. This, along with the broader market risk sentiment, could produce some short-term trading opportunities around the USD/JPY pair. Technical levels to watch  

Switzerland Producer and Import Prices (MoM): 0.5% (December) vs -0.1%

Switzerland Producer and Import Prices (YoY) up to -2.3% in December from previous -2.7%

The ZEW will release its German Economic Sentiment Index and the Current Situation Index at 1000 GMT in the EU session later today, reflecting institu

German ZEW Survey Overview The ZEW will release its German Economic Sentiment Index and the Current Situation Index at 1000 GMT in the EU session later today, reflecting institutional investors’ opinions for the next six months. The headline Economic Sentiment Index is expected to rise to 60.0 in January as against a 55.0 reading booked in the previous month. Meanwhile, the Current Situation Sub-Index is likely to arrive at -68.0 versus a -66.5-figure recorded previously.      How could they affect EUR/USD? EUR/USD remains capped by the 1.2100 level amid broad-based US dollar retreat. Prospects of further stimulus globally boost the market sentiment while weighing on the safe-haven US dollar. The EUR traders digest the news that the European car sales plunged by 24% in 2020, the biggest annual drop since records began in 1990. Attention turns towards the German ZEW Survey, although Treasury Secretary nominee Janet Yellen’s testimony will hold the key. Should the German data beat estimates, the spot could finally recapture the 1.2100 level, with a move eyed towards the 10-DMA resistance at 1.2147. The rates could extend the retreat towards 1.2057/54 (classic daily S1/ Monday’s low).  The next downside cap is seen at 1.2040 (Dec 2 low). At the time of writing, EUR/USD trades at 1.2087, up 0.09% on a daily basis. Key notes EUR/USD Analysis: Bears turn cautious ahead of ECB meeting on Thursday Forex Today: Dollar retreats from highs ahead of Yellen's testimony, vaccine/virus news eyed EU Commission to back plans for more economic, financial autonomy – Bloomberg About German ZEW The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).

Here is what you need to know on Tuesday, January 19: The US dollar is paring its gains as US traders return from a long weekend, pushing stock future

Here is what you need to know on Tuesday, January 19: The US dollar is paring its gains as US traders return from a long weekend, pushing stock futures higher. Treasury Secretary nominee Yellen testifies later, setting the case for fiscal stimulus. Coronavirus continues raging with Germany considering more restrictions and Britain pushing vaccines. Stocks are moving higher after a somewhat "blue" Monday amid a bank holiday in the day. The better market mood is weighing on the dollar, reversing its gains. Former Federal Reserve Chair Janet Yellen testifies in Congress as part of her confirmation hearings for Treasury Secretary. In her prepared remarks, Yellen stated that now is the time to spend. Comments about debt and the dollar – in which Yellen is set to call for market-driven exchange rates – are also watched. Gold has been edging higher around $1,840 ahead of Yellen's testimony.  Five factors moving the US dollar in 2021 and not necessarily to the downsidePresident-elect Joe Biden prepares for the inauguration on Wednesday. Apart from passing the $1.9 trillion stimulus package, there is high uncertainty about his first Executive Orders. One such move would be canceling the Keystone XL pipeline leading oil from Canada, resulting in the loonie's slide. Outgoing President Donald Trump is set to offer pardons before leaving office but is unlikely to make market-moving announcements. Fears of violence are shrugged off by markets.EUR/USD is edging higher, despite concerns that Germany will not only extend the lockdown but also tighten. The German ZEW Economic Sentiment is set to reflect optimism about the future but a dire situation at the moment. it. In Italy, Prime Minister Giuseppe Conte survived a confidence vote in the lower chamber, and now faces one in the Senate. Immunization in Europe is advancing at a slow pace.  Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currenciesGBP/USD is holding above 1.36 as Britain has already 6.65% of its population and continues at full speed. A recent drop in cases is encouraging. Cryptocurrencies: Bitcoin has been advancing above the $36,000 level, finding new strength after falling from the highs. Ethereum stands out with a surge above $1,300.   

The AUD/USD pair edged higher through the Asian session and was last seen hovering near the top end of its daily trading range, just above the 0.7700

AUD/USD regained positive traction on Tuesday and snapped two days of the losing streak.The underlying bullish sentiment weighed on the safe-haven USD and remained supportive.Rallying US bond yields might help limit the USD downside and cap the upside for the major.The AUD/USD pair edged higher through the Asian session and was last seen hovering near the top end of its daily trading range, just above the 0.7700 mark. The pair caught some fresh bids on Tuesday and for now, seems to have snapped two consecutive days of the losing streak amid a modest US dollar pullback from near one-month tops. The global risk sentiment remained well supported by hopes for additional US fiscal stimulus measures. This, in turn, was seen as a key factor that undermined the safe-haven USD and benefitted the perceived riskier aussie. The momentum assisted the AUD/USD pair to recover the previous day's modest losses to two-week lows, through the upside is more likely to remain limited. Expectations of a larger government borrowing triggered a fresh leg up in the US Treasury bond yields. This might help limit any meaningful downside for the greenback and keep a lid on any runaway rally for the major, at least for the time being. Moreover, investors are likely to turn cautious, rather prefer to wait on the sidelines ahead of the President-elect Joe Biden's inaugural ceremony on Wednesday. This makes it prudent to wait for some strong follow-through buying interest before confirming that the AUD/USD pair has stalled its recent corrective slide from multi-year tops and positioning for any further near-term appreciating move. There isn't any major market-moving economic data due for release on Tuesday, leaving the AUD/USD pair at the mercy of the broader market risk sentiment. That said, USD Treasury Secretary nominee Janet Yellen’s confirmation hearing – scheduled later today – might play a key role in influencing the USD price dynamics and produce some meaningful trading opportunities around the major. Technical levels to watch  

Germany Consumer Price Index (MoM) in line with forecasts (0.5%) in December

Germany Harmonized Index of Consumer Prices (MoM) in line with expectations (0.6%) in December

Germany Harmonized Index of Consumer Prices (YoY) meets forecasts (-0.7%) in December

Germany Consumer Price Index (YoY) meets forecasts (-0.3%) in December

Gold remains capped below 200-DMA while awaiting Yellen. Bearish prospects are intact as RSI trades below the 50 level. XAU/USD trades below all majo

Gold remains capped below 200-DMA while awaiting Yellen. Bearish prospects are intact as RSI trades below the 50 level.XAU/USD trades below all major averages on the 1D chart. Gold (XAU/USD) is struggling to extend Monday’s impressive bounce from seven-week lows of $1803, as the 200-daily moving average (DMA) appears to be a tough nut to crack for the bulls. Investors await US Treasury Secretary nominee Janet Yellen’s testimony due later in the NA session for fresh direction. In her prepared remarks, Yellen called on Congress to do more to fight a deep pandemic-induced recession. She said: “Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.” Gold Price Chart: Daily Acceptance above the 200-DMA hurdle is critical to extending the recovery moves towards the horizontal 50-DMA at $1860. The next relevant upside barrier is aligned at $1876, which is the 21-DMA. The upside moves appear limited by the key averages while the 14-day Relative Strength Index (RSI) remains in the bearish region. To the downside, the rising trendline support at $1805 could be tested if the sellers regain control. The multi-week lows of $1803 would be next on the bears’ radar, below which a test of the December 1 low at $1775.52 cannot be ruled. Gold Additional levels  

