InvestMacro

Ichimoku Cloud Analysis 10.01.2023 (GBPUSD, GOLD, USDCHF)

GBPUSD, “Great Britain Pound vs US Dollar”

The currency pair has left the borders of the descending channel. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper border of the Cloud at 1.2010 is expected, followed by growth to 1.2425. An additional signal confirming the growth will be a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1.1905, which will mean further falling to 1.1810.

XAUUSD, “Gold vs US Dollar”

The instrument is pushing off the Tenkan-Sen line. Gold is going above the Ichimoku Cloud, which suggests an uptrend. A test of the upper border of the Cloud at 1840 is expected, followed by growth to 1945. An additional signal confirming the growth will be a bounce off the lower border of the bullish channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1810, which will mean further falling to 1765.

USDCHF, “US Dollar vs Swiss Franc”

The currency pair has secured under the support level. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the Tenkan-Sen line at 0.9225 is expected, followed by falling to 0.9045. An additional signal confirming the decline will be a bounce off the lower border of the bullish channel. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 0.9350, which will mean further growth to 0.9445.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News

10 Jan

The focus today is on the banking symposium. Inflation in Tokyo set another record

By JustMarkets

The US indices traded yesterday without a single trend. Dips in healthcare and energy stocks offset gains in the high-tech sector. At the close of trading yesterday, the Dow Jones index (US30) decreased by 0.34%, while the S&P500 index (US500) lost 0.08%. The NASDAQ Technology Index (US100) gained 0.63% on Monday.

Goldman Sachs analysts believe the US economy will be more resilient to monetary tightening than other G10 economies, as not only a strong labor market but also a housing finance structure and energy self-sufficiency will help. Unlike Europe, most US households have fixed-rate mortgages that are locked in at historically low levels and are not subject to Fed rate hikes.

Neuberger’s experts believe that now is a great opportunity to buy Tesla (TSLA) stock. According to analysts, the electric carmaker’s business model remains strong, and current price levels are attractive.

The heads of the central banks of the United States, Canada, and Japan will speak at a banking symposium in Sweden today. Markets will be watching for any changes to the Fed chairman’s hawkish rhetoric, especially amid growing signs of declining inflation in the US.

At the end of this week, the US earning season begins. As usual, the season will start with the banking sector. US banking giants are forecast to report lower profits and lower next quarter forecasts.

Equity markets in Europe were mostly up yesterday. German DAX (DE30) gained 1.25%, French CAC 40 (FR40) added 0.68%, Spanish IBEX 35 (ES35) lost 0.07%, and British FTSE 100 (UK100) closed on Monday with a 0.33% gain.

Geopolitics in Europe and energy prices are likely to continue to be the focus of investors’ attention. In early 2023, Europe’s energy outlook seems more hopeful. Gas reserves in Germany are back above 90%, and Europe as a whole is at 83%. The milder weather has led to a drop in demand.

After surging prices for most of 2022 due to weather-related disruptions and supply reductions caused by political and other disruptions in Russian gas production following the invasion of Ukraine, natural gas futures suddenly collapsed in December 2022. The market reversal was caused by unusually high winter temperatures last month. But on Monday, natural gas prices rose more than 5% as the forecast for the coming week points to lower temperatures that will increase consumption. Long-term forecasts from the European (ECMWF) weather forecast model version 2 (CFSv2) hint at another potentially cold period of weather that will occur from late January into February. If this forecast materializes, it could result in the withdrawal of more than 200 BСF or more in the coming weeks.

Oil traders are betting China’s economic recovery from tough COVID policies will boost oil consumption. With current production, increased demand will drive oil prices higher. Oil fell more than 8% last week, the most significant weekly decline in months. Oil rebounded on Monday after China fully reopened its borders to international trade. Oil demand in China usually rises every year after the Lunar New Year, which this year falls at the end of January.

Asian markets rose steadily yesterday. Japan’s Nikkei 225 (JP225) gained 0.59%, China’s FTSE China A50 (CHA50) added 0.97%, Hong Kong’s Hang Seng (HK50) jumped by 1.89%, India’s NIFTY 50 (IND50) increased by 1.35%, and Australia’s S&P/ASX 200 (AU200) ended the day up 0.59%.

