Bearish market on Thursday

Bearish market on Thursday

Latest news

  • Fed has held the first meeting this year, where it leaves both rates and QE pace unchanged. The bank takes a wait and see approach, while the debt is mounting. Analysts believe that no changes from Fed may be understood as an indirect light-tapering scenario. Higher real rates could be unveiled already in the next quarters.
  • Elsewhere, Fed’s Powell said that the US economy was still far away from full recovery during his press conference. 
  • Nasdaq plunged as the earnings of Tesla came out worse than the estimates. Apple and Facebook published better-than-expected results, but still, it wasn't enough to satisfy investors. Facebook warned of “significant uncertainty” in 2021. 
  • The EU has failed to resolve its problem with vaccine delays. Germany lowered its 2021 economic growth projections. The UK involved stricter restrictions to contain the virus spread. 

Technical outlook

EUR/USD is falling towards 1.2050 as was predicted by TD Securities. It has just crossed the support of 1.2100, therefore there are no obstacles for the price to dip further. The pair is unlikely to break through 1.2050 on the first try, so we should expect the pullback initially. If it finally manages to break this support, the way down to the key psychological mark of 1.2000 will be clear. Resistance levels are 1.2130 and 1.2170. 

EURUSDH4.png

GBP/USD has approached the support of 1.3650, which it has failed to cross several times this month. Therefore, we would expect the pair will pull back to the upside rather than break out it. However, if bears are strong enough to press the price below 1.3650, the doors towards the key psychological mark of 1.3600 will be open. 

GBPUSDH4.png

AUD/USD has finally escaped the symmetrical triangle it has been trading inside since December. If bears are strong enough, they may break the support of 0.7600 and drag the price to the low of December 28 at 0.7570. Resistance levels are at the 200-period MA of 0.7665 and yesterday’s high of 0.7750. 

AUDUSDH4.png

USD/CAD has just broken through the resistance of 1.2830, clearing the way up to the psychological level of 1.2900. The move above it will drive the price further up to 1.2950, the high of December 21. Support levels are 1.2775 and 1.2700.  

USDCADDaily.png

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The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

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On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Latest news

Increased Volatility is Coming
Increased Volatility is Coming

The Reserve Bank of Australia (RBA) will make a statement and release a Cash Rate on February 7, 05:30 GMT+2. It's among the primary tools the RBA uses to communicate with investors about monetary policy.

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

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