Market News


TIME
2021-01-19 11:03 GMT
Pair
EUR/USD
Summary
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
Content

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.”

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 10:47 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:47 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:40 GMT
Pair
AUD/USD
Summary
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
Content

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.”

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.7644 S2: 0.7601 S3: 0.7544 R1: 0.7743 R2: 0.7800 R3: 0.7843
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2021-01-19 10:09 GMT
Pair
USD/CHF
Summary
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
Content

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.”

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.8896 S2: 0.8883 S3: 0.8869 R1: 0.8924 R2: 0.8939 R3: 0.8952
Trend Index
Recommendation : Bullish Strength : 3
OBOS Index
OBOS Index : Neutral

TIME
2021-01-19 10:02 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:02 GMT
Pair
EUR/USD
Summary
more to come ...
Content
  • 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 expected
  • EUR/USD flirts with highs near 1.2125 on upbeat ZEW numbers.

The German ZEW headline numbers for January showed that the Economic Sentiment Index improved to 61.8 versus 60.0 expectations and 55.0 last.

While the sub-index Current Conditions figure arrived at -66.4 in Jan versus -68.5 expected and -66.5 booked previously.

Meanwhile, the Eurozone ZEW Economic Sentiment for Jan unexpectedly rose to 58.3 vs. 45.5 expected and 54.4 last.

ZEW President Professor Achim Wambach noted: “Export expectations have increased significantly.”

“Despite the uncertainty about the further course of the lockdown, the economic outlook for the German economy has improved slightly,” Wambach added.

EUR/USD reaction

EUR/USD remains strongly bid on the upbeat German and Eurozone ZEW surveys. The spot adds 0.42% on the day, flirting with daily tops near 1.2125.

Global stimulus expectations buoy the risk sentiment, downing the safe-haven US dollar. Also, markets resort to profit-taking on their long dollar positions ahead of Treasury Secretary nominee Janet Yellen’s testimony.  


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 10:01 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:00 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:00 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 10:00 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:59 GMT
Pair

Summary
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
Content
  • 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

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:49 GMT
Pair
GBP/USD
Summary
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
Content

  • 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

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.3535 S2: 1.3485 S3: 1.3449 R1: 1.3622 R2: 1.3657 R3: 1.3708
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2021-01-19 09:32 GMT
Pair
EUR/USD
Summary
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
Content

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.”


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 09:26 GMT
Pair
NZD/USD
Summary
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
Content
  • 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

fxsoriginal

Technical levels to watch

 

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.7092 S2: 0.7071 S3: 0.7046 R1: 0.7139 R2: 0.7164 R3: 0.7185
Trend Index
Recommendation : Bearish Strength : -1
OBOS Index
OBOS Index : Neutral

TIME
2021-01-19 09:24 GMT
Pair
EUR/USD
Summary
The European Commission has warned some preliminary national plans to spend the covid recovery money lack detail and need to be improved, Reuters repo
Content

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.”

This comes after Bloomberg reported earlier today that the Commission is set to unveil a blueprint, which will outline how the European Union (EU) can strengthen the internationalization role of the euro and thereby reduce the dollar’s dominance.

Market reaction

EUR/USD was last seen trading at 1.2110, adding 0.30% on the day. The spot hit a daily high of 1.2119 and a day’s low at 1.2074.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 09:09 GMT
Pair

Summary
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 (
Content

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

Products led fall in stocks, with OECD industry crude stocks only 48.9 million (mln) barrels below may peak.

OECD crude oil stocks in November fell by 23.6 mln barrels to 3.108 bln barrels, were 167 mln barrels above five-year average.

Global refinery throughput expected to rebound by 4.5 mln bpd in 2021.

There may be scope for higher supply growth given expected H2 2021 demand improvement.

Oil demand fell by 8.8 million bpd in 2020.

Global oil supply set to rise by more than 1 mln bpd in 2021 after falling by 6.6 mln bpd in 2020.

Demand recovery to reflect stimulus packages and steps to resolve pandemic.

Global oil demand is expected to recover by 5.5 mln bpd to 96.6 mln bpd in 2021.

Global vaccine roll-out is putting fundamentals on a stronger trajectory for the year.

Resurgence in COVID-19 cases is slowing oil demand rebound.

WTI off the highs

On the downward revision to the global oil demand estimate for Q1 2021, WTI eased off daily highs of $52.70. The US oil erases gains to trade flat around $52.45, as of writing.  

Despite the pullback, the black gold remains buoyed by the prospects of fiscal stimulus-driven global economic recovery. Stronger Chinese demand for oil and the US dollar’s pullback also remains oil-supportive. Focus shifts to Yellen’s speech for more hints on the US fiscal stimulus.


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:06 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:04 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:04 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:01 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 09:00 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 08:51 GMT
Pair
EUR/GBP
Summary
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
Content
  • 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

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.8872 S2: 0.8854 S3: 0.8827 R1: 0.8916 R2: 0.8942 R3: 0.8960
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 08:38 GMT
Pair
EUR/USD
Summary
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
Content

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.

The meeting between Merkel and state leaders is due later this Tuesday, initially scheduled for 25 January.

The German government spokesman Steffen Seibert said:  "The reason is the mutation of the virus that has appeared.”

Note that the current restrictions are in place until January 31.

Market reaction

EUR/USD extends gains above 1.2100, as the euro ignores the lockdown headlines. Broad-based US dollar retreat remains the main driver behind the major’s bounce. Focus remains on the German ZEW and Yellen’s testimony.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 08:33 GMT
Pair

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

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.”

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 08:30 GMT
Pair

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

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 08:28 GMT
Pair
EUR/USD
Summary
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
Content

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.”


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2058 S2: 1.2039 S3: 1.2024 R1: 1.2091 R2: 1.2106 R3: 1.2125
Trend Index
Recommendation : StronglyBearish Strength : -5
OBOS Index
OBOS Index : Oversold

TIME
2021-01-19 08:18 GMT
Pair
USD/CAD
Summary
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
Content
  • 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

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2715 S2: 1.2684 S3: 1.2642 R1: 1.2788 R2: 1.2830 R3: 1.2861
Trend Index
Recommendation : Bearish Strength : -3
OBOS Index
OBOS Index : Neutral

TIME
2021-01-19 08:13 GMT
Pair

Summary
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
Content

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.”

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2021-01-19 08:03 GMT
Pair

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

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.”

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

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