According to bank analysts, Japan’s GDP growth will slow in 2023 from 1.2% to 1.0% but remain above its potential level, helped by a favorable macroeconomic environment. A stronger yen and softer border controls will likely improve trade conditions, and a fiscal stimulus program will support the recovery. Nationwide inflation in Japan has not yet peaked and is likely to reach 4.0% in early 2023, but will soon slow to 2% in the second quarter. Inflation in Tokyo has reached 4%, indicating a stronger-than-expected trend in consumer prices. This is the highest value since 1982. The largest contributors to the price increase were food and energy. Inflation in Tokyo is a leading indicator of the national CPI, and its higher rate suggests that national price growth is also likely to accelerate in December. This factor could further fuel rumors that the Bank of Japan will begin to adjust its monetary policy.

S&P 500 (F) (US500) 3,892.09 −2.99 (−0.077%)

Dow Jones (US30) 33,517.65 −112.96 (−0.34%)

DAX (DE40) 14,792.83 +182.81 (+1.25%)

FTSE 100 (UK100) 7,724.94 +25.45 (+0.33%)

USD Index 103.17 -0.71 (-0.68%)

Important events for today:

– Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
– Canada BoC Gov Macklem Speaks at 12:10 (GMT+2);
– Japan BOJ Gov Kuroda Speaks at 12:10 (GMT+2);
– US Fed Chair Powell Speaks at 16:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News

10 Jan

Markets Slip On Hawkish Fed Remarks

By ForexTime

It’s a new year but the same old story with markets sensitive to Fed rate hike bets and hawkish chatter by policymakers.

Asian shares were knocked lower during early trading as investors evaluated comments from two Federal Reserve officials overnight. A sense of caution ahead of the key US inflation report on Thursday dampened the overall mood, encouraging investors to adopt a guarded approach towards riskier assets.

European futures are pointing to a lower open this morning amid the shaky risk sentiment. In the currency markets, the dollar was little changed but remains pressured by market expectations of a less hawkish Fed, despite the recent comments from Raphael Bostic and Mary Daly. Gold continues to shine, kissing levels not seen since May 2022 above $1880 while oil remains a fierce battleground for bulls and bears.

In other news, the World Bank is expected to unveil its global economic prospects report today. The international financial institution has already expressed concerns about the global economic outlook, warning of recession risk in 2023. Should the forecasts point to a global economic slowdown, another wave of risk aversion could sweep across markets as investors rush to safety.

More pain ahead for the Dollar?

Over the past few weeks, it has been the same old story for the tired dollar.

Expectations around a less hawkish Fed and subdued Treasury yields have clipped the greenback’s wings. Things are looking rough for the buck which has depreciated against almost every single G10 currency since the start of 2023. Bears remain in the vicinity despite the recent hawkish comments from Fed officials overnight with further downside on the cards if Thursday’s US inflation cools again.

According to Bloomberg, annual headline inflation for December is expected to cool to 6.5% from the prior print of 7.1%. Should expectations become reality, this will mark the sixth straight monthly decline and the lowest since October 2021. More signs of falling inflation may fuel talk around the Federal Reserve steering to a smaller rate hike at the start of next month. Alternatively, a hotter-than-expected CPI report could revive aggressive rate hike bets as investors question how slowly inflation will fall. Such a development could see the dollar rebound.

Before the key US inflation data later in the week, all eyes will be on Fed Chair Jerome Powell as he speaks during an international symposium at the Riksbank in Stockholm later today. Should the Fed Chair provide any guidance on rate hikes, this could influence the dollar.

Looking at the technicals, the DXY could be in store for more pain as the death cross technical pattern strikes. With the 50-period simple moving average (SMA) crossing down below the 200-day SMA, this signals a major trend reversal to the downside. Sustained weakness below 103.00 could encourage a decline towards 101.30.

