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.
Daily News: mixed moves
- The US dollar index has fallen to two-week lows on EU-US talks. On Wednesday, the US President met with the President of the European Commission to discuss trade issues. According to results of the meeting, the EU will increase imports of US soybeans and natural gas; both parties are going to lower trade barriers; the EU hopes the US will lift steel tariffs.
The risk slowed down, the USD fell as a safe-haven currency.
Earlier the index has reached the low at $94.09. Up to now, it has been trying to recover but without positive economic data, it will be difficult to do. Core durable goods orders data will be out at 15:30 MT time. The forecast is encouraging. If the actual data is greater than the forecast, the index will have chances to recover. The resistance is at $94.50. Otherwise, there are risks of the fall to $94.
- It’s an important day for the euro. The ECB will release that interest rate at 14:45 MT time. Also, no changes in the rate are anticipated, the ECB President may give clues on the future monetary policy. If he sounds optimistic, the euro will go up. If he is more cautious because of the trade wars tensions, the euro will suffer.
Up to now, the direction of EUR/USD is uncertain. The ECB statement may pull the pair to the resistance at 1.1785 or down to the support at 1.1680. Let’s follow the meeting.
- The USD appreciates against almost all currencies except the Japanese yen. USD/JPY has tested the 50-day MA near 110.50. If the USD is weak, there will be risks of the fall below the 50-day MA. The next support will lie at 110.10. Otherwise, the pair has chances to stick near 110.50.
- Oil benchmarks were pulled up by the positive economic data. On Wednesday, crude oil inventories figure showed a decline. Today Saudi Arabia closed crude shipments through a strategic Red Sea shipping lane. It means a decline in supply. This news is anticipated to support the Brent oil benchmark.
Up to now, Brent has been moving up. However, the trading isn’t extensive despite news from Saudi Arabia. If the market takes the news into consideration, Brent will be able to reach the resistance at $75.15. Otherwise, the fall to 100-day MA ($73.70) is anticipated.
WTI got a boost from the economic data as well and managed to leave the $67.25-69 channel. However, up to now, it has been moving down again. On H4, 200-hour MA puts pressure on the price. The support is at $69. However, chances of the rise still exist. In the case of positive news, the resistance will be at $70.55.
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.