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For the 24 hours to 23:00 GMT, the USD rose 0.48% against the JPY and closed at 115.03 on Friday.

In the Asian session, at GMT0400, the pair is trading at 114.39, with the USD trading 0.56% lower against the JPY from Friday's close.

Overnight data showed that Japan's seasonally adjusted retail trade eased more-than-expected by 1.7% MoM in December, compared to market expectations for a fall of 0.5% and following a gain of 0.2% in the preceding month. Further, the nation's larger retailers' sales declined 1.3% in December, higher than market consensus for a drop of 1.0% and after registering a fall of 0.3% in the preceding month.

The pair is expected to find support at 113.96, and a fall through could take it to the next support level of 113.54. The pair is expected to find its first resistance at 115.09, and a rise through could take it to the next resistance level of 115.80.

Moving ahead, investors will closely monitor Japan's jobless rate and flash industrial production data, both for December, scheduled to release overnight.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.11% against the CHF and closed at 0.9986 on Friday.

In the Asian session, at GMT0400, the pair is trading at 0.9964, with the USD trading 0.22% lower against the CHF from Friday's close.

The pair is expected to find support at 0.9938, and a fall through could take it to the next support level of 0.9911. The pair is expected to find its first resistance at 1.0009, and a rise through could take it to the next resistance level of 1.0053.

Ahead in the day, traders will focus on Switzerland's KOF leading indicator for January and total sight deposits for the last week.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.31% against the CAD and closed at 1.3132 on Friday.

In the Asian session, at GMT0400, the pair is trading at 1.3130, with the USD trading a tad lower against the CAD from Friday’s close.

The pair is expected to find support at 1.3094, and a fall through could take it to the next support level of 1.3059. The pair is expected to find its first resistance at 1.3158, and a rise through could take it to the next resistance level of 1.3187.

With no economic releases in Canada today, investor sentiment will be governed by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

A note on lower timeframe confirming price action…

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails – essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

Weekly gain/loss: – 8 pips

Weekly closing price: 1.0690

Weekly opening price: 1.0721

Despite the pair ranging over 100 pips last week, EUR/USD prices are little changed. What is notable from a technical perspective, nevertheless, is the reaction seen from the long-term weekly trendline resistance (stretched from the low 0.8231), which consequently formed a strong-looking weekly selling wick. Providing that the bears remain in the driving seat here, the next downside objective on the weekly timeframe comes in at 1.0333-1.0502: a weekly support area that's positioned directly below the 2017 yearly opening level at 1.0515.

While the weekly bears look to be in a good place right now, daily demand at 1.0589-1.0662 was brought into the picture on Thursday and remained balanced going into the week's close. Be that as it may, it will take a decisive (daily) close above the nearby daily resistance at 1.0710 before our desk reports that the bulls may be gaining the upper hand.

A quick recap of Friday's trade on the H4 shows that the bulls attempted to breach the 1.07 handle, following a lower-than-expected US advance GDP report. However, as you can see, price failed to sustain gains beyond this point and ended the day back below 1.07.

Our suggestions: In a nutshell, the nuts and bolts of this pair's structure can be summed up as follows:

• Weekly action suggesting lower prices ahead.
• Daily flow reacting from demand, but has yet to prove itself by closing above neighboring daily resistance at 1.0710.

Taking into account that the this morning's open gapped over 30 pips north this morning, bringing price back above the 1.07 boundary, we'll likely see 1.07 tested as support in the next hour as the weekend gap looks to be filled. Levels of interest above 1.07 today are the H4 supply at 1.0765-1.0753 and the H4 Quasimodo resistance at 1.0796.

One could look for an intraday bounce from the H4 supply today, but be aware that the more attractive area for sells is seen around the H4 Quasimodo. Backing this level we have the 1.08 handle, a deep H4 88.6% Fib resistance at 1.0810, weekly resistance at 1.0819 (sits just above the aforementioned weekly trendline resistance) and finally there's also a possible H4 AB=CD bearish pattern that tops out around 1.0838 which sports a converging 127.2% Fib extension.

With the above points in mind, buying right now is something we'd feel comfortable participating in. Neither would we feel all that great above selling from the aforementioned H4 supply. We will, nevertheless, keep a close eye on the above noted 1.08 region due to its connection with the higher timeframes.