Currency spotlight – GBPUSD

It has been a choppy affair for GBPUSD recently as prices have traded within a 200-pip range with support at 1.1900 and resistance at 1.2100. However, the recent breakout has shifted the scales of power in favour of the bulls, with further upside on the cards. Bank of England Governor Andrew Bailey will be under the spotlight this morning as he speaks at the event at the Riksbank. This could translate to pound volatility depending on his remarks. Nevertheless, pound bulls remain in some control above 1.2100 with the next key levels of interest found at 1.2230 and 1.2300.

Commodity spotlight – Gold

Gold has kicked off 2023 on a solid note, gaining 2.7% since the start of the New Year.

The precious metal continues to draw strength from a softer dollar, falling Treasury yields, and growing expectations of a less hawkish Federal Reserve. Given how last Friday’s mixed jobs report has fanned speculation around the Fed slowing its rate hikes, further upside could be on the cards. In the meantime, gold’s outlook is likely to be influenced by the upcoming US inflation report. A further cooling in prices in December and lower bond yields would be a welcome development for zero-yielding gold. Looking at the technical picture, bulls remain in a position of power with the next key level of interest found at $1900.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News

10 Jan

‘Peak opportunity’ in Q1 is when investors could be rewarded

By George Prior

Economic ‘peak opportunity’ is likely to be late Quarter 1 for most major developed economies, and when investors might be rewarded for taking the plunge, predicts the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The prediction from deVere Group’s Nigel Green comes as global investors review their portfolios with their advisers for the year ahead.

He says: “Economic ‘peak opportunity’ might come late in the first quarter.

“Until then, unemployment will be rising and there will still be aggressive language from the central banks on the need to stamp out inflation – which by then will be sharply down from current levels, especially as demand for staff is falling fast and this will help ease wage inflation, but it will still be well above the 2% target set by the central banks.

“This is, perhaps, when stocks will reach their cyclical bottom, and when investors might be rewarded for taking the plunge.”

The second quarter of the year might see risk assets start to price in a cyclical upturn in the G7 economies.

“The assets that have fallen hardest between now and then may be the strongest performers during this recovery rally, with the best performing days probably at the start,” noted Nigel Green.

“There will be cyclically-sensitive sectors, such as industrials, consumer discretionary and autos.”

What might trigger this recovery? “Probably central banks’ ending of rate hikes, and easing of rhetoric on inflation, as it slowly makes its way down to the 2% target rate in the major western economies, companies cutting back fast, together with signs of economic stabilisation.”

Investors should remain diversified, affirms the CEO of deVere. There is no ‘right way’ to approach investing, since each individual’s attitude to risk, and time horizon, differs. However, a disciplined approach to putting money into the markets, that ignores current trends, when the outlook for corporate earnings and interest rates is so opaque. Investors should remain diversified in multi-asset portfolios, that offer exposure to equities, bonds and alternative asset classes.

“Holding cash is tempting, but it suggests an ability to ‘time the market’, to invest it at an optimum point in the cycle, and this is nearly always impossible. Investors should be starting to position themselves for the cyclical upturn,” he concludes.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Opinions Stock Market News

09 Jan

EUR Is Vigorous Again

By RoboForex Analytical Department

The first week of the year was really volatile for the market major. On Monday, it recovered and secured near 1.0680.

The reason for the nervous reaction was publication of the minutes of the US Fed’s meeting. The document mentioned inadequacy of emotional conclusions based on just the Fed’s decision to fight with inflation. As a result of all this, the USD got stronger.

Next, December reports on the US labour market came out. The unemployment rate dropped to 3.5%, though no changes had been anticipated. The NFP grew to 223 thousand instead of 200 thousand expected. The average wage growth decreased to 0.3% m/m from 0.6%. All this was good, but later the ISM report was released, and it demonstrated a serious decline in December. This sent the USD down – it could not ignore the fact that the economy keeps slowing down.

On H4, EUR/USD completed a wave of decline to 1.0482. Today the market has completed an impulse of growth to 1.0635. At the moment, the market has formed a consolidation range around this level. With an escape upwards, a pathway for a wave of growth to 1.0766 opened. After the pair reaches the level, a correction to 1.0635 should begin, followed by growth to 1.0785. Technically, this scenario is confirmed by the MACD: its signal line is directed strictly upwards, which suggests the continuation of a wave of growth.