The greenback, when tracked by the US Dollar Index (DXY), appears to have moved into a consolidative range around the 90.70 level following the closin

DXY trades in a consolidative fashion in the 90.70 area.Activity in US markets resumes following the MLK Day holiday.November’s TIC Flows will be the only release in the US docket.The greenback, when tracked by the US Dollar Index (DXY), appears to have moved into a consolidative range around the 90.70 level following the closing bell in Asian markets. US Dollar Index looks to politics, yields The index gives away some gains after hitting fresh 2021 peaks in levels just shy of the 91.00 mark at the beginning of the week. The recent advance in the dollar has been sustained by the moderate rebound in US yields – particularly the 10-year reference – after investors kept adjusting to the expected increase in fiscal spending under the Biden’s Administration and a probable pick-up in inflation. However, recent Fed-speakers have practically ruled out a move on rates (hikes) or the tapering of the ongoing bond-buying programme, which is seen tempering the move in the buck in the short-term. On the political front, all eyes will be on Washington on Wednesday, as Joe Biden will become the 46th US President. Data wise in the US, November’s TIC Flows will be the sole release later on turnaround Tuesday. What to look for around USD DXY regained buying interest after bottoming out in the 89.20 area in the first trading week of the new year and managed to advance to the vicinity of 91.00 so far this week, clinching at the same time new yearly peaks. The recovery in US yields keeps lending support to the greenback as investors continue to perceive a potential pick-up in inflation pressure/expectations in response to the most likely increment in fiscal stimulus under a Democrat White House. However, the outlook for the greenback remains fragile in the short/medium-term amidst massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy. US Dollar Index relevant levels At the moment, the index is losing 0.07% at 90.69 and faces the next support at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and the 88.25 (monthly low February 2018). On the other hand, a breakout of 91.01 (weekly high Dec.21) would open the door to 91.09 (55-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop).

FX option expiries for Jan 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2000 1.1bn 1.2100 567m 1.2190 1.4bn

FX option expiries for Jan 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.2000 1.1bn 1.2100 567m 1.2190 1.4bn 1.2200 2.7bn - GBP/USD: GBP amounts         1.3535 361m GBP  1.3600 311m 1.3700 308m - USD/JPY: USD amounts          103.00 1.4bn  103.25 735m 103.50 447m 103.65 390m 104.00 606m 104.35 362m - AUD/USD: AUD amounts 0.7700 1.2bn               

The European Commission is set to unveil a blueprint on Tuesday, which will outline how the European Union (EU) can strengthen the internationalizatio

The European Commission is set to unveil a blueprint on Tuesday, which will outline how the European Union (EU) can strengthen the internationalization role of the euro and thereby reduce the dollar’s dominance, Bloomberg reports, citing a draft of the plan. The Commission’s likely move is considered to insulate the bloc from financial risks. Key points from the draft document “The extra-territorial application of unilateral sanctions by third countries has seriously affected the EU’s and its member states’ ability to advance foreign policy objectives, to honor international agreements and to manage bilateral relations with sanctioned countries.” “At times, unilateral actions by third countries have compromised legitimate trade and investment of EU businesses with other countries.” “The plan also includes measures to help protect against currency shocks, and allow greater scrutiny of foreign takeovers.” “Promoting sustainable finance is an opportunity to develop EU financial markets into a global ‘green finance’ hub, bolstering the euro as the default currency for the denomination of sustainable financial products.” Market reaction EUR/USD keeps its range near 1.2100, up 0.17% on the day, mainly driven by a broadly weaker US dollar amid bigger fiscal stimulus expectations.EUR/USD testing 1.2100 amid USD pullback, ahead of ZEW, Yellen

USD/CHF picks up bids near 0.8912, up 0.05% on a day, ahead of the European session open on Tuesday. In doing so, the pair flirts with the resistance

USD/CHF teases confirmation of a bullish chart pattern, trims early Asian losses off-late.Two-week-old rising support line, 200-bar SMA add filters to the downside.Bulls can eye December tops on confirming the formation.USD/CHF picks up bids near 0.8912, up 0.05% on a day, ahead of the European session open on Tuesday. In doing so, the pair flirts with the resistance line of a short-term bullish chart pattern, called cup-and-handle. Considering the upbeat RSI and absence of strong bearish signals from MACD, coupled with sustained trading beyond 200-bar SMA, USD/CHF is likely to confirm the stated bullish pattern by breaking above 0.8925 immediate hurdle. Following that, the theoretical target of 0.9080 and December’s high of 0.9093 should lure the USD/CHF buyers. The early November lows near 0.8980 will offer a tough fight to the bulls following their first battle with 0.8925. Alternatively, an upward sloping trend line from January 06, at 0.8895 now, offers nearby support to the quote ahead of 200-bar SMA close to 0.8870. Should the USD/CHF sellers manage to conquer 0.8870 rest-point, 0.8850 and the monthly bottom around 0.8755 will be in the spotlight. USD/CHF four-hour chart Trend: Bullish  

The Reserve Bank of Australia (RBA) could likely extend its A$100 billion ($77.05 billion) government bond-buying programme beyond April when it meets

The Reserve Bank of Australia (RBA) could likely extend its A$100 billion ($77.05 billion) government bond-buying programme beyond April when it meets next month, the National Australia Bank (NAB) Chief Economist Alan Oster wrote in a note on Tuesday. Key quotes                                                                “RBA to announce an extension of its QE programme by an additional A$50 billion over another six months to help bring the unemployment rate down to 5% from around 7%.” “While the outlook has improved, the (coronavirus) pandemic has still been a large hit to the economy such that exceptionally easy policy is warranted.” "At some stage the RBA is likely to become unable to maintain this position as the recovery unfolds – we think the RBA will reach that point around mid-2021.”

