2024-01-22 11:00

FTSE 100, DAX 40, S&P 500 Analysis and Charts FTSE 100 struggles to recover The FTSE 100, which last week fell to a six-week low at 7,403 on pared-back rate cut expectations, is having difficulties in regaining recently lost ground and so far hasn’t managed to overcome the 7,500 mark on a daily chart closing basis. Above Friday’s 7,523 high beckon the mid-November and early December highs at 7,535 to 7,543 but together with the 55- and 200-day simple moving averages (SMA) at 7,561 to 7,564 might prove difficult to break through. Minor support below Monday’s 7,476 low lies at the 5 December 7,459 low ahead of last week’s 7,403 trough. FTSE 100 Daily Chart See how daily and weekly IG client sentiment can affect price action: DAX 40 on track for third straight day of gains The DAX 40 index is in the process of breaking through its January resistance line at 16,670 with the 8 January high at 16,785 and the more significant 11 and 15 January highs at 16,792 to 16,841 representing upside targets. Minor support below Monday’s 16,638 low can be spotted around Wednesday’s high and the lows from a couple of weeks ago at 16,543 to 16,517. Further down lie the early January and last week’s low at 16,444 to 16,344. DAX 40 Daily Chart S&P 500 trades in new all-time record high The S&P 500 last week rallied to a new all-time record high amid stronger-than-expected University of Michigan consumer sentiment which saw its highest reading since July 2021. The psychological 5,000 mark is thus in focus and may be reached over the coming weeks and months. Support sits at Monday’s 4,848 to 4,844 price gap and also at the index’s January 2022 previous record high at 4,817. S&P 500 Daily Chart https://www.dailyfx.com/news/ftse-100-struggles-while-dax-40-rises-and-s-p-500-trades-at-record-highs-20240122.html

2024-01-22 09:33

AUD/USD News and Analysis Chinese benchmark rates unchanged – AUD lower AUD/USD lifts on generally positive risk sentiment after S&P 500 soared on Friday AUD/USD longer-term downtrend slowing – plenty of tier 1 US data to keep markets engaged Take a look at our Q1 Australian Dollar forecast bellow: Chinese Benchmark Rates Unchanged – AUD Lower Chinese officials kept lending rates unchanged on Monday, leaving the one year and five year loan prime rate (LPR) at 3.45% and 4.2% - in line with expectations. Markets continue to opine for further accommodation which was evident after last week’s medium-term lending facility (MLF) rate was left unchanged, sending markets lower. On the back of the decision to leave Chinese benchmark rates on hold, AUD/USD trended lower as can be seen on the 5-minute chart below. The Australian economy and currency is impacted by developments in China due to its close trading ties to the Asian powerhouse which also happens to be the second largest economy in the world. AUD/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow AUD/USD Pullback Possible on Generally Positive Risk Sentiment (S&P 500) The AUD/USD recovery is off to a slow start on Monday, in fact the pair is slightly down on the day at 09:00 GMT. The 0.6580 level offers immediate support and it coincides with the 200 simple moving average (SMA). Respecting this level on an intra-day time frame, sets up a continuation of the recent lift in the pair- boosted by a surge in the S&P 500 late last week. Mega-cap tech earnings are due for release this week with Netflix on Tuesday and Tesla on Thursday which could provide a further boost to sentiment. One thing to always be aware of is any forward guidance issued at these announcements, including any challenging conditions around the EV market amid increased competition in the space and economic headwinds as the global outlook remains suppressed. However, keep an eye on the MACD, negative momentum is yet to reverse and could re-engage if 0.6580 fails to hold. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow The weekly chart has AUD/USD within a medium-term downtrend, however,, lower prices were repelled at 0.6522. With a lot of US centered data due this week it appears the Aussie dollar will be at the mercy of the dollar – likely to respond to short-term volatility. AUD/USD Weekly Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/modest-start-to-the-week-for-aud-pboc-maintains-benchmark-rate-20240122.html