On H1, EUR/USD has formed an impulse of growth to 1.0634. The market has formed a consolidation range around it. With an escape upwards, a pathway for the wave of growth to 1.0766 opened. The goal is local. Technically, the scenario is confirmed by the Stochastic oscillator. Its signal line is above 80. After the target level is reached, a link f decline to 50 is expected.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News

09 Jan

Trade Of The Week: Gold Eyes Key US Inflation Data

By ForexTime

Gold is certainly glittering, gaining 2.3% in the first full trading week of 2023 alone.

The precious metal continues to draw ample strength from a softer dollar, falling Treasury yields, and growing expectations of a less hawkish Federal Reserve. Last Friday’s mixed US jobs report added fuel to the bullish momentum, resulting in a weekly close above resistance at $1860.

In our 2023 outlook, we discussed how gold could be one of the biggest winners in 2023 due to the shifting market dynamics and fundamental themes. Well, it looks like bulls are wasting no time in our marking their territory, pushing the precious metal to levels not seen since May 2022.

Regarding December’s jobs data, it offered conflicting signals as NFP exceeded expectations by rising 223,000k but wage growth slowed, and weekly working hours continued to fall. The slowing wage growth fuelled speculation around the Fed slowing its rate hikes – dealing a blow to the dollar which was already on the verge of a “death cross” technical pattern on the daily charts. Ultimately, this was a welcome development for zero-yielding gold.

Taking a quick peek at the technical picture, gold remains firmly bullish on the daily timeframe. The upside momentum could propel prices towards the psychological $1900 if the fundamentals remain in favour of bulls.

US Inflation report in focus

Inflation in the United States slowed for a fifth straight month to 7.1% in November, the lowest level since December 2021. Persistent signs of easing inflationary pressures in the world’s largest economy have somewhat brightened the market mood and fuelled speculation around a less hawkish Fed.

According to Bloomberg, December’s inflation data is expected to show annual inflation cooling to 6.5%. Should expectations become reality, this will mark the sixth straight monthly decline and the lowest since October 2021. Given the market sensitivity to anything relating to inflation, this could result in explosive levels of volatility across financial markets.

More signs of falling inflation may fuel talks around the Federal Reserve veering to smaller rate hikes. Currently, traders are currently pricing in a 27% probability of a 50-basis point rate hike in February. When considering gold’s zero-yielding nature, this is certainly a welcome development for the metal which could support upside gains.

Alternatively, a hotter-than-expected CPI report could revive aggressive rate hike bets as investors question whether inflation is plateauing. Such a development could see gold prices weaken as the dollar bounces back along with Treasury yields.

Other factors to watch out for…

Other than the highly anticipated US CPI report on Thursday, there are a couple of reports and Fed speeches this week that could influence gold prices.

On Monday, Atlanta Fed President Raphael Bostic will be under the spotlight. All eyes will be on Fed Chair Jerome Powell on Tuesday as he speaks during an international symposium at Riksbank in Stockholm. More Fed members are due to speak on Thursday with the US January consumer sentiment report on Friday ending the week. Should Fed members strike a hawkish note, this could weigh on gold prices. Alternatively, any whiff of caution or appearance of doves may boost gold’s allure.

Gold bulls switch into higher gear…

Gold bulls remain in a position of power with their feet pressed aggressively on the accelerator. Prices are firmly bullish on the daily timeframe with $1900 acting as the first key level of interest. A move above this level could encourage an incline towards $1920 and $1958, respectively. Should bulls run out of steam, prices may dip back below $1860 – opening the doors towards $1840, $1814, and $1800, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Metals Opinions

09 Jan

Forex Technical Analysis & Forecast for January 2023

By RoboForex.com

EURUSD, “Euro vs US Dollar”

The currency pair has completed a wave of correction to 1.0510. The market has got support there, and the wave of growth might continue to 1.0804. The goal is local. After it is reached, a link of correction to 1.0222 is not excluded. Then a new structure of growth to 1.0900 should develop.

GBPUSD, “Great Britain Pound vs US Dollar”

The currency pair completed a wave of correction to 1.1840. Upon getting support there, the market continues developing a wave of growth to 1.2320. After this level is reached, a new link of correction to 1.2220 is not excluded, followed by growth to 1.2777.