GBP/USD extends the previous day’s recovery moves above 1.3600, currently up 0.15% intraday around 1.3605, while heading into the London open on Tuesd

GBP/USD stays mildly positive while picking up bids above 1.3600.Brexit deal reaches the House of Commons for revoting, UK-China tussle intensify.UK NHS Chairwoman fears the pandemic will throw unpredicted problems.The incoming US Treasury Secretary Janet Yellen’s speech, Brexit chatters and virus updates will be the key amid light calendar.GBP/USD extends the previous day’s recovery moves above 1.3600, currently up 0.15% intraday around 1.3605, while heading into the London open on Tuesday. Concerns relating to the UK’s ability to convince the European Union (EU) over losses in fisheries as well as vaccinations hopes join the US dollar weakness to favor the bulls. Global markets are upbeat amid calls that upcoming US official Yellen will be able to get the Biden government’s fiscal stimulus through the parliament. Though, cautious sentiment ahead of the key events and the fears of the coronavirus (COVID-19) probes the buyers. Although UK PM Boris Johnson pledged £23million to aid the fishing exporters who are affected by Brexit, per the BBC, Daily Express mentions, “British exporters are predicted to face €28 billion in losses this year alone.” Further, Bloomberg came out with the news suggesting “The rejection rate for cross-Channel cargo rose again last week to 168% of the third-quarter average. It had peaked for 2020 near the end of the year -- when France shut its borders to UK haulers for 48 hours to contain a new coronavirus strain -- before falling over the holiday period.” Not only cargos but the service providers are also criticizing the Brexit deal. The same could have London Mayor Sadiq Khan to claim the agreement signed on Christmas Eve was effectively a no-deal Brexit for the lucrative sector which is largely based in the capital. As a result, Britain is under immense pressure to alter the terms of the Brexit deal and hence today’s voting in the House of Commons could offer some promising moves. However, talks surrounding China have committed human rights abuses against its Uighur Muslim population, and its linkages to Brexit can spoil the mood while an independent panel, cited by The Guardian, has already criticized Beijing and the World Health Organization (WHO) for their role in covid restrictions. On a different page, Diana Mary " Dido " Harding, chairwoman of the UK National Health Services (NHS) Improvement said, per Daily Mail, that the UK coronavirus testing system is in one of the 'leading positions worldwide' to track new Covid variants – and admits she fears the pandemic will still 'certainly' throw up unpredicted problems in the future. In the case of the US, prepared remarks for today’s speech in the Senate suggest the incoming US Treasury Secretary, ex-Fed Chair, backs President-elect Joe Biden’s $1.9 trillion stimulus. While the same should have helped the risk-on mood and weighed on the US dollar index, indecision over the lifting of the American travel guide on Europe and Brazil probe the optimists. Looking forward, the return of the US traders can please the GBP/USD buyers amid hopes of further stimulus and Brexit optimism. Though, covid woes and unexpected disappointment from Yellen can test the buyers. Technical analysis GBP/USD justifies its bounce off 21-day SMA and a bullish pin bar candlestick pattern on the daily (1D) chart. Though, the 1.3600 and the 1.3700 round-figure precede an ascending trend line from January 04, at 1.3715 now, to challenge the bulls. Alternatively, a daily closing below 21-day SMA of 1.3573 will recall GBP/USD sellers targeting an ascending trend line from December 22, currently around 1.3515.  

EUR/USD trades close to 1.2100, holding onto the recovery mode ahead of the European open. The recovery in the risk sentiment amid expectations of add

EUR/USD attempts recovery as the USD bulls turn cautious.Stimulus hopes-driven risk-on mood weighs on the greenback.Next of note remains the German ZEW, Yellen’s hearings. EUR/USD trades close to 1.2100, holding onto the recovery mode ahead of the European open. The recovery in the risk sentiment amid expectations of additional fiscal stimulus is weighing on the safe-haven US dollar. US President-elect Joe Biden is set to take Office on January 20, pushing for the $1.9 trillion stimulus package already outlined last week. Meanwhile, the Treasury Secretary nominee Janet Yellen is likely to urge the government to "act big" with its next coronavirus relief package when she testifies before the Senate later on Tuesday.     Additionally, Eurozone finance ministers renewed push for fiscal support for their economies, in order to boost the post-pandemic recovery plans, also renders supportive for the riskier assets. Looking ahead, the major will remain at the mercy of the US dollar dynamics and risk trends ahead of Yellen’s testimony. In the meantime, the German ZEW survey could keep the EUR traders somewhat busy. EUR/USD technical levels “Any further upside past-1.2100 needs to cross the falling wedge’s resistance line, at 1.2116 now, to recall the EUR/USD buyers eyeing to refresh the multi-month high above 1.2349. On the contrary, the quote’s U-turn from present levels will have strong support around 1.2045/40 area including the pattern’s lower line and December 02 trough,” FXStreet’s Analyst Anil Panchal notes. EUR/USD additional levels  

USD/INR trims early Asian losses while rising to 73.18 during the initial Indian session on Tuesday. Even so, the quote fails to convince the buyers a

USD/INR picks up bids toward the intraday high.Bearish candlestick formation, sustained trading below 200-bar SMA highlights two-week-old support line.Monthly top adds to the upside barrier before the 74.00 threshold.USD/INR trims early Asian losses while rising to 73.18 during the initial Indian session on Tuesday. Even so, the quote fails to convince the buyers as a hanging man bearish candlestick on the four-hour (4H) chart joins extended weakness below 200-bar SMA. Hence, the latest uptick remains less harmful to USD/INR sellers ahead of 73.20 whereas the previous day’s high around 73.32 adds to the upside filter. In a case where USD/INR rises past-73.32, the key SMA and the monthly peak, respectively around 73.46 and 73.56, will lure the bulls before highlighting the 74.00 round-figure and December’s high of 74.12. Meanwhile, an ascending trend line from January 04, at 73.00 now, restricts the short-term downside of the USD/INR prices. Should the sellers manage to conquer the key support line, the current month’s low near 72.85 will be the key to watch. Overall, USD/INR is likely to remain depressed unless refreshing them monthly top. USD/INR four-hour chart Trend: Bearish  

The Bank of Japan (BOJ) is expected to make its Exchange-Traded Funds (ETF) and Real Estate Investment Trusts (J-REIT) buying more flexible when the b

The Bank of Japan (BOJ) is expected to make its Exchange-Traded Funds (ETF) and Real Estate Investment Trusts (J-REIT) buying more flexible when the board members will meet for the monetary policy examination in March, the latest Reuters poll of economists showed on Tuesday. Key findings “Eight analysts said the BOJ would revise its three-tiered deposit rate system that applies negative interest rates only to marginal excess bank reserves and two said the central bank would change the 10-year bond yield target to other durations.” “Economists were split on which direction the BOJ will move when it next changes policy.” “Twenty-one of 39 analysts forecast the BOJ would scale down stimulus, while 18 said it would ramp up monetary support.” “Analysts expected the economy to contract 2.4% in January-March. The poll had predicted a 2.1% expansion in December. The economy was expected to expand 3.3% in the fiscal year beginning in April, starting with 4.1% growth in the April-June quarter.” “Core consumer prices, which exclude volatile fresh food prices, will slip 0.5% this fiscal year before rising 0.2% next fiscal year.”

