200155 January 31, 2022 22:29 FXStreet Market News
The S&P 500 held near-term support at 4287/76 on Friday and the subsequent strong recovery has turned the spotlight back on resistance at 4434/50 – the key 200-day average and 38.2% Fibonacci retracement of the January collapse. Analysts at Credit Suisse think the pressure is now for a close above here for a deeper corrective recovery to 4495, potentially 4521/31.
“A close above 4450 should see resistance next at the 13-day exponential average at 4481, then 4495, which we would look to cap at first. Should strength extend, we would see scope for the recovery to extend to 4521/31.”
“Near-term support moves to 4388, then 4374, with a break below 4332 needed for a retest of 4292/76. Beneath here can quickly reassert a bearish tone again for a retest of support at 4223/4199 – the recent low, the 23.6% retracement of the entire 2020/2021 uptrend and the 38.2% retracement of the rally from October 2020.”
See: S&P 500 Index to tank towards a 3,400-3,700 range on escalation of Ukraine-Russia crisis – UBS
Full Article200154 January 31, 2022 22:26 FXStreet Market News
EUR/USD is making a weak attempt to recover from the lows on Friday, remaining short of a test of 1.12. A break above here would be the first sign of a possible reversal in the EUR’s losses, economists at Scotiabank report.
“The currency’s quick drop from the high 1.14s through the low 1.10s over the course of two weeks has maybe briefly stalled as it nears oversold conditions. However, price trends point to an imminent test of 1.11, with little in the EUR’s way to prevent then a test of 1.10.”
“A topside break of 1.12 would be the first sign to watch for a possible reversal in the EUR’s losses.”
Full Article200152 January 31, 2022 22:21 FXStreet Market News
The EUR/USD pair trades around 1.1190 in a slow start to a busy week. The dollar gave up some ground across the board, but the slide seems mostly corrective after the post-Fed sharp appreciation. Meanwhile, stocks kick-started the week with a mixed tone, although most Asian and European indexes trade in the green, while US government bond yields ticked higher, but not enough to revive the dollar’s demand.
European data came in mixed. The EU Q4 Gross Domestic Product printed at 0.3% as expected, according to preliminary estimates. Germany published the first estimate of the January Consumer Price Index, which jumped to 4.9% YoY. The harmonized reading came in at 5.1%, below the previous 5.7%, but above the 4.7% expected.
The US macroeconomic calendar has little to offer today, as the country will only publish the January Chicago Purchasing Manufacturing Business Index, foreseen at 9.9 from 8.1 previously.
The EUR/USD pair trades below the 23.6% retracement of its latest daily decline at 1.1205, an immediate resistance level. The daily chart shows that the pair keeps developing far below bearish moving averages, while technical indicators have recovered modestly but remain within negative levels without bullish strength.
In the near-term, and according to the 4-hour chart, the pair has advanced above a firmly bearish 20 SMA, while technical indicators corrected extreme oversold readings but so far are unable to overcome their midlines. The Momentum keeps heading north, yet the RSI turned flat at around 46, indicating limited buying interest.
Support levels: 1.1150 1.1105 1.1060
Resistance levels: 1.1205 1.1245 1.1290
View Live Chart for the EUR/USD
Full Article200151 January 31, 2022 22:21 FXStreet Market News
GBP/USD rises to mid-1.34s. This move leaves the pair technical picture looking less bearish but economists at Scotiabank still expect the cable to suffer further losses towards the 1.33/32 region.
“The overall trend in the pound remains bearish, but the recovery from the break under 1.34 on Thursday leaves the shorter-term GBP picture looking a touch less negative.”
“The first real test of momentum is 1.3450 resistance zone. Beyond the mid-figure zone, the GBP faces resistance around 1.3500 and the 100-day MA of 1.3521.”
“Support is 1.3390/400 followed by 1.3355/75. Below this area, the pound risks losses to 1.33/1.32.”
Full Article200150 January 31, 2022 22:05 FXStreet Market News
The AUD/USD pair gained strong positive traction on Monday and for now, seems to have stalled its recent decline to the lowest level since July 2020. The pair maintained its bid tone through the early North American session and was last seen trading near the daily high, just above mid-0.7000s.
Bulls are now looking to build on the momentum further beyond the 23.6% Fibonacci retracement level of the 0.7315-0.6967 downfall amid modest US dollar pullback from a one-and-half-year high. Apart from this, the uptick could also be attributed to some repositioning trade ahead of the RBA on Tuesday.
From a technical perspective, any subsequent move up is likely to confront stiff resistance near the 0.7090 strong horizontal support breakpoint. This should act as a key pivotal point for traders, which if cleared decisively will suggest that the AUD/USD pair has bottomed out in the near term.
Some follow-through buying above the 0.7100 mark, which coincides with the 38.2% Fibo. level, will reaffirm the positive bias and pave the way for additional gains. The AUD/USD pair could then accelerate the move towards testing the 50% Fibo. level, around the 0.7140-0.7145 region.
On the flip side, a fresh leg down might now find decent support near the key 0.7000 psychological mark ahead of last week’s swing low, around the 0.6970-0.6965 region. A convincing break below will be seen as a fresh trigger for bearish traders and make the AUD/USD pair vulnerable.
