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.
Hit from hedge fund & other news on Monday
- Oil plunged after the ship blocking the Suez Canal was partially re-floated. Nearly 300 vessels are waiting to pass through the canal, which equals 12% of global trade. Thus, the waterway could reopen soon.
- Market participants await an OPEC meeting this week, as its members will decide whether to prolong output cuts further or start increasing oil output.
- Investors were shocked by the fact that a $20 billion wave of block trades hit markets on Friday, reportedly linked to investment fund Archegos Capital. Block trades mean the sale of a large portion of the stock at a price discussed outside of the market. It is not something new, but the size of these trades hitting the market during the normal trading hours is indeed unusual. That raised worries about volatile trading in the coming days.
- ViacomCBS and Discovery dropped by 27% each on Friday, while Baidu and Tencent Music plunged during the week, dropping as much as 33.5% and 48.5%, respectively, from Tuesday closing levels. Despite all fears, it had a small impact on broader markets. Both Nasdaq and S&P 500 jumped over 1% on Friday even amid sharp sell-off in Viacom and other stocks.
EUR/USD has been moving down since the start of this year. If it manages to break the support of 1.1750, the way down to the psychological mark of 1.1700 will be clear. In the opposite scenario, the move above Friday’s high of 1.8000 will drive the pair to the 200-day moving average of 1.1865.
GBP/USD has been rising since Thursday, but still inside a descending channel. If it manages to break the 50-day moving average of 1.3840, the way up to 1.3900 will be clear. On the flip side, if it falls below Thursday’s low of 1.3680, it will open doors towards the 100-day MA at 1.3620.
USD/JPY has retraced to the support of 109.50. If bulls keep momentum and the pair jumps above the intraday high of 109.80, the way up to the key psychological mark of 110.00 will be clear. In the opposite scenario, if it drops below 109.50, the way down to the 50-period MA of 109.00 will be clear.
Finally, let’s discuss crude oil on the example of UK Brent oil or XBR/USD. It’s trying to recover its recent losses. If it jumps above the 200-period of $64.70, the way up to the 100-period MA of $66.00 will be clear. Support levels are at the recent lows of $63.00 and $62.20.
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.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
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.