Having tested the $1800 level, Gold (XAU/USD) extends Monday’s swift recovery ahead of the much-awaited Treasury Secretary nominee Janet Yellen’s Sena

Having tested the $1800 level, Gold (XAU/USD) extends Monday’s swift recovery ahead of the much-awaited Treasury Secretary nominee Janet Yellen’s Senate hearings. Yellen is set to endorse a bigger coronavirus relief package. Meanwhile, President-elect Biden will push for the $1.9 trillion stimulus plan once he takes the office on January 20. Expectations of additional fiscal support to fight the pandemic recession continue to bode well for the inflation-hedge, gold. Let’s take a look at how the metal is positioned on the charts. Gold Price Chart: Key resistances and supports The Technical Confluences Indicator shows that gold sees healthy support levels, with the immediate cushion seen at $1836, which is the confluence of the SMA5 four-hour, Fibonacci 38.2% one-week and Bollinger Band one-hour Middle. The next major support awaits at the Fibonacci 23.6% one-week at $1828, below which $1826 could challenge the bears’ commitment. At that level, the Fibonacci 61.8% one-month coincides with the Fibonacci 38.2% one-day. Further south, the intersection of the previous week low and Fibonacci 61.8% one-day at $1818 will guard the downside before testing the $1816 cap – pivot point one-month S1. Alternatively, the bulls need to crack the Fibonacci 61.8% one-week at $1846 to extend the recovery momentum from over one-month lows of $1803. The next significant resistance is aligned at $1854, the pivot point one-week R1. A break above the latter could expose $1858, which is the convergence of the Fibonacci 38.2% one-month and and SMA50 four-hour. The SMA50 one-day at $1860 is the level to beat for the XAU bulls. Here is how it looks on the tool   About Confluence Detector The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.  

Asian stock markets fail to cheer the gains made in Japan and Australia as equities from surrounding the dragon nation turn red during the early Tuesd

Asian markets bear the burden of losses in China, Hong Kong and Indonesia.Hopes of US Senate’s support to Biden’s $1.9 trillion stimulus, China’s upbeat economics favor bulls.Cautious sentiment ahead of new government’s arrival to the White House, virus woes and a light calendar probes the bulls.Asian stock markets fail to cheer the gains made in Japan and Australia as equities from surrounding the dragon nation turn red during the early Tuesday. While expectations of more stimulus from the US and jump in the coronavirus (COVID-19) vaccinations have helped the bulls, together with second-tier data, cautious sentiment ahead of US President-elect Joe Biden’s inaugural celebration and mixed risk headline probes the optimism. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan rises 1.48% to flirt with the record top while Japan’s Nikkei 225 and Australia’s ASX 200 adds over 1.0% by press time. Other than the broad risk catalysts, welcome prints of Aussie HIA New Home Sales and headlines suggesting easing of the virus led restrictions in Queensland, as well as Japanese policymakers’ readiness to pump the economy, add strength to the Australian and Tokyo markets. South Korea’s KOSPI becomes the region’s biggest gainer with over 2.5% upside after the South Korean Vice Finance Minister said they will monitor long-term interest rates and market volatility, which in turn suggest further monetary easing. Moving on, India’s BSE Sensex and Nifty 50 follow the trend with mild gains even as domestic politics and farmers’ agitation roils the mood. On the contrary, Chinese markets couldn’t cheer upbeat comments from NDRC and the previous day’s growth figures, not to forget Moody’s welcome analysis of the Asia-Pacific region, as US President Donald Trump pushes for cutting down Chinese drones from American military usage. Additionally, China also marked an increase in virus cases from 109 to 118 the previous day. Elsewhere, New Zealand’s NZX 50 drops around 0.50% while following markets in Beijing as well as increased restrictions for foreigners. Indonesia’s IDX Composing and Hong Kong’s Hang Seng are in the same line. It should be noted that Hong Kong Chief Executive Carrie Lam announced the extension of social distancing measures due to expire on Thursday. Looking forward, incoming US Treasury Secretary Janet Yellen, ex-Fed Chair, will confront the American Senate to back the Biden Government’s bid for covid stimulus. Although her prepared remarks have already suggested she is likely to praise the move, any surprise or disappointment won’t be taken lightly as she is expected to become the only person who can speak on the USD in the Democratic group.

AUD/USD takes the bids near 0.7711, up 0.33% intraday, during early Tuesday. The Aussie pair dropped to the lowest in two weeks the previous day after

AUD/USD eases from intraday high while keeping corrective pullback from 21-day SMA.Bearish MACD, sustained break of 11-week-old trend line keeps sellers hopeful.AUD/USD takes the bids near 0.7711, up 0.33% intraday, during early Tuesday. The Aussie pair dropped to the lowest in two weeks the previous day after extending the downside break of an ascending trend line from November 02. However, 21-day SMA triggered the quote’s bounce despite bearish MACD. As a result, AUD/USD buyers should remain cautious unless the quote regains above the previous support line, at 0.7740, a break of which will eye for the 0.7800 threshold. Though, a downward sloping trend line from January 06 and the monthly top, respectively, around 0.7805 and 0.7820, will be tough nuts to crack for the bulls afterward. Meanwhile, a downside break of 21-day SMA, at 0.7687 now, may catch a breather around December 17 top of 0.7640 ahead of re-testing 50-day SMA, currently around 0.7525. In a case where the AUD/USD bears dominate past-0.7525, highs marked during early December near 0.7480 can return to the charts. To sum up, the AUD/USD gains are likely ephemeral unless regaining above the immediate resistance line, a break of which will restore the earlier uptrend targeting initial 2018 tops. AUD/USD daily chart Trend: Pullback expected  

USD/CAD extends decline in tandem with the US dollar. The bulls defending the critical support near 1.2715, for now. Focus shifts to the Canadian dat

USD/CAD extends decline in tandem with the US dollar.The bulls defending the critical support near 1.2715, for now.Focus shifts to the Canadian data and Treasury Sec. nominee Yellen.USD/CAD extends the pullback from five-day tops into Tuesday, although the bears appear to take a breather following a steady decline from 1.2760. The spot fell in tandem with the US dollar, as the return of risk-on flows weighed on the safe-haven demand for the greenback. Markets cheer calls for higher fiscal stimulus under Biden’s presidency after Treasury Secretary Nominee Janet Yellen urged Congress to do more to fight the pandemic recession. On Monday, USD/CAD rallied hard and tested the 1.2800 level after the Canadian dollar was hit by the reports that Biden is expected to cancel the controversial Keystone XL Pipeline on his first day in office. The pipeline is projected to carry oil nearly 1,200 miles (1,900km) from the Canadian province of Alberta down to Nebraska, to join an existing pipeline. Markets now await the Canadian Manufacturing Sales data and Yellen’s inaugural speech as the Treasury Secretary due later in the NA session today for fresh trading directives. From a near-term technical perspective, the price has stalled its decline above the critical support near 1.2715, which is the confluence of the 200-hourly moving average (HMA) and 100-HMA. The Relative Strength Index (RSI) has also taken a U-turn from lower levels, suggesting a brief bounce. The bullish 50-HMA support now resistance at 1.2736 will be tested on the road to recovery. A break above the latter could expose the bearish 21-HMA barrier at 1.2760. To the downside, a breach of the 1.2715 support could call for a test of the 1.2700 psychological level. The next relevant support is aligned at the January 13 low of 1.2680. USD/CAD: Hourly chart USD/CAD: Additional levels  

The National Development and Reform Commission, China’s state planner said Additional quotes “Will roll out more targeted measures to help companies.”

