Nonetheless searching for USD trades for the FOMC occasion?
We’re taking a more in-depth have a look at USD/CAD’s potential short-term resistance at present!
Earlier than shifting on, ICYMI, yesterday’s watchlist checked out AUD/USD’s short-term development line assist forward of Australia’s quarterly CPI report. You’ll want to try if it’s nonetheless a great play!
And now for the headlines that rocked the markets within the final buying and selling periods:
Recent Market Headlines & Financial Knowledge:
BOJ’s January Opinions Abstract confirmed talks about exiting straightforward insurance policies, with one member saying that “situations for coverage revision, together with the termination of the adverse rate of interest coverage, are being met” and one other noting that “Now could be a golden alternative” to make the most of the opposite central banks’ coverage shifts
Japan’s preliminary industrial manufacturing in December: 1.8% m/m (2.5% forecast, -0.9% earlier)
Japan’s retail gross sales dropped by 2.9% m/m in December, weaker than -0.2% estimates and offsetting November’s 1.1% acquire; Annual retail gross sales: 2.1% y/y (5.0% forecast, 5.4% earlier)
ANZ: New Zealand’s enterprise confidence improved from 33.2 to 36.6 in January; Inflation expectations dipped from 4.61% to 4.28% (lowest since Nov 2021); “The RBNZ has carried out sufficient”; “Companies additionally count on the worst is previous”
Australia’s CPI in This autumn raised RBA fee minimize bets: 0.6% q/q (0.8% forecast, 1.2% earlier); Annual fee at 3.4% y/y (3.7% forecast, 4.3% earlier); RBA’s trimmed imply CPI at 0.8% q/q (0.9% forecast, 1.2% earlier)
Australia’s Treasurer Jim Chalmers posted on X: “We’re making very welcome and inspiring progress within the battle towards inflation…however this isn’t mission achieved as a result of we all know persons are nonetheless beneath stress.”
China’s NBS manufacturing PMI improved from 49.0 to 49.2 in January and marked its fourth month-to-month contraction; Non-manufacturing PMI rose from 50.4 to 50.7
Japan’s client confidence index improved from 37.2 to a two-year excessive of 38.0 in January as inflation eased
Japan’s housing begins for December: -4.0% y/y (-6.6% forecast, -8.5% earlier)
Lloyds Financial institution U.Okay. Enterprise Barometer rose 9 factors to 44%, the most important improve since August and the best since February 2022, thanks partly to easing inflation and fee minimize bets
Germany’s import costs for December: -1.1% m/m (-0.6% forecast, -0.1% earlier)
Germany’s retail gross sales for December: -1.6% m/m (0.6% forecast, -2.5% earlier)
U.Okay.’s Nationwide home value index in January: 0.7% m/m (0.1% forecast, 0.0% earlier); Annual home value progress improved from -1.8% to -0.2% in January, the strongest since January 2023
Switzerland’s retail gross sales for December: -0.8% y/y (0.9% forecast, -1.5% earlier)
France’s preliminary CPI for January: -0.2% m/m (0.0% forecast, 0.1% earlier); Annual fee at 3.4% y/y (4.1% earlier)
Value Motion Information
Overlay of AUD vs. Main Currencies Chart by TradingView
Cooler-than-expected quarterly CPI stories from Australia introduced the bears to AUD’s yard at present as merchants priced in elevated probabilities of a Reserve Financial institution of Australia (RBA) rate of interest minimize before later.
AUD misplaced pips throughout the board and misplaced as a lot as 0.60% towards its counterparts earlier than rate of interest minimize speculations translated to total risk-taking within the markets.
The danger-friendly buying and selling surroundings turned issues round for AUD, which has halved its intraday losses however remains to be buying and selling within the crimson throughout the board.
Upcoming Potential Catalysts on the Financial Calendar:
Credit score Suisse Switzerland financial expectations at 9:00 am GMT
Italy’s unemployment fee at 9:00 am GMT
U.S. ADP report at 1:15 pm GMT
Canada’s month-to-month GDP at 1:30 pm GMT
U.S. quarterly employment price index at 1:30 pm GMT
U.S. EIA crude oil inventories at 3:30 pm GMT
FOMC assertion at 7:00 pm GMT and presser at 7:30 pm GMT
Australia’s constructing approvals at 12:30 am GMT (Feb 1)
Australia’s NAB quarterly enterprise confidence at 12:30 am GMT (Feb 1)
China’s Caixin manufacturing PMI at 1:45 am GMT (Feb 1)
Use our new Forex Warmth Map to rapidly see a visible overview of the foreign exchange market’s value motion! ️
USD/CAD 15-min Foreign exchange Chart by TradingView
I don’t know should you’ve observed however USD/CAD has been making decrease highs and decrease lows since final week after the pair discovered resistance on the 1.3530 earlier excessive.
USD/CAD is at the moment buying and selling close to 1.3425 after sufficient FX bulls pushed the pair greater from the 1.3400 psychological stage.
Are we taking a look at a greater alternative to quick USD/CAD?
Later at present, the Fed members will drop their January financial coverage selections. Whereas nobody is anticipating financial coverage adjustments from Chairman Powell and his workforce, many are on the fringe of their seats to see if JPow will ̶e̶n̶a̶b̶l̶e̶ not converse towards March rate of interest minimize bets.
If we don’t see language cautioning towards March fee minimize speculations, then USD may lose pips towards its counterparts. The oil-related Loonie, which is receiving additional increase from greater crude oil costs, may entice extra patrons.
Within the occasion of a USD-bearish buying and selling surroundings, USD/CAD could flip decrease from its technical resistance space. As you’ll be able to see, the 1.3425 – 1.3450 space is near the R1 (1.3430) Pivot Level line in addition to the descending channel resistance within the 15-minute time-frame.
USD promoting with technical triggers has higher odds of drawing in sufficient sellers to tug USD/CAD to the 1.3410 Pivot Level line if not the 1.3400 psychological deal with.
Because the FOMC Assertion Occasion Information suggests, although, it’s in all probability higher to ebook income forward of different potential catalysts which will have an effect on USD’s costs.
What do you suppose? Will USD/CAD lengthen its downtrend at present?
