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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The ECB statement and US unemployment claims will be out today. How the market will react?
- The FDA will meet to discuss the vaccine of Pfizer and BionTEch. If it approves the vaccine, the widespread distribution will start in 24 hours. The market sentiment will immediately improve and riskier currencies (AUD, NZD) and stock indices (S&P 500, Nasdaq) will surge.
- The EU and the UK have failed to reach the Brexit deal so far. Talks will continue further, signaling that both sides still want to make an agreement. Today the EU Economic Summit will be held during the day, that’s why we can expect some news from the Brexit front. The GBP will be sensitive to any Brexit developments.
- ECB will make a monetary policy and rate statement at 14:45 MT time. Societe Generale forecasts the ECB will extend its bond-buying program by extra 600 billion euros. Indeed, the ECB may try to push the EUR down as the central bank isn’t satisfied with the increased euro.
- Follow us unemployment claims today at 15:30 MT time. If the actual numbers are better than the forecast of 725 000, the USD will rise. Otherwise – drop.
The 50-period moving average has stopped EUR/USD from further falling. If the pair manages to break the resistance of 1.2100, the way up to yesterday’s high of 1.2135 and the upper trendline will be open. On the flip side, if it falls below the support of 1.2075, it may drop to the low of December 2 at 1.2050.
XAU/USD is trading sideways near the 38.2% Fibonacci retracement level of $1 840. If it manages to break through it, the way up to the 50% Fibo level of $1 865 will be open. In the opposite scenario, if it drops below yesterday’s low of $1 825, it may fall to the next support of $1 810.
The pair is moving in the ascending channel, driven by vaccine hopes. Support levels of the recent lows at 1.3300 and 1.3265 should constrain the pair from further falling. If it jumps above the resistance of 1.3400, it may rise to yesterday’s high of 1.3460. Follow Brexit news!
The aussie is edging higher, supported by the 50-period moving average. If it closes above the resistance of 0.7500, the doors will be open towards the next resistance of 0.7550. On the flip side, if it falls to the 50-period moving average of 0.7400, it’s likely to pull back and turn to the upside.
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.
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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.
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.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.