The National Development and Reform Commission, China’s state planner said Additional quotes “Will roll out more targeted measures to help companies.” “Believes China has the ability and conditions to consolidate economic recovery this year.” “Monetary policy will provide the necessary support to struggling firms this year.” “Temporary policies rolled out during pandemic cannot last in the long term.“ “China will control the pace of policies to ensure stable economic recovery, no "policy cliff".” “Incorrect to say China's economic policies will be fully rolled back this year.”   more to come ...

Moody’s Investors Service, the US-based ratings agency, is out with its latest review report on the Asia-Pacific (APAC) corporates for 2021, in light

Moody’s Investors Service, the US-based ratings agency, is out with its latest review report on the Asia-Pacific (APAC) corporates for 2021, in light of the global economic recovery and loose fiscal and monetary support. Key takeaways “Despite fragile recovery, credit conditions for APAC corporates likely to improve in 2021.” “Gradual economic recovery, driven by China, ongoing fiscal, monetary support to abate negative rating trend seen in 2020. “ “Expects central banks will likely keep interest rates at very low levels, continue to provide fiscal and monetary stimulus.” Related readsS&P 500 Futures gain half a percent towards 3,800 as markets brace for Biden welcomeUSD/JPY Price Analysis: Picks up bids below key hurdles under 104.00

US President-elect Joe Biden is considering plans to extend the European travel restrictions, blocking President Donald Trump’s move to lifted those r

US President-elect Joe Biden is considering plans to extend the European travel restrictions, blocking President Donald Trump’s move to lifted those requirements effective Jan. 26, The Wall Street Journal (WSJ) reported, citing President-election Joe Biden’s spokeswoman Jen Psaki said on Tuesday. Key quotes  “On the advice of our medical team, the Administration does not intend to lift these restrictions on 1/26.”  “With the pandemic worsening, and more contagious variants emerging around the world, this is not the time to be lifting restrictions on international travel.” “in fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of COVID-19.” Trump signed an order Monday lifting the restrictions he imposed early last year in response to the pandemic. Market reaction The risk recovery continues despite the above headlines, with the S&P 500 futures up 0.54% and US dollar index losing 0.10% to trade near 90.70. All eyes remain on the Treasury Secretary nominee Janet Yellen’s selection and her speech due later this Tuesday.

US dollar index (DXY) remains on the back foot around 90.68, down 0.10% intraday, during early Tuesday. The greenback gauge versus major currencies su

DXY extends pullback from highest in one month.Monday’s Doji at multi-day top, overbought RSI favor further consolidation of gains.200-bar SMA adds to the downside filters, bulls need a clear break of December 07 top for fresh entries.US dollar index (DXY) remains on the back foot around 90.68, down 0.10% intraday, during early Tuesday. The greenback gauge versus major currencies surged to the highest since December 21 the previous day before taking a U-turn from 90.95. In doing so, the index prints Doji candlestick formation suggesting a reversal in the established move at the multi-day high. The signals from the candlestick pattern gained extra strength amid overbought RSI conditions. As a result, DXY dropped afterward and is currently targeting an upward sloping trend line from January 06, at 90.48. It should, however, be noted that the gauge’s downside past-90.48 will need to break the 200-bar SMA level of 90.39 and the 90.00 threshold to convince the bears. Alternatively, a clear run-up beyond the latest high of 90.95 won’t be enough to recall the DXY buyers as the 91.00 threshold and high marked on December 07, around 91.25 become extra hurdles to watch. Overall, DXY is likely to witness a pullback during the short-term uptrend. However, risk-on mood and expectations of further optimism may challenge the bulls should the quote ignores immediate supports. Read: S&P 500 Futures gain half a percent towards 3,800 as markets brace for Biden welcome DXY four-hour chart Trend: Further weakness expected  

The global economic outlook remains highly uncertain and therefore the International Monetary Fund (IMF) needed more resources to help heavily indebt

The global economic outlook remains highly uncertain and therefore the International Monetary Fund (IMF) needed more resources to help heavily indebted countries, the global lender’s Managing Director Kristalina Georgieva said at an online news conference on Monday. Key quotes “A new allocation of the IMF’s own currency, Special Drawing Rights (SDRs), would give more funds to use address both the health and economic crisis, and accelerate moves to a digital and green economy.” “IMF had rapidly increased concessional financing to emerging market and developing economies, including through donations by member countries of some $20 billion in existing SDRs.” “It will continue to be so important, even more important, for us to be able to expand our capacity to support countries that have fallen behind.”

S&P 500 Futures probe the intraday high while taking the bids near 3,783 during early Tuesday. The risk barometer rises for the second consecutive day

S&P 500 Futures extend Monday’s recovery moves amid a quiet Asian session.Yellen’s prepared remarks for Tuesday’s Senate speech favor Biden’s stimulus.Virus woes recede amid vaccine optimism, light calendar tames market moves.S&P 500 Futures probe the intraday high while taking the bids near 3,783 during early Tuesday. The risk barometer rises for the second consecutive day as global markets prepare for a good welcome party for US President-elect Joe Biden and company, maybe due to his fiscal relief goals. Also favoring the tone could be an absence of major negatives from the economic calendar and the coronavirus (COVID-19) front. While fears of the widening budget deficit and the Fed’s uneasy face initially raised doubts on the Biden’s $1.9 trillion stimulus, recently published prepared comments from Janet Yellen, to be US Treasury Secretary, favored the move while citing the record low-interest rates. The ex-Fed Chair is up for her first Senate speech as the incoming Biden official on Tuesday. It should be noted that US President Donald Trump’s easing of travel restrictions from Europe and Brazil, likely to be challenged by Biden and Company, also favored the risks. On the contrary, China reports an increase of nine covid cases while the number of people hospitalized for covid-19 up for the second day at 25,584, more than one month high. It should be noted that the virus-led restrictions in the UK, Japan and the US are likely to weigh on the upcoming economics and challenge the risk-on mood. Amid these plays, stocks in Japan and Australia gain over 1.0% while the US 10-year Treasury yields stay positive around 1.10% by press time. Looking forward, Yellen’s speech will be the key for markets ahead of Wednesday’s inaugural ceremony of US President-elect Joe Biden. Also important will be tomorrow’s monetary policy meeting by the ECB. Also read: AUD/USD: Risk-on mood, upbeat second-tier Aussie data back bulls attacking 0.7700

The price has rallied from the structure in what could be an extended correction of at least 50% mean reversion of the recent bearish daily impulse. T