2024-01-21 18:00

Global Market Outlook - W/C January 22nd Markets to Watch Next Week as Central Bankers Have Their Say US equities are running ever higher with the S&P 500 and the Dow Jones posting fresh all-time highs on Friday. A strong in big tech stocks is behind the latest leg higher and with the Q4 earnings season already up and running, strong results from any of the ‘Magnificent Seven’ will likely see US indices rally further. The S&P 500 is dominated by these seven companies with Microsoft on its own having a 7.29% weighting in the index. S&P 500 Monthly Chart The US dollar has enjoyed a strong start to the year as US Federal Reserve Members push back against what they perceive to be excessively bullish interest rate cut expectations. US Treasury yields have backed up, underpinning the US dollar against a range of other currencies. Precious metals have been under pressure this week with gold twice testing the $2,000/oz. level. Gold and Silver Under Pressure From Pared Back Interest Rate Cut Expectations US Dollar Index Daily Chart Aside from a raft of Q4 US earnings releases next week, the economic docket is packed full of high-importance data releases and events. The Bank of Japan Quarterly Outlook Report needs to be closely monitored, especially with USD/JPY at elevated levels, while Thursday’s ECB policy decision and Friday’s US core PCE release will be next week’s main attractions. Technical and Fundamental Forecasts – w/c January 22nd British Pound Weekly Forecast: Ranges Look Set to Hold, But Watch US Data The Pound has been quite resilient to economic shocks, probably because they haven’t moved the dial on interest-rate views. Euro Weekly Forecast – Will the ECB Give Any Guidance? EUR/USD and EUR/GBP The ECB policy meeting on Thursday is the ideal place for central bank President Christine Lagarde to start to outline a rate cut timetable. Trouble is the meeting will likely follow the familiar ‘let’s wait and see the data’ script. Gold, Silver Weekly Forecast: Tempered Rate Cut Bets Pose a Headwind Gold revealed its vulnerability to further selling as a result of renewed vigor from the dollar and US yields. Fed members warn markets about overly optimistic rate cut bets. US Dollar Forecast: EUR/USD, USD/JPY, USD/CAD & AUD/USD’s Path Tied to US PCE This article examines the fundamental and technical outlook for the U.S. dollar, focusing on major FX pairs such as EUR/USD, USD/JPY, USD/CAD and AUD/USD. https://www.dailyfx.com/news/markets-week-ahead-gold-under-pressure-us-equities-rally-usd-holds-recent-highs-20240121.html

