For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for January 21
The key issue for the market is connected with the trade talks between the US and China. The news about the future trade negotiations between the two sides at the end of January in the US was appreciated by the market. However, traders are still sensitive to the updates on the discussion, as one of the main topics connected with intellectual property remains unsolved.
Let’s look at the key levels for today’s trading.
As we can see, the US dollar has risen against the Japanese yen since the last Tuesday. The news on the lack of progress on the intellectual property issues during the Asian trading session pulled the pair lower. Despite that, according to parabolic SAR, the trend for the pair remains bullish. On the H4 chart, the pair has been trading with low volatility. If the USD strengthens, USD/JPY will rise to the resistance at 109.860. The next resistance is placed at 110.45. If the bearish pressure increases, the pair will fall to the support at 109.43. The next support lies at 109.214.
Let’s look at the key levels for gold. The yellow metal has been trading sideways since the beginning of the year. The news on the trade outcome pulled its price lower on Friday. However, today’s uncertainties around the intellectual property have pushed the price higher. On the H4, we can see that gold has been making small gains towards the resistance at $1,283. If it’s broken, the next resistance lies at $1285. If the price for gold goes down on increased risk-on sentiment, it will likely test the support at $1280. The next support lies at $1278.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
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