Bulls are stepping in for a restest of the prior daily support. The daily M-formation offers an opportunity to target the upside prior to the downside extension. The price has rallied from the structure in what could be an extended correction of at least  50% mean reversion of the recent bearish daily impulse.  The following is a top-down analysis that illustrates where the next opportunity could arise in targeting the prior support of the M-formation on the daily chart. Daily chart The daily chart offers a bearish engulfing candlestick pattern as part of an overextended M-formation.  While the bearish engulfing is a topping pattern, the M-formation would be expected to be completed once the price has retested the prior support, aka, new resistance.  This offers an opportunity to target the nose of the M-formation from a lower time frame, such as the hourly chart as follows: Hourly chart Bulls have rallied to test the first key resistance. Providing this level holds, an opportunity would arise for bulls to buy into the prospects of a correction of the bearish impulse on the daily time frame at a discount.  If the price corrects to restest the new support structure, a buy limit would activate a long entry with a target towards a 50% mean reversion of the bearish impulse, protected with a stop loss below the recent lows.  This would offer in the region of a 1:2 risk-reward opportunity.   Thereafter, bears would seek to reengage and target a longer-term downside target below the recently made lows, extending the bearish impulse from the top of the bull rally. 

USD/JPY rises to 103.76, up 0.09% intraday, amid initial Tuesday trading in Tokyo. In doing so, the yen pair not only refreshes the intraday high but

USD/JPY buyers battle resistance line of a short-term symmetrical triangle.100 and 200-HMA add to the upside barriersKey Fibonacci retracements and January 06 raise bars for bears’ entry.USD/JPY rises to 103.76, up 0.09% intraday, amid initial Tuesday trading in Tokyo. In doing so, the yen pair not only refreshes the intraday high but also probes a symmetrical triangle formation established since the last Thursday. Although strong RSI conditions favor further USD/JPY upside, 100-HMA and 200-HMA, around 103.80/85, will challenge the bulls. Also acting as an upside barrier is the 104.00 threshold and the monthly peak surrounding 103.40. On the downside, the stated triangle’s support line, at 103.65 now, precedes 50% and 61.8% Fibonacci retracements of January 5-11 upside, respectively near 103.50 and 103.28, to restrict immediate declines of the quote. Additionally, January 06 top near 103.45 offers extra support to stop USD/JPY sellers before directing them towards the monthly low of 102.60. USD/JPY hourly chart Trend: Pullback expected  

In recent trade today, the People’s Bank of China (PBOC) set the yuan mid-point against the dollar at 6.4882 vs the last close of 6.4921. About the fi

In recent trade today, the People’s Bank of China (PBOC) set the yuan mid-point against the dollar at 6.4882 vs the last close of 6.4921. About the fix China maintains strict control of the yuan’s rate on the mainland, the current known as CNY which differs from its offshore yuan, or CNH, which not as tightly controlled as the onshore yuan. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

Gold prices are trading at $1,838.76 and between a low of $1,836.11 and $1,839.47. Pressured by a relentless correction in the greenback, gold prices

Gold prices are attempting to recover as te DXY stalls in its bullish correction.The dollar could still be a catalyst for a deeper positioning squeeze in the yellow metal.Gold prices are trading at $1,838.76 and between a low of $1,836.11 and $1,839.47.  Pressured by a relentless correction in the greenback, gold prices have been struggling of late.  The US dollar strengthened for a third consecutive day on Monday, reaching a four week high, as risk aversion swept through currency markets, weighing on bullish attempts on the yellow metal. With the US markets shut for a holiday on Monday and Joe Biden set to be inaugurated as the next US president on Wednesday, investors are sidelined and watching carefully the new administration's stance on the US dollar.  At the start of this week, the Wall Street Journal wrote a piece arguing that while the outgoing President Donald Trump has publicly railed against the dollar's strength for years, Janet Yellen, Biden's pick to take over the US Treasury, is expected to make clear that the United States does not seek a weaker dollar. Moreover, the president-elect, Joe Biden, has put out a plan for a $1.9 trillion stimulus package and the market had already baked this into the US dollar.  However, the supply is being unwound and has the opposite effect due to a rise in US Treasury yields. DXY monthly chart The prospects of higher rates have squeezed their way through into the market's sentiment, nailing down the coffin for the gold bugs.  ''Gold is a casualty of the Fed's change in tone, as the Central Bank attempts to test the market's resiliency against higher rates,'' analysts at TD Securities explained. ''After all, recent fedspeak has emphasized reflationary tailwinds, pushing back against the need to extend the weighted average maturity of their Treasury purchases.'' The analysts went on to argue that the rise in rates has thus far remained contained, keeping some complacent length from being shaken-out for the time being.  ''That being said, the recent strength in the broad USD may be the catalyst for a deeper positioning squeeze in the yellow metal.'  

AUD/USD jumps to 0.7698, at an intraday high with 0.10% gains, during Monday’s Asian session. The aussie pair recently benefited from upbeat data at h

AUD/USD takes the bids to refresh intraday high after Monday’s downbeat performance.Incoming Treasury Secretary Janet Yellen’s indirect support to Biden’s stimulus favor the risk-takers.Aussie ANZ Roy Morgan Weekly Consumer Confidence, HIA New Home Sales for December flashed welcome readings.Yellen’s speech, virus update will be the key before Wednesday’s ECB and Biden’s inaugural speech, also Thursday’s Aussie jobs.AUD/USD jumps to 0.7698, at an intraday high with 0.10% gains, during Monday’s Asian session. The aussie pair recently benefited from upbeat data at home and risk-on mood as Tokyo opens. However, bulls are cautious ahead of the key events in the US. Australia’s ANZ Roy Morgan Weekly Consumer Confidence eases to 108.7 from 108.9. Even so, the Australia and New Zealand Banking Group (ANZ) said, “Consumer confidence was down 0.2% last week, with the details mixed. Confidence is higher than this time last year, with the sentiment in January 2020 impacted by the bushfires. ‘Current financial conditions’ deteriorated 3.0%, while ‘future financial conditions’ improved by 2.4%. ‘Current economic conditions’ rose 1.2%, while ‘future economic conditions’ inched up 0.5%. On the other hand, the HIA New Home Sales report for December 2020 reads, “New Home Sales reached remarkable heights in December, nearly doubling compared to the number of sales recorded in November. Sales during the December 2020 quarter were 48.7 percent higher than the September 2020 quarter and 99.5 percent higher than the same time the previous year. This is the second strongest month of new home sales in the 20 years of the survey. This result is only exceeded by March 2001.” It should be noted that there was zero new coronavirus (COVID-19) cases from the Australian Capital Territory (ACT) and Victoria per ABC News. However, China marked an increase in virus cases from 109 to 118 the previous day. Elsewhere, New Zealand raised bars for foreign arrivals, except for Australia and other Pacific friends, while US President Donald Trump’s executive order releasing Europe and Brazil from travel restrictions seem to be challenged by the upcoming Biden government. Also affecting the risk could be incoming Treasury Secretary Yellen’s indirect support to US President-elect Joe Biden’s heavy stimulus. Against this backdrop, S&P 500 Futures rise 0.50% while stocks in Australia and Japan are also up by press time. Moving on, Yellen’s speech in the US Senate will be the key ahead of Wednesday’s inaugural ceremony of Biden and the ECB meeting. At home, Thursday’s release of employment data for December will be important to watch. Technical analysis AUD/USD reluctance to close beneath 21-day SMA, at 0.7686 now, directs buyers to aim for the previous support line from November 02, currently around 0.7745.  