2024-01-21 06:00

US DOLLAR FORECAST – EUR/USD, USD/JPY, USD/CAD, AUD/USD The U.S. dollar has rebounded recently, boosted by a hawkish repricing of the Fed’s path relative to what was expected earlier in the year The prospect of the FOMC starting to cut borrowing costs at its March meeting have also diminished, reinforcing the greenback’s recovery This week, all eyes will be on the U.S. PCE report Most Read: US Dollar Forecast – EUR/USD, USD/CAD and AUD/USD. Where to Next? The U.S. dollar, as measured by the DXY index, has staged a remarkable turnaround recently, supported by the significant rebound in U.S. Treasury yields on the back of a hawkish repricing of the Federal Reserve’s monetary policy outlook. To provide context, as recently as last Friday Wall Street was forecasting nearly 160 basis points of interest rate cuts for the year, but these dovish expectations have since been scaled back, with markets now discounting only 124 basis points of easing for the highlighted period. 2024 FED FUNDS FUTURES CONTRACTS (IMPLIED YIELDS) Source: TradingView The prospect of the FOMC starting to lower borrowing costs at its March meeting has also diminished, falling from roughly 77% one week ago (January) to 46% today. This situation has undoubtedly contributed to the greenback's positive performance against its top peers. For a complete overview of the U.S. dollar’s technical and fundamental outlook, request your complimentary Q1 trading forecast now! Source: CME Group With U.S. economic activity growing above trend, the labor market extremely tight and progress on disinflation stalled, it would not be surprising to see traders further reduce bets on how much policymakers will cut rates in 2024, especially if incoming data doesn’t cooperate. We’ll have more clarity on the economy and consumer prices in the coming days when the U.S. Bureau of Economic Analysis unveils last month's personal income and outlays numbers. That said, traders should pay attention to two things in the report: consumer spending growth and core PCE. UPCOMING US DATA Any results above consensus estimates could indicate that the U.S. economy continues to run hot and that it would be premature to ease the policy stance. This scenario could drive Treasury yields higher, reinforcing the U.S. dollar’s bullish reversal. Conversely, subdued numbers could validate easing expectations, putting the greenback back on a depreciating path. EUR/USD TECHNICAL ANALYSIS EUR/USD retreated earlier in the week but managed to hold above its 200-day simple moving average at 1.0840. To bolster sentiment toward the euro, it is crucial for this support zone to remain intact; failure to do so could result in a pullback towards 1.0770, followed by 1.0700. On the flip side, if buying momentum returns and triggers a market turnaround, primary resistance is located in the 1.0910-1.0930 band. Sellers are expected to vigorously defend this technical ceiling; however, a successful breakout could expose the 1.1020 area. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView For a complete overview of the Japanese yen’s medium-term prospects, make sure to request the Q1 trading forecast! USD/JPY TECHNICAL ANALYSIS USD/JPY rallied earlier in the week, but its upward momentum diminished as the weekend approached when prices failed to clear resistance near 149.00, which resulted in a modest retracement from those levels. That said, if losses intensify in the upcoming days, support appears at 147.40, followed by 146.00. On the flip side, if bulls regain market control and propel the pair above 149.00, there’s potential for a rally towards the psychological 150.00 mark. If historical patterns serve as a guide, USD/JPY could be rejected from this area on a retest; however, a breakout could set the stage for a move toward 150.90. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView USD/CAD TECHNICAL ANALYSIS USD/CAD showed strong performance early in the week but took a sharp turn to the downside, losing its 200-day simple moving average heading into the weekend. This pullback followed an unsuccessful attempt to overtake trendline resistance and a key Fibonacci level near 1.3540. If the bearish reversal gains momentum in the trading sessions ahead, initial support is expected at 1.3385, followed by 1.3355. On the other hand, if bulls stage a comeback and drive the pair higher, resistance is seen at 1.3480. With further strength, attention will be on 1.3510. USD/CAD TECHNICAL CHART USD/CAD Chart Created Using TradingView Curious about what lies ahead for the Australian dollar? Find comprehensive answers in our quarterly trading forecast. Claim your free copy now! AUD/USD TECHNICAL ANALYSIS AUD/USD lost ground from late December through early this week, but has bounced off technical support at 0.6525, allowing prices to push past a key ceiling ranging from 0.6570 to 0.6580. Should the recovery gather strength in the coming sessions, initial resistance lies at 0.6650, followed by 0.6700. Conversely, if sellers reappear and drive the pair below 0.6580/0.6570, the next area likely to offer technical support appears at 0.6525, which corresponds to the 100-day simple moving average. On further weakness, the focus will be on 0.6500, the 61.8% Fib retracement of the October/December rally. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-forecast-eur-usd-usd-jpy-usd-cad-aud-usd-s-path-tied-to-us-pce-20240121.html