Data points to consider: German prelim CPI. US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.08 region ([possible area to look at selling from without the need for additional confirmation] stop loss: 1.0840).

GBP/USD:  

Weekly gain/loss: + 170 pips

Weekly closing price: 1.2543

Weekly opening price: 1.2581

Following the prior week's bullish engulfing candle that formed just ahead of weekly support at 1.1904, the pair drove north last week. Munching through a weekly trendline resistance (now acting support) taken from the high 1.3445, we can see that price ended the week crossing swords with a weekly Quasimodo resistance level at 1.2673, and printed a moderate end-of-week correction.

As is evident from the daily chart, daily supply at 1.2728-1.2657 bolstered last week's correction off the weekly Quasimodo. Before we all begin searching for the sell button mind you, traders may want to note that the daily candles also closed the week a few pips ahead of a daily support area coming in at 1.2510-1.2415. A breakdown through this zone would place the daily demand base at 1.2252-1.2342 in sight, and this, as you can probably see, beautifully converges with the above noted weekly trendline support and the 2017 yearly opening level at 1.2329.

The unit, as can be seen on the H4 chart, gapped close to 40 pips north at this morning's open, lifting price above the H4 mid-way resistance at 1.2550. This comes after a rather sluggish Friday (despite the US reporting a weak 4th quarter Advance GDP) where the candles remained capped between the above noted mid-level number and a H4 demand zone penciled in at 1.2490-1.2531.

Our suggestions: As of this moment, we do not see much to hang our hat on. H4 supply at 1.2611-1.2589, which encapsulates the 1.26 handle, may be something to pay attention to given where the weekly flow is currently positioned (see above). However, trading here without waiting for further confirmation is risky (see the top of this report for ideas on how to confirm an area using price action), since price will likely want to tag the H4 mid-way resistance point at 1.2650 due to the daily supply mentioned above at 1.2728-1.2657.

The better area, in our view, comes in at 1.2699: a H4 Quasimodo resistance that fuses beautifully with the 1.27 handle and is housed within the said daily supply as well as sitting only 25 or so pips above the aforementioned weekly Quasimodo resistance.

Data points to consider: US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.2611-1.2589 ([wait for a lower-timeframe confirming setup to form before looking to execute a trade] stop loss: dependent on where one confirms this area). 1.27 region ([possible area to look at selling from without the need for additional confirmation] stop loss: 1.2730 – 2 pips above daily supply).

AUD/USD:  

Weekly gain/loss: – 8 pips

Weekly closing price: 0.7543

Weekly opening price: 0.7558

After witnessing four uninterrupted weekly bullish candles take shape, the commodity currency finished last week marginally in the red. While this may be true, the weekly support area at 0.7524-0.7450 is very much in play and could effectively force the unit higher this week. The next notable zone to the upside falls in at 0.7849-0.7752: a weekly supply area that merges with a weekly trendline resistance coming in from the high 0.7835. On a side note, zooming out one can also see a possible large-scale weekly bearish pennant forming between two converging weekly trendlines (0.6827/0.7835).

Strengthening the aforementioned weekly support area is a daily support area drawn in at 0.7524-0.7494 that held firm from Wednesday onwards last week. From this, we agree that the pendulum does indeed look to be swinging toward a rally higher. We would, nonetheless, prefer to see the nearby daily supply zone at 0.7581-0.7551 engulfed beforehand. The next area of importance beyond here sits at 0.7720, conveniently located 30 or so pips below the above mentioned weekly supply area.

Buoyed by Friday's disappointing 4th quarter Advance GDP print from the US, the H4 candles managed to recover relatively quickly after breaking through the H4 channel support line taken from the low 0.7449. Yet, in spite of this, the bulls failed to maintain this pressure beyond the immediate H4 trendline resistance extended from the high 0.7603.

Our suggestions: In the event that a H4 bullish close is seen above the current H4 trendline resistance, an intraday long up to the 0.76 handle and its partner level (the December open at 0.7606) could be an option. It would only be once daily price has CLOSED above daily supply at 0.7581-0.7551, would we advise looking to go long on a break above 0.76/0.7606, preferably on a confirmed retest as support (see the top of this report for info on confirmation).