USDJPY, “US Dollar vs Japanese Yen”

The currency pair completed a wave of decline to 129.70. At the moment, the market has formed an impulse of growth to 134.76. Today it has completed a link of decline to 131.71. A consolidation range is expected to form around this level. With an escape downwards, another structure of decline to 128.73 may develop. With an escape upwards, the wave of growth might continue to 138.51.

BRENT

Crude oil has completed a wave of correction to 86.40 and a link of growth to 82.60. After this level is reached, a decline to 72.60 might follow. Then a wave of growth to 100.00 might develop, from where the wave might continue to 127.45.

XAUUSD, “Gold vs US Dollar”

Gold has corrected to 1833.30. Getting support there, the market is developing a wave of growth. The quotes might then reach 1900.00, after which a correction to 1800.00 might follow.

S&P 500

The stock index has completed an impulse of decline to 3763.0. Today the market is forming a link of correction. Growth to 3953.4 looks possible. After this level is reached, the quotes might fall to 3550.5, then grow to 3752.0, and then decline to 3344.0.

Article By RoboForex.com

Financial News Forex and Currency News

09 Jan

Ichimoku Cloud Analysis 09.01.2023 (EURUSD, BRENT, USDCAD)

By RoboForex.com

EURUSD, “Euro vs US Dollar”

The currency pair is pushing off the upper border of the descending channel. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the lower border of the Cloud at 1.0605 is expected, followed by growth to 1.0810. An additional signal confirming the growth will be a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud and securing under 1.0555, which will mean further falling to 1.0465.

BRENT

Crude oil is testing the signal lines of the indicator. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the Kijun-Sen line at 81.00 is expected, followed by falling to 72.65. An additional signal confirming the decline will be a bounce off the upper border of the descending channel. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 85.00, which will mean further growth to 90.00.

USDCAD, “US Dollar vs Canadian Dollar”

The pair has secured under the lower border of the descending channel. The instrument is going below the Ichimoku Cloud, which suggests a downtrend. A test of the broken border of the channel at 1.3430 is expected, followed by falling to 1.3255. An additional signal confirming the decline will be a bounce off the lower border of the bearish channel. The scenario can be cancelled by a breakaway of the upper border of the Cloud and securing above 1.3655, which will mean further growth to 1.3620.

Article By RoboForex.com

Financial News Forex and Currency News

09 Jan

The Analytical Overview of the Main Currency Pairs on 2023.01.09

By JustMarkets

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0516
Prev Close: 1.0644
% chg. over the last day: +1.22 %

Falling energy prices in the Eurozone (especially natural gas prices) helped weaken the overall inflation rate. On an annualized basis, the Eurozone’s overall inflation rate fell from 10.1% to 9.2%. Core inflation (which excludes food and energy prices) also fell from 5.1% to 5.0% year over year. But the detailed report indicates that price pressures in non-energy sectors are rising, especially for food. This indicates that inflation is still strong.

Trading recommendations

Support levels: 1.0650, 1.0589, 1.0535, 1.0497, 1.0480, 1.0361, 1.0332, 1.0284
Resistance levels: 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, but there are signs of overbought, so it is worth waiting for a correction to find good entry points. Under such market conditions, buy trades are best considered from the support level 1.0650 or 1.0589 with confirmation on intraday timeframes. Sell deals can be considered from the resistance level of 1.0695 but better with confirmation in the form of a reverse initiative or a false breakout

Alternative scenario: if the price breaks down through the support level of 1.0497 and fixes below it, the downtrend will likely resume.

News feed for 2023.01.09:

– German Industrial Production (m/m) at 09:00 (GMT+2);
– Eurozone Unemployment Rate (m/m) at 12:00 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1906
Prev Close: 1.2091
% chg. over the last day: +1.55 %

The non-farm report showed that the US economy added 223,000 jobs, higher than the expected 200,000. The unemployment rate fell to 3.5% from 3.7%, while average hourly earnings fell to 4.6% from a revised 4.8% decline. As the US labor market remains resilient, the Fed can expect to raise rates longer to keep inflation in check. But the dollar Index unexpectedly fell on a strong US labor market report, and this could be a “false” move, as a strong labor market, along with further rate hikes, is the foundation for a stronger dollar. Analysts still expect January and February to be strong months for the dollar and weak for the GBP.