2024-01-19 16:35

Unlock exclusive insights and customized strategies for EUR/USD by requesting the comprehensive trading guide for the euro! EUR/USD TECHNICAL ANALYSIS EUR/USD lacked directional conviction on Friday, holding above its 200-day simple moving average at 1.0840. To boost sentiment towards the euro, this floor must remain intact, as a breach may lead to a decline towards 1.0770. If weakness persists, all eyes will be on 1.0700 handle. Conversely, if bulls orchestrate a turnaround and push prices higher, initial resistance stretches from 1.0910 to 1.0930. Sellers are likely to vigorously defend this zone on another retest; however, a successful breakout could pave the way for a rally toward 1.1020. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView Curious about the correlation between retail positioning and USD/CAD’s short-term path? Discover all the insights in our sentiment guide. Request a free copy now! USD/CAD TECHNICAL ANALYSIS USD/CAD has rallied sharply since late 2023, but its upward momentum has started to fade following an unsuccessful attempt at clearing trendline resistance and a key Fibonacci level near 1.3540, a rejection that led to a modest pullback towards the 200-day simple moving average at 1.3475. Although the short-term outlook remains constructive, prices need to stay above the 200-day SMA to preserve this bias; failure to do so could attract new sellers into the market, creating the right conditions for a pullback towards 1.3385. In case of a bullish continuation, resistance lies at 1.3540, as stated before. While buyers might have a hard time pushing the exchange rate above this area, a clean break could send the pair towards 1.3570. On further strength, there's potential for an advance towards 1.3625. USD/CAD TECHNICAL CHART USD/CAD Chart Created Using TradingView Unsure about the Australian dollar’s prospects? Gain clarity with our complimentary Q1 trading forecast! AUD/USD TECHNICAL ANALYSIS AUD/USD sank from late December through early this week, but has bounced off technical support at 0.6525. The focal point now is on whether the pair can close above the range of 0.6570-0.6580 on a weekly basis. If it does, a potential rally toward 0.6650 and subsequently 0.6700 may be on the horizon. On the flip side, should sellers reemerge and drive prices below the 100-day SMA near 0.6525, the next important area of support appears at 0.6500, which corresponds to the 61.8% Fib retracement of the October/December leg higher. Below this threshold, all attention will be on 0.6460. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-forecast-eur-usd-usd-cad-and-aud-usd-where-to-next-20240119.html

2024-01-19 13:23

Japanese Yen Prices, Charts, and Analysis Japanese inflation drifts lower in December. The Quarterly Output Report next week is key going forward. Japanese inflation cooled further in December with headline inflation falling to 2.6% from 2.8% in November, while core inflation fell to 2.3% from 2.5%, in line with market forecasts. Japanese price pressures are at their lowest level since mid-2022, but still above the 2% central bank target, and the Bank of Japan will need to see more signs of entrenched wage inflation before it considers tempering its multi-year ultra-loose monetary policy. Next week the Bank of Japan will announce its latest monetary policy decision and the central bank is expected to leave all policy levers untouched. The BoJ will also release the first Quarterly Outlook for Economic Activity and Prices Report for 2024. This report presents the BoJ's outlook for developments in economic activity and prices, assesses upside and downside risks, and outlines its views on the future course of monetary policy. This report may be key in deciding the future path of the Japanese Yen. The latest round of Fed pushback against what they perceive to be excessive US rate cut expectations have boosted the US dollar since the end of last year. The US dollar index has rallied by nearly 3% since December 28th, pushing it higher across the board. Over the same timeframe, USD/JPY has rallied from 140.28 to a current level of 148.05, a 6% move higher. USD/JPY is nearing levels where the Bank of Japan may start to ‘verbally intervene’ to try and stifle any move higher. The pair touched 150.91 on November 13th last year, just three pips off the July 2022 multi-decade high of 151.94. While the BoJ will hope that a weak Japanese Yen helps to import inflation, Japan’s trading partners will not be best pleased that their exports to Japan are being hurt by the lowly level of the Yen. The closer the USD/JPY gets to 150, the more likely that the Bank of Japan will start to talk about possible intervention. USD/JPY Daily Price Chart Retail trader data show 29.44% of traders are net-long with the ratio of traders short to long at 2.40 to 1.The number of traders net-long is 20.95% higher than yesterday and 0.40% higher from last week, while the number of traders net-short is 4.10% lower than yesterday and 12.37% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. What is your view on the Japanese Yen – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/japanese-yen-latest-boj-is-watching-the-latest-usd-jpy-rally-with-interest-20240119.html