Data points to consider: RBA Assistant Gov. Debelle speaks at 7.45am. US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: A break above/retest of the H4 trendline resistance could signal a potential long opportunity ([wait for a lower-timeframe confirming setup to form following the retest before looking to execute a trade] stop loss: dependent on where one confirms this area).
• Sells: Flat (stop loss: N/A).

USD/JPY:  

Weekly gain/loss: + 50 pips

Weekly closing price: 115.06

Weekly opening price: 114.74

Over the last week, we can see that weekly price chalked in its second consecutive weekly bullish tail and now looks to be heading north to shake hands with weekly resistance at 116.08, followed closely by the 2017 yearly opening level at 116.97. With that being said, the weekly buyers will have to contend with daily sellers at a daily resistance area drawn in from 115.62-114.60 beforehand. Supposing that a daily close above this zone is seen, there's little, as far as we can see on this timeframe, standing in the way of price challenging daily resistance at 118.20. The daily wick marked with a black arrow at 116.87 is, what we like to call, a supply consumption wick. It simply means that we believe this wick consumed the majority of supply above the current daily resistance area.

Weighed on heavily by Friday's poor GDP print from the US, the USD/JPY struggled to advance from the 115 handle. The pair, however, started this week at 114.74, 32 pips lower than Friday's closing point, resulting in price testing December's opening level at 114.68. Attempting to go long from this monthly level would not be something we'd encourage. Not only is the 115 handle sitting a few pips above here, there's also the fact that the daily candles remain within a daily resistance area at present (see above)!

Our suggestions: While a long from current price is discouraged, a H4 close above the 115 barrier would be attractive. This – coupled with a daily close above the daily resistance area would very likely open the trapdoor up to 116, which as we're sure you already know, sits just 8 pips below the weekly resistance discussed above.

116 would not only make for a strong take-profit zone, but it is also a base in which shorts could be considered. Building a case for entry here we have the following: two H4 trendline resistances (115.44/112.86), a H4 61.8% Fib resistance at 116.27 and a H4 Quasimodo resistance at 116.34.

Data points to consider: US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Watch for a H4 close to be seen above the 115 threshold and then look to trade any retest seen thereafter ([wait for a lower-timeframe confirming setup to form [see the top of this report] following the retest before looking to execute a trade] stop loss: dependent on where one confirms this area).
• Sells: 116.34/116 ([possible area to look at selling from without the need for additional confirmation] stop loss: 116.36).

USD/CAD:  

Weekly gain/loss: – 160 pips

Weekly closing price: 1.3148

Weekly opening price: 1.3133

Last week's sharp run to the downside erased the bulk of the prior week's gains, but did, however, succeed in holding firm above the weekly demand area at 1.3006-1.3115. Ahead of this angle is the 2017 yearly opening level at 1.3434 which blends with a weekly trendline resistance taken from the high 1.4689. Directly below, nonetheless, sits a weekly trendline support extended from the high 1.1278.

Bolstering the current weekly demand zone is a daily demand coming in at 1.3006-1.3041 (located around the lower edge of the above noted weekly demand) that happens to fuse with a daily trendline support taken from the low 1.2654.

On the back of Friday's decline in crude oil prices, the USD/CAD gravitated north following a successful retest off 1.31, concluding the trading week by tapping the underside of a H4 mid-way resistance at 1.3150. Playing the long card today could be tricky given this H4 level and the nearby H4 supply at 1.3171-1.3155. There is also a H4 AB=CD approach forming (see black arrows) which does in fact terminate within the said H4 supply around the 1.3161 neighborhood. Therefore, a reaction may very well be seen from here this week.

Our suggestions: Although the H4 supply boasts a reasonable amount of confluence, there's little support coming in from the bigger picture. As a result, waiting for the lower timeframes to prove seller interest exists before pulling the trigger may be the better path to take if one is interested in selling from here (see the top of this report for info on how to enter using lower-timeframe structure).

Data points to consider: US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: 1.3029 region ([a reasonably sized H4 bull candle will need to be seen from here before a trade can be executed] stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).

USD/CHF

Since the beginning of the week, the H4 candles have been chiseling out a H4 consolidation zone fixed at 0.9972/1.0018, which, as you can see, also houses parity (1.0000). Beyond the top edge of this range sits a H4 resistance at 1.0041, shadowed closely by the H4 mid-way resistance at 1.0050. A breakout south of this consolidation, however, will place the H4 mid-range Quasimodo support at 0.9948 in the firing range.

