Market Crash Incoming?
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.
Markets ahead Fed’s meeting
Latest news
- The Fed will hold its first meeting this year on Wednesday at 21:00 MT time. No major changes are expected as the Fed doesn’t want to repeat the taper tantrum of 2013, which refers to collective reactionary panic that triggered a spike in US Treasury yields. To get ready, we highly recommend you to read our short article: “What does the first Fed meeting of 2021 have for the USD?”
- Nasdaq climbed up due to the ongoing earnings season. Microsoft reported better-than-expected earnings and set a fresh record. Today Apple, Facebook, and Tesla will publish their earnings reports after the market closing. Check earnings calendar
- Australia’s consumer price index of 0.9% exceeded the market expectations of 0.7%. The AUD modestly reacted.
- Crude oil modestly advanced higher, while gold started the say on the back foot.
Technical analysis
EUR/USD
The most traded pair is trading sideways without any clear direction. The FOMC meeting this evening will set a fresh vector. If the pair manages to break above the 200-period moving average at 1.2190, the way up to the next resistance level at 1.2220 will be open. On the flip side, the move below yesterday’s low of 1.2130 will drive the pair down to the low of January 20 at 1.2100.
GBP/USD
The pound has approached the upper line of the Bollinger Bands indicator at 1.3740. Therefore, we can expect the pullback to the downside as the pair shouldn’t break 1.3740 on the first try. Support levels are at the recent lows of 1.3650 and 1.3600.
USD/JPY
USD/JPY is trading inside a descending channel. Since the upside is limited by the 50-period moving average and the upper trend line, we should expect further falling. The breakout below the low of January 21 at 103.35 will drive the pair lower to the key psychological mark of 103.00.
AUD/USD
Finally, let’s talk about the aussie. AUD/USD is trading inside the symmetrical triangle. Since the market sentiment is risk-off, the pair is going to dip in the near term. The move below the 100-period moving average of 0.7730 will drive the pair to the next support of 0.7710.
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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.
Investor Positivity May Fade After Powell's Speech and CPI Release
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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Crucial News For The Following Week
Consumer Price Index, Existing Home Sales, US Fed rate decision - all of these things we will discuss in our new review. Don't miss it out!
Focus on Banks' Meeting and NFP
The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.