Trading recommendations

Support levels: 1.2100, 1.2000, 1.1928, 1.1875, 1.1684, 1.1476, 1.1418
Resistance levels: 1.2193, 1.2308, 1.2431, 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bullish. The price has broken through the priority change level and is trading above the moving averages. The MACD indicator is in the positive zone, and the pressure of buyers remains. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 1.2100, but with confirmation. Sell trades are best sought from the resistance level of 1.2193 but also better with a confirmation in the form of a false breakout.

Alternative scenario: if the price breaks down through the 1.1875 support level and fixes above it, the downtrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 133.40
Prev Close: 132.08
% chg. over the last day: -0.99 %

Japanese Prime Minister Fumio Kishida said Sunday that his government and the Central Bank should discuss their relationship in guiding economic policy after he picks a new governor for the Bank of Japan (BOJ) in April. This raises the possibility that the government may reconsider its plan to work with the Central Bank and would lay the groundwork for an exit from the BOJ’s ultra-free monetary policy. Japan’s core consumer prices are at 3.7%, and analysts expect inflation to remain above the 2% target in the coming months, making a policy shift after the BOJ governor is re-elected even more likely.

Trading recommendations

Support levels: 131.12, 130.58, 129.65
Resistance levels: 132.89, 133.29, 134.45, 135.88, 137.03, 138.00, 139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is now trading below the moving averages, while the MACD indicator has become negative, indicating the sellers’ pressure inside the day. The decline now looks like a corrective wave before a new momentum. Buy trades are best considered from 131.12 or 130.58 support levels, but only with intraday confirmation. Sell deals can be searched for from the level of resistance of 132.89 under the condition of a reverse reaction or false breakout.

Alternative scenario: If the price fixes below the support level of 130.58, the downtrend will likely resume.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3565
Prev Close: 1.3443
% chg. over the last day: -0.91 %

The latest labor market data showed that Canada’s unemployment rate fell from 5.1% to 5.0%, with 627,000 more jobs in Canada now than before the pandemic. Most of the job growth came in the 4th quarter of 2022. But it should be noted that the country’s manufacturing levels are declining. Job growth with rising wages and falling production is an inflationary path for the economy. Therefore, the Bank of Canada will continue raising interest rates to “cool down” the labor market. A 0.25% rate hike is expected at the Bank of Canada’s next meeting.

Trading recommendations

Support levels: 1.3386, 1.3362, 1.3212
Resistance levels: 1.3492, 1.3513, 1.3561, 1.3594, 1.3632, 1.3700

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bearish. The price has again consolidated below the moving averages and below the key support level. The MACD indicator became negative, but it indicates a divergence when the price reached the support level. Buy trades should be considered from the support level of 1.3386, but only with short targets, as entry is against the main priority. Sell deals are best looked for on intraday time frames from the resistance level of 1.3513 or 1.3561, but with confirmation in the form of a reverse initiative on the lower timeframes or a false breakout.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3632, the uptrend will likely resume.

News feed for 2023.01.09:

– Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
– Canada Ivey PMI (m/m) at 17:00 (GMT+2).

By JustMarkets

Financial News Forex and Currency News

09 Jan

China is opening its borders. The US labor market remains solid

By JustMarkets

The US stock market ended Friday’s trading higher on the back of a dollar Index drop after key data on the US labor market. The non-farm report showed the US economy added 223,000 jobs, higher than the expected 200,000. The unemployment rate fell to 3.5% from 3.7%, while average hourly earnings fell to 4.6% from a revised decline of 4.8%. As the US labor market remains resilient, the Fed can count on further rate hikes to keep inflation in check. The dollar index unexpectedly fell on a strong US labor market report, and this could be a “false” move as a strong labor market, along with further rate hikes, is the foundation for a stronger dollar. At the close of the stock market on Friday, the Dow Jones index (US30) increased by 2.13% (+1.54% for the week), and the S&P 500 index (US500) added 2.28% (+1.72% for the week). The NASDAQ Technology Index (US100) gained 2.56% on Friday (+1.94% for the week). All three indices closed in positive territory last week.