Over on the weekly chart, price is seen hovering just ahead of the 2016 yearly opening level at 1.0029. Providing that this line is stable, the next area of interest can be seen at 0.9943: a weekly support level positioned just a few pips beneath the above said H4 mid-range Quasimodo support. Turning our attention to the daily candles, the daily trendline resistance taken from the high 0.9956 continues to cap upside, which could eventually lead to a decline down to the aforementioned weekly support level.

Our suggestions: Should the market decide to pierce through the lower edge of the current H4 consolidation today, one could look to enter long at the mid-range H4 Quasimodo support level at market (given its relationship with weekly price) since stops can comfortably be placed beyond the apex low (0.9929) at 0.9927.

In addition to this, shorts could also be considered from the H4 resistance 1.0041, as it's located nearby both the 2016 yearly opening level and daily trendline resistance. Be that as it may, there's a good chance that price could whipsaw through this H4 level and quite possibly the H4 1.0050 level as well. With that, we would not advise entering at market from here. Instead, wait for a lower-timeframe confirming sell setup to form. This could be either a break of demand followed by a retest as supply, a trendline break/retest or simply a collection of well-defined selling wicks seen positioned around the H4 level. We typically search for lower-timeframe confirmation between the M15 and H1 timeframes, since most of our higher-timeframe areas begin with the H4. Stops are usually placed 3-5 pips beyond confirming structures.

Data points to consider: 4th quarter Advance GDP print from the US, along with US durable goods orders at 1.30pm GMT.

Levels to watch/live orders:

• Buys: 0.9949 ([possible level to look at buying from without the need for additional confirmation] stop loss: 0.9927).
• Sells: Flat (stop loss: N/A).

DOW 30:  

Weekly gain/loss: + 257 points

Weekly closing price: 20075

Weekly opening price: 20021

After spending over a month hovering below the 20000 mark, US equities rose beyond this number last week finishing off tapping a high of 20138! In view of this, there are absolutely no resistance levels in this market right now. Therefore, to our way of seeing things, the best we can do for the time being is look to ‘buy the dips'.

As you can see on both the daily and H4 charts, the DOW gapped over 50 points south this morning, planting the market within reaching distance of the 20000 mark, the H4 support at 19989 and the daily support hurdle coming in at 19964.

Our suggestions: Between 19964 and 20000 (green area on the H4 chart) is a zone where we expect stocks to correct from today should price reach this low. Waiting for at least a H4 bull candle to form within the walls of this zone would, in our humble opinion, be the safer, and quite frankly, more logical route to take if one is contemplating a buy from here. As for targets, we would personally be looking to join the trend here and hold medium/long term. However, looking to reduce risk to breakeven and take partial profits off the table once the weekend gap has been filled is something we'll very likely look to implement.

Data points to consider: US personal spending and income (PCE index) figures set for release at 1.30pm and pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: 19964/20000 ([wait for a H4 bull candle to form before looking to execute a trade] stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).

GOLD  

Weekly gain/loss: – $17.5

Weekly closing price: 1190.9

Weekly opening price: 1189.7

Managing to break a four-week bullish phase, last week's action printed a strong-looking weekly bearish engulfing candle around the weekly trendline resistance taken from the low 1130.1. On the condition that the bears are able to maintain this momentum this week, it's possible that we could see further downside given that the next support target does not come into view until the 2017 yearly opening level at 1150.9.

The story on the daily chart shows that Friday's session chalked in a picture-perfect buying tail that pierced through the lower edge of a daily support area at 1197.4-1187.7. This could, despite what we've noted on the weekly timeframe, encourage buyers into the market today/early this week, and potentially pull prices up to daily supply fixed at 1220.9-1212.0.

The H4 candles, however, have begun the week strongly, already breaking through a ceiling of offers around a H4 resistance level at 1191.1. Right now, there's very little seen stopping price from connecting with the H4 resistance area registered at 1198.4-1203.8.

