The British monthly GDP is announced on Friday at 09:00 MT time.
Daily News: the USD up, other currencies down
- The US dollar index managed to break the psychological level at $95. Up to now, it has been moving to the next resistance at $95.50. Today traders will look at building permits, housing starts data and the testimony of the Fed’s Chairman Mr. Powell. If the economic data are optimistic and Mr. Powell gives positive clues on the future monetary policy, the index will be able to close above $95.50. Otherwise, it will return to $95.
- The USD goes up, other currencies go down as they don’t have strong support to appreciate against the strengthening USD.
- EUR/USD has been trading below the pivot point (1.1695). The only important economic indicator today is the final CPI (12:00 MT time). The actual data was the same as the forecast, so the euro didn’t get support. The support level lies at 1.16.
Something important for the euro. The EU and Japan signed a trade agreement. Japan will remove tariffs on 94% of all imports from the EU. At the same time, the European Union will lift tariffs on 99% of imports from Japan. Great opportunities for both parties!
- The pound goes down against the USD because of the weak economic data and the strong USD. CPI, PPI input and RPI data were weaker than anticipated. As a result, the pair has broken the support at 1.31 (100-week MA) and has been moving to the next one at 1.2970. No more important economic data will be released today. The further direction will depend on the strength of the USD. If the USD rises further, GBP/USD reaches the support at 1.2970. If the USD’s growth slows down, the pair will have chances to return to 1.31.
- Traders are waiting for the oil data. The crude oil inventories figure will be out at 17:30 MT time. According to the forecast, there will be a decline in the number of inventories but it is less than the previous one. If the actual data shows a greater decline than the forecast shows, the oil market will appreciate. Otherwise, oil will keep falling.
Brent is under $71.80. However, the trading is not extensive. Positive news on the oil data will pull Brent above $71.80. Resistances lie at $73.25 (100-day MA) and $75.65. Otherwise, risks of the fall to $68.80 will increase.
WTI has been trading within $67.10-68.30. Positive data will pull WTI above $68.30. Resistances are at $69.50 and $71.50. Otherwise, the oil benchmark will fall to $66. The further support is at $62.90.
- Bitcoin has been moving up. On Tuesday, the cryptocurrency shocked the market with a significant surge. It managed to break the resistance at $7,000. The positive news might become the major driver for Bitcoin. Coinbase got a permission to work with tokens that can be recognized as securities. The South Korean cryptocurrency exchange Coinrail continued working after the hacking. The Japanese company SBI Holdings launched a service for all local traders and investors from 20 to 70. The platform offers Bitcoin, Ripple and Bitcoin Cash trading.
Up to now, Bitcoin has been moving to the next psychological level at $7,500 (100-day MA). However, it needs stronger support to test this level. Otherwise, the price will turn around to $7,000.
That’s all for today! Follow market news with FBS!
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.
The US unemployment claims are out on Thursday at 15:30 MT time.
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.