Australia HIA New Home Sales (MoM) climbed from previous 15.2% to 32.5% in December

EUR/USD portrays choppy trading moves between 1.2075 and 1.2080, currently near 1.2076, during Tuesday’s Asian session. The pair dropped to the lowest

EUR/USD wavers in a small range after bouncing off seven-week low.Bullish chart pattern, recovering MACD keep buyers hopeful.Early February lows, 61.8% Fibonacci retracement add to the downside filters.EUR/USD portrays choppy trading moves between 1.2075 and 1.2080, currently near 1.2076, during Tuesday’s Asian session. The pair dropped to the lowest since December 02 the previous day before taking a U-turn from the support line of a two-week-old falling wedge chart pattern on the four-hour (4H) play. Considering the recovery in prices backed by the improving MACD signals, the quote is likely to direct the corrective pullback towards the 1.2100 threshold, for now. However, any further upside past-1.2100 needs to cross the falling wedge’s resistance line, at 1.2116 now, to recall the EUR/USD buyers eyeing to refresh the multi-month high above 1.2349. During the upside, Wednesday’s top around 1.2210 can offer an intermediate halt while April 2018 peak surrounding 1.2415 can please the bulls afterward. On the contrary, the quote’s U-turn from present levels will have strong support around 1.2045/40 area including the pattern’s lower line and December 02 trough. Even if the EUR/USD prices remain weak past-1.2040, 61.8% Fibonacci retracement of November 23 to January 06 upside and November 30 top, around 1.2010-1.2000, will challenge the south-run. EUR/USD four-hour chart Trend: Pullback expected  

NZD/USD remains on the back foot for the third consecutive day while easing to 0.7110 during Tuesday’s Asian trading. In doing so, the kiwi pair fades

NZD/USD stays mildly offered near three-week low, recently bounced off intraday low.New Zealand’s Q4 NZIER Business Confidence, Electronic Card Retail Sales for December improved.New Zealand to require a pre-departure covid test from next week amid fears of virus spread.US politics, COVID-19 updates will be the key to follow.NZD/USD remains on the back foot for the third consecutive day while easing to 0.7110 during Tuesday’s Asian trading. In doing so, the kiwi pair fades bounce off 0.7096, the lowest level since December 29 flashed the previous day, despite welcome fundamentals from New Zealand. As per the fourth-quarter (Q4) Quarterly Survey of Business Opinion (QSBO) from the New Zealand Institute of Economic Research (NZIER), also known as NZIER Business Confidence, business optimism in the pacific nation has improved during late 2020. The report said, “A net 16% of businesses expect a deterioration in general economic conditions over the coming months, on a seasonally adjusted basis – lower than the 38% in the previous quarter, and well below the 68 percent of businesses feeling pessimistic in March 2020.” Following that, New Zealand’s Electronic Card Retail Sales grew past-1.0% forecast and 1.4% previous readouts to 3.5% YoY in December. On the negative side, the New Zealand government raised bars for foreign arrivals by requiring a pre-departure covid-negative test result, except Australia, Antarctica and most Pacific Island countries, starting from January 25. Elsewhere, US President Donald Trump eases travel restrictions from Brazil and Europe, per Reuters, while Australia has its activity restrictions on the cards. It should be noted that the kiwi pair’s downside the previous day failed to justify upbeat China data. Recently, US President Trump published an executive order to prioritize removing Chinese drones from government fleets. To provide some background, China is the world’s largest commodity player and any negative for it could adversely affect Antipodeans including NZD/USD. Considering a light calendar in Asia, coupled with a cautious sentiment ahead of the key speeches from the incoming government to the US, NZD/USD may remain depressed despite upbeat domestic catalysts. Technical analysis A sustained downside break of an ascending trend line from November 13, currently around 0.7155, directs NZD/USD sellers toward a 50-day SMA level of 0.7077.  

New Zealand Electronic Card Retail Sales (MoM) increased to 19.2% in December from previous 0.1%

GBP/CAD bulls remain in the game to target the 1.7470s. MACD holds above zero and the 20-EMA supports. Further to the prior session's analysis, GBP/CA

GBP/CAD bulls remain in the game to target the 1.7470s. MACD holds above zero and the 20-EMA supports.  Further to the prior session's analysis, GBP/CAD Price Analysis: Bulls taking the reins and eye a daily extension, the price, as expected moved, triggered a long setup. The following is an illustration of the current state of play and offers a second opportunity to take part in what has a high probability of resulting in a 1:3 risk to reward trade.  For a recap, the thesis of the setup was derived from a top-down analysis and bullish bias on the longer-term time frames: Weekly chart The weekly chart shows that the price has corrected the bullish impulse. A bullish continuation would be expected at this juncture, especially given the long wick on the prior week's candle,  This merely represents the price flow on the lower time frames. Daily chart As the eclipse illustrates, the weekly wick is the make-up of the daily impulse and correction.  Therefore, the next weekly stick would be expected to fill in the space of the prior week's wick as the price extends higher following the daily correction.  4-hour chart Prior analysis: The price was predicted to break higher and then pull back to test the old resistance turned support. Live market: The price rose through resistance but the structure failed to hold on a restest.  Nevertheless, the technical environment remains bullish. MACD is above zero and the price is above the 20-EMA. Bulls can take advantage of the live market with a set up that offers a 1:3 risk to reward, with a stop loss below the structure:

GBP/USD picks up bids around 1.3590 amid the initial Asian trading session on Tuesday. In doing so, the Cable justifies its bounce off 21-day SMA and

GBP/USD extends the previous day’s recovery moves from 1.3530.Bullish candlestick formation, sustained trading above 21-day SMA favor buyers.Monthly resistance line adds to the upside barriers.GBP/USD picks up bids around 1.3590 amid the initial Asian trading session on Tuesday. In doing so, the Cable justifies its bounce off 21-day SMA and a bullish pin bar candlestick pattern on the daily (1D) chart. With the normal RSI conditions joining the aforementioned price-positive catalysts, GBP/USD is for regaining its status above the 1.3600 mark. However, there are multiple upside barriers near 1.3660 that test the bulls afterward. Also acting as the key resistance are the 1.3700 round-figure and an ascending trend line from January 04, at 1.3715 now. Alternatively, a daily closing below 21-day SMA of 1.3573 will recall GBP/USD sellers targeting an ascending trend line from December 22, currently around 1.3515. It should, however, be noted that any further weakness past-1.3515 will not hesitate to probe a five-week-old support line near 1.3375. GBP/USD daily chart Trend: Bullish  