The downward trajectory could then get extended towards the next relevant support near mid-0.6800s before the AUD/USD pair eventually drops to the 0.6800 mark for the first time since June 2020.
200148 January 31, 2022 22:02 Forexlive Latest News Market News
Headlines:
Markets:
It’s been a morning of digesting hawkish repricing with seemingly everyone on the Street looking to up their calls for BoE, ECB and Fed rate hikes. As such, 10yr yields are up everywhere (see below).
German inflation came in lower than the previous reading, with some happy to call the top as in, though it must be noted that it beat market estimates.
Geopolitically, there has been little change on the Russia/Ukrainian front.
In the UK, Boris Johnson will be in front of MPs in the House of Commons at 15:30 GMT to discuss the Sue Gray Report on the parties at Number 10 during the lockdown. We aren’t expecting to learn much, and even if we did, it’s very unlikely to impact GBP.
So far, and I’m at risk of a monster ‘Commentator’s Curse’ here, markets haven’t shown signs of a repeat of last week’s erratic behaviour.
10-Yr Yields:
Full Article200147 January 31, 2022 22:02 FXStreet Market News
The Norwegian krone has been supported by higher petroleum prices through the latest market turbulence. Economists at Nordea see EUR/NOK trading in a range around 10.00 and USD/NOK slightly above 9.00 this year, however, with significant volatility.
“As long as oil and gas prices remain elevated, the NOK will continue to benefit from high oil and gas prices and high purchases of NOK from oil companies to cover taxes paid in NOK.”
“Any negative impact on the NOK will be dampened by Norges Bank hiking the key rate to 1.5% this year – making it more expensive to bet against the NOK.”
“We see EUR/NOK trading around 10.00 – however with significant volatility.”
“We see USD/NOK slightly above 9.00 this year. The pair has potential on the upside as we continue to believe that higher US rates will drive the USD stronger.”
Full Article200146 January 31, 2022 22:02 FXStreet Market News
A barrage of Eurozone GDP and inflation data has done little ot shift the dial for EUR/GBP thus far on the session, with the pair just about squeezing out a fresh 23-month low earlier in the session just under 0.8305. The pair has since rebounded to trade around the 0.8330 mark, up a modest 0.1% on the day, as euro traders mull what the latest Eurozone data will mean for the ECB and sterling traders await a statement from the PM on the Sue Gray report. Regarding the latter, “partygate” as it has been coined (referring to multiple accusations of lockdown breaches in Downing Street over the past years), while fuelling rampant speculation that UK PM Boris Johnson might be ousted, has not impacted sterling yet.
The latest batch of Eurozone data, meanwhile, confirmed a robust 2021 GDP growth rate of 4.6% (a tad under the expected 4.7%). According to flash estimates, the headline YoY HICP inflation rates in both Spain and Germany fell in January (though not quite as much as expected). Investors do not seem to have interpreted the data as changing much from the perspective of the ECB. The central bank is issuing its latest monetary policy announcement on Thursday, an event ahead of which euro traders are likely to keep their powder dry/refrain from placing any big bets.
The same can be said for sterling traders ahead of the upcoming BoE rate decision, also on Thursday. That suggests trading conditions for the pair is likely to be rangebound in the coming days. The ECB announcement is not expected to yield any policy/policy guidance changes, thus will likely not be too much of a market mover. The same cannot be said for the BoE, who are expected to implement a 25bps rate hike (to 0.5%) and kick off quantitative tightening by ending balance sheet reinvestments.
Sterling will likely be most sensitive to guidance on the future of the rate path, with money markets currently pricing a terminal BoE rate of around 1.25%. The consensus amongst analysts is that as the BoE brings expected monetary tightening into reality, thus widening the BoE/ECB policy divergence, this will likely keep EUR/GBP under pressure. Medium-term bears continue to target a test of the late-2019/early-2020 lows in the 0.8280 area.
Full Article200145 January 31, 2022 21:49 FXStreet Market News
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200144 January 31, 2022 21:45 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
200143 January 31, 2022 21:45 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
200142 January 31, 2022 21:40 FXStreet Market News
Germany’s Harmonized Index of Consumer Prices (HICP), which is the ECB’s preferred gauge of inflation, fell to 5.1% YoY in January from 5.7% in December, above consensus forecasts for a 4.7% reading, according to a preliminary estimate published by Destatist. The MoM change in HICP was 0.9%, well above consensus forecasts for a 0.4% decline in January and an unexpected acceleration from the 0.3% MoM gain in December.
Meanwhile, the headline Consumer Price Index (CPI) rose at an annual pace of 4.9% in January, down from December’s 5.3% reading, but well above the 4.3% consensus forecast. As with the HICP measure, the MoM change in CPI saw an unexpected rise in January, gaining 0.4% versus consensus expectations for a 0.3% decline, marking a slight deceleration from December’s 0.5% MoM gain.
The euro has not reacted to the latest German inflation figures, which, though stronger than expected, confirmed a drop-off in the YoY rate of inflation that the ECB had been predicting. Some will argue this data plus the Spanish data earlier in the session will strengthen the ECB’s conviction that inflation in the Eurozone is “transitory” and not worthy of responding to with tighter policy.
Full Article