Last week’s FOMC report showed that Fed policymakers increased the final interest rate range, and the non-farm payrolls report showed that the labor market remains resilient. Together, these 2 factors point to further interest rate hikes in the first half of 2023. A key factor will be the inflation data on January 12.

On Sunday in California, hundreds of thousands of homes and businesses were without power due to a severe storm. On Saturday, the NWS Weather Alert warned that the cumulative effect of successive heavy rains since late December could cause rivers to reach record highs and cause flooding in much of central California.

Stock markets in Europe were mostly up Friday. German DAX (DE30) gained 1.20% (+4.41% for the week), French CAC 40 (FR40) added 1.47% (+5.21% for the week), Spanish IBEX 35 (ES35) jumped by 1.00% (+4.78% for the week), British FTSE 100 (UK100) was up 0.87% (+2.49% for the week).

Falling energy prices in the Eurozone (especially natural gas prices) helped weaken the overall inflation rate. The overall inflation rate fell from 10.1% to 9.2% on an annualized basis. Core inflation (which excludes food and energy prices) also fell from 5.1% to 5.0% year over year. But the detailed report indicates that price pressures in non-energy sectors are rising, especially for food. This indicates that inflation is still strong. The next two months will be critical, as many businesses traditionally change prices early in the year.

Consequently, it is possible that core inflation will continue to rise. Consumption remains under pressure, and retail sales have been declining for quite some time, businesses continue to adjust their prices upward. The ECB has taken a very hawkish stance and is likely to keep the pace of rate hikes at 50 bp in February and March.

Asian markets traded mixed last week. Japan’s Nikkei 225 (JP225) decreased by 0.39%, China’s FTSE China A50 CHA50) was up 0.81%, Hong Kong’s Hang Seng (HK50) ended the week up 4.80%, India’s NIFTY 50 (IND50) decreased by 1.34%, and Australia’s S&P/ASX 200 (AU200) ended the week up 1.24% positive.

China on Saturday marked the first day of “Chun Yun,” the 40-day lunar New Year period. This Lunar New Year public holiday, which officially begins on January 21, will be the first since 2020 with no restrictions on domestic travel. Also, on Sunday, China will reopen its border with Hong Kong. China’s Ministry of Transportation expects more than 2 billion passengers to travel over the next 40 days. Investors hope the reopening will eventually revive the economy. Ultimately, it is likely to have an impact on oil prices. Demand for oil in China usually rises every year after the Lunar New Year. The increase in demand is a signal for rising oil prices.

In the commodities market, futures on copper (+2.97%), cotton (+2.76%), gold (+2.43%), and platinum (+1.99%) showed the biggest gains last week. Futures on natural gas (-15.96%), gasoline (-9.05%), Brent oil (-8.51%), WTI oil (-8.14%), wheat (-6.19%), sugar (-5.34%), coffee (-5.29%), corn (-3.72%) and lumber (-2.95%) showed the biggest drop.

S&P 500 (F) (US500) 3,895.08 +66.02 (+1.72%)

Dow Jones (US30) 33,630.61 +509.00 (+1.54%)

DAX (DE40) 14,610.02 +173.71 (+1.20%)

FTSE 100 (UK100) 7,699.49 +66.04 (+0.87%)

USD Index 103.91 -1.13 (-1.08%)

Important events for today:

– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
– German Industrial Production (m/m) at 09:00 (GMT+2);
– Eurozone Unemployment Rate (m/m) at 12:00 (GMT+2);
– Canada Building Permits (m/m) at 15:30 (GMT+2).

By JustMarkets

Economics & Fundamentals Financial News

Risk Disclosure: Foreign Currency trading and trading on margin carries a high level of risk and can result in loss of part or all of your investment. Due to the level of risk and market volatility, Foreign Currency trading may not be suitable for all investors and you should not invest money you cannot afford to lose. Before deciding to invest in the foreign currency exchange market you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading, and seek advice from an independent financial advisor should you have any doubts.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.