Our suggestions: As of this moment, we do not see much on offer. Yes, we could look to short from the aforementioned H4 resistance base, but risk an unnecessary loss, since although we'd be selling alongside weekly flow, we'd also be selling into potential daily buyers (see above). As such, our team's position will remain flat going into today's segment.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

Global Markets:

• Asian stock markets: Nikkei down 0.65 %, ASX 200 lost 0.80 %, Shanghai & Hang Seng closed for holiday
• Commodities: Gold at $1196 (+0.45 %), Silver at $17.18 (+0.25 %), WTI Oil at $52.90 (-0.50 %), Brent Oil at $55.40 (-0.60 %)
• Rates: US 10-year yield at 2.47, UK 10-year yield at 1.47, German 10-year yield at 0.46

News & Data:

• Japan Retail Trade (YoY) Dec: 0.6% (est. 1.7%, prev. 1.7%)
• Japan Retail Sales (MoM) Dec: -1.7% (est. -0.5%, prev. 0.2%)
• Global shares, dollar retreat on Trump travel ban, weak U.S. GDP – RTRS
• Oil extends decline as rising U.S. output weighs – RTRS
• Dollar slips on lacklustre U.S. data, concerns over Trump trade policy – RTRS

CFTC Positioning Data:

• EUR short 52K vs. 67K short last week. Shorts trimmed by 15K
• GBP short 66K vs. 66K short bus week. Unchanged
• JPY short 67K vs. 78K short last week. Shorts trimmed by 11K
• CHF short 14K vs. 14K short last week. Unchanged
• CAD long 3K vs. 5K short last week. Position flips to long with change of 8K
• AUD long 10K vs 5K long last week. Longs increase by 5K
• NZD short 10K vs 12K short last week. Shorts trimmed by 2K

Markets Update:

The Asian stock markets reacted negatively to the political developments in the United States over the weekend, with both the Nikkei and ASX down more than 0.50 % on the day. Chinese and HK markets are closed for the Lunar New Year holiday.

In FX, the Dollar weakened against most other major currencies. EUR/USD opened with a 20 pips gap higher and rallied to 1.0740, while GBP/USD rose from 1.2540 to 1.26. Meanwhile, USD/JPY came under pressure and fell from 115.00 to 114.30. Support is seen at 114.10, followed by 113.05/10.

While the focus has been on politics in the past few days, the weak US GDP print certainly also has weighed on the US Dollar. The economy grew only 1.9 % quarter-on-quarter, while the market expected a 2.2 % increase. Given the crowded positioning, the Dollar could remain under pressure in the near-term.

Upcoming Events:

• 07:45 GMT – RBA Assistant Governor Debelle speaks
• 09:00 GMT – ECB Member Nowotny speaks
• 10:00 GMT – Euro Zone Consumer Confidence
• 13:00 GMT – German CPI
• 13:30 GMT – US Pending Home Sales
• 13:30 GMT – US Core PCE Price Index
• 23:30 GMT – Japanese Unemployment Rate
• 23:30 GMT – Japanese Household Spending
• 23:50 GMT – Japanese Industrial Production

The Week Ahead:

Tuesday, January 31st

• 00:30 GMT – Australian NAB Business Confidence
• 03:00 GMT – Bank of Japan Interest Rate Decision
• 06:30 GMT – Bank of Japan Press Conference
• 07:00 GMT – German Retail Sales
• 07:45 GMT – French CPI
• 08:00 GMT – Spanish CPI
• 08:00 GMT – ECB President Draghi speaks
• 08:55 GMT – German Unemployment Rate
• 10:00 GMT – Euro Zone GDP
• 10:00 GMT – Euro Zone CPI
• 13:30 GMT – Canadian GDP
• 14:45 GMT – US Chicago PMI
• 15:00 GMT – US CB Consumer Confidence
• 21:45 GMT – New Zealand Unemployment Rate
• 22:30 GMT – Australian AIG Manufacturing Index
• 22:35 GMT – Bank of Canada Governor Poloz speaks

Wednesday, February 1st

• 01:00 GMT – Chinese Manufacturing PMI
• 01:00 GMT – Chinese Non-Manufacturing PMI
• 08:45 GMT – Italian Manufacturing PMI
• 08:50 GMT – French Manufacturing PMI
• 08:55 GMT – German Manufacturing PMI
• 09:00 GMT – Euro Zone Manufacturing PMI
• 09:30 GMT – UK Manufacturing PMI
• 13:15 GMT – US ADP Nonfarm Employment Change
• 15:