
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.
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations. However, there is still a chance that the deal may be reached as Boris Johnson will have a meeting in Brussels today with European Commission President Ursula von der Leyen. After this news, GBP/USD surged. That’s why it’s really important to follow Brexit news today for every trader. Some positive developments towards the Brexit agreement will drive the pound up, whereas negative ones will push it down. Let’s look at the chart.
GBP/USD has managed to regain some yesterday’s losses. However, it failed to cross the key resistance of 1.3400 on its way up. If it manages to break it, it will rise to yesterday’s high of 1.3435. On the flip side, the move below the support of 1.3300 will open doors towards yesterday’s low of 1.3265.
Moving on to the US news, Trump’s administration imposed sanctions on Chinese officials over the Hong Kong issue. Since the virus cases are steadily rising and Friday’s NFP is downbeat, investors are increasingly looking for the US stimulus package. Hopes for a relief package and the overall cautious sentiment on the market drove gold higher. It has jumped slightly above the 50% Fibonacci retracement level but still has struggled to break the 200-period moving average of $1 870. The move above it will drive gold to the 61.8% FIbo level of $1 890. Support levels are $1 840 and $1 825.
EUR/USD is edging higher. If it jumps above the 50-hour moving average of 1.2135, the way up to yesterday’s high of 1.2155 will be clear. In the opposite scenario, If it drops below the support of 1.2100, it may drop to yesterday’s low of 1.2095.
Japan’s Prime Minister unveiled the stimulus package of 708 billion. Besides, Japan published the better-than-expected GDP today. USD/JPY is trading sideways at 104.00. The US dollar is really weak these days, that’s why we can assume that investors will favor the JPY amid the current cautious sentiment. The move below yesterday’s low of 103.90 will drive the pair to the next support of 103.70. Resistance levels are 104.20 and 104.40.
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.
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