USD/CAD hit highs at pretty much bang on the 1.2800 level during the early part of Monday’s European session, but the pair has since reversed to trade

USD/CAD has reversed back from Monday highs at 1.2800 to the 1.2750 area.Reports that Biden will axe the Keystone XL as early as his first day in office.US politics, a host of Canadian data and the Bank of Canada rate decision will be in focus this week.USD/CAD hit highs at pretty much bang on the 1.2800 level during the early part of Monday’s European session, but the pair has since reversed to trade around the 1.2750 mark. The failure to break above the big figure also coincided with a failure to break above a long-term downtrend linking the 13, 21 and 22 December and 11 January highs. Thus, the pair maintains its bearish long-term bias for now. Trade was quiet on Monday and volumes low, with US participants away for MLK Day, hence the difficulties USD/CAD (and other major FX pairs) had in breaking key levels. The pair finished Monday trade with modest gains of about 0.1% or 14.8 pips and was broadly unfazed by marginally stronger than expected Housing Starts data for December (came in at 228.3K versus expectations for 227K). Biden set to cancel Keystone XL pipeline permit US President-elect Joe Biden is planning to cancel the permit for the $9B Keystone XL pipeline project as one of his first acts in office and maybe even as soon as his first day, according to sources cited by Reuters. In response, Alberta Premier Jason Kenney said on Twitter that cancellation would eliminate jobs, weaken US/Canada relations and undermine American energy security by making the country more dependent on imported oil from the OPEC+ cartel. Kenney also reportedly sees a strong case for seeking damages under the two countries NAFTA agreement should the US cancel the project. According to Adam Button, chief currency analyst at ForexLive, “the Canadian dollar is indicating some disappointment on the Keystone XL front… Few market watchers were expecting the pipeline to be approved but that it will be axed so quickly indicates that Trudeau doesn't have much sway with Biden”. Driving the week USD/CAD will continue to track risk appetite and crude oil prices. More specifically, markets are on notice for incoming US Treasury Secretary Janet Yellen’s testimony to the Senate Finance Committee on Tuesday for commentary on the Biden administrations USD policy (pre-released text suggests she will say the government will be taking a hands-off approach to FX rates) and anything on fiscal stimulus. US President-elect Joe Biden’s inauguration on Thursday will also be eyed for any fiscal stimulus talk; markets are increasingly doubting the ability of the incoming President to implement his spending plans in full. In terms of the loonie more specifically, it’s a busy week of domestic fundamentals; November Manufacturing and Wholesales Sales will be released on Tuesday, December Consumer Price Inflation numbers of Wednesday, December New Housing Price Index figures on Thursday and December Retail Sales on Friday. But the main event of the week will be the Bank of Canada monetary policy decision; markets currently price a non-negligible chance that, following dovish commentary back in December (especially regarding recent CAD strength), the bank might be tempted to go with a micro-cut to interest rates to 0.1% from 0.25%. Credit Agricole think that “the BoC will maintain a stable outlook given that policy rates are at their lower bound and after the policy measures the MPC announced late last year to lengthen the average maturity of its QE purchases”. Moreover, the bank thinks that “the BoC will continue to focus on the Canadian economic outlook and respond to any potential deterioration in the medium - to long-term by increasing the size of its asset purchases”. As a result, concludes Credit Agricole, the loonie “will likely take its cue from UST yields and global commodity prices next week”.  

WTI fades recent corrective pullback from $51.80 while easing to $52.16 amid the initial Asian session on Tuesday. Even so, the oil benchmark manages

WTI clings to mild gains above $52.00 after bouncing off lowest in six days.US dollar weakness, virus woes battle off in America and rising rig counts.US-Iran tension, Gaza-Israel conflict fail to entertain oil traders.US dollar moves, risk catalysts will be the key amid delayed inventory data.WTI fades recent corrective pullback from $51.80 while easing to $52.16 amid the initial Asian session on Tuesday. Even so, the oil benchmark manages to avoid losses despite declining to one week low the previous day. While the pullback of the US dollar index (DXY) from a fresh one-month high joins the coronavirus (COVID-19) woes to challenge the oil bulls, vaccine and stimulus hopes add to the geopolitical headlines concerning Iran and Israel to test the WTI sellers amid off in the US and a light calendar. It should also be noted that China’s upbeat GDP and Industrial Production data helps the black gold traders to remain optimistic. Recently escalating optimism over US President-elect Joe Biden’s official entry to the White House, together with heavy stimulus and vaccine rollout news, favor commodities and weigh on the US dollar’s safe-haven demand. Also backing the moves are chatters that ex-Fed Chair, to be US Treasury Secretary, Janet Yellen, is also likely to support Biden’s heavy relief package despite fears of widening deficit. Elsewhere, Iran captured a US businessman and is less in the mood to renew ties with America while Israel launched airstrikes on Gaza Strip on Monday. There are also some unconfirmed reports of the US airstrikes in Iraq. It’s worth mentioning that US oil rig counts, as conveyed by Baker Hughes, rose 13 to 373 in the week to January 15, its highest since May, during the last week and added to the downside pressure. Looking forward, a light calendar in Asia keeps oil traders looking for fresh clues ahead of the key speeches from Yellen and Biden, not to forget the ECB. The covid updates and any additional stimulus hint, be it from Japan and or the UK most likely, could add to the upside momentum of the commodity. Technical analysis Monday’s Doji candlestick on the daily (1D) chart favors WTI bulls targeting a fresh multi-month high of $54.00. However, $52.60/70 offers a tough short-term resistance to clear before confirming further upside.  

AUD/JPY sellers attack the lower end of the short-term trading range above 79.50, currently down around 79.63, during the early Asian session on Tuesd

AUD/JPY consolidates recent losses after declining to two-week low the previous day.Bearish MACD, sustained support line break favor sellers.Seven-day-old falling trend line adds to the upside filters.AUD/JPY sellers attack the lower end of the short-term trading range above 79.50, currently down around 79.63, during the early Asian session on Tuesday. The quote dropped to the lowest since January 05 after breaking an upward sloping trend line from November 02 on Monday. However, 21-day SMA stopped the quote’s further declines amid a dull session. Even so, the strongest bearish MACD in over two months join a successful downside break of the key support line, now resistance, keeps the AUD/JPY sellers hopeful. However, a clear break below the 21-day SMA level of 79.60 becomes necessary for the bears to eye 78.85/80 support zone comprising the mid-December highs and early January lows. Following that, AUD/JPY south-run may have to conquer the 50-day SMA level of 78.18 before revisiting the early December levels surrounding 77.50. Meanwhile, corrective pullback beyond the previous support line, at 80.10 now, may fall short of convincing the AUD/JPY buyers as a descending trend line from January 08, currently around 80.80, will precede the monthly peak near 81.00 to challenge the further upside. AUD/JPY daily chart Trend: Bearish  
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