The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
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- There is no important economic data for the USD, as a result, the index has been moving further down. Up to now, it has been coming to the psychological level at $95. As no important economic data will be released today, there are risks of the further fall below $95. The next support is at $94.50.
- The Canadian dollar is nearly the only one currency that isn’t taking an advantage of the USD depreciation.
Tensions between Saudi Arabia and Canada put pressure on the CAD. The conflict happened because of the arrest of activists for civil rights in Saudi Arabia. As a result, Saudi Arabia frozen trade relationship with Canada, Saudi Arabia expelled the Canadian Ambassador, moreover, Saudi Arabian airlines canceled all flights to Toronto.
The conflict has been escalating since Monday. As a result, the loonie has been suffering depreciation since then. USD/CAD has broken above the pivot point at 1.3017 and has tested the resistance at 1.3067. The resistance is strong. In case of news on the conflict’s escalation, the pair will be able to break the resistance. Otherwise, it will keep trading near it.
- The New Zealand dollar is appreciating because of the weak USD and not bad inflation expectations data (2.0% vs 2.0% previous). NZD/USD is trading near 0.6750. The resistance is at 0.6785. The kiwi needs a great boost to reach the resistance. However, no more data will be out today. Tomorrow the central bank will release the interest rate. However, according to forecasts, the effect of the meeting will be neutral. As a result, only a great plunge of the USD will pull the pair to the resistance. The trading within 0.6719-0.66785 is anticipated.
- The Australian dollar has been taking advantage of the weak USD. The Governor of the Reserve Bank of Australia gave a speech early in the morning. No significant changes in the speech. As before, the board doesn’t see a strong case for the near-term rate move. However, AUD/USD has been moving up. The pair opened above the trendline at 0.7420 and has been moving to the resistance at 0.7442 (50-day MA). The resistance is strong, so to break it, the aussie needs strong support. The further weakening of the USD will pull the pair up. Otherwise, it will return to the support at 0.7420.
- The oil market is waiting for the crude oil inventories data that will be out at 17:30 MT time. The forecast is positive for oil prices as the deficit in the number of inventories is anticipated. Therefore, if the actual data shows a greater decline in the number of inventories, prices will go up.
Brent has been trading near $74.65. The 100-day MA is a good support for it, but the data should be encouraging as well. A decline in the data will pull the Brent prices up to $75.15 (50-day MA). The next resistance is at $76.90. If the data isn’t encouraging, the prices will go to the pivot point at $73.50.
The WTI trading is uncertain. Traders are waiting for the data/ Encouraging figures will pull the prices up to $70.34. Otherwise, they will fall to the pivot point at $68.65 (50-day MA) and then to $68.20 (100-day MA).
That’s all for today! Follow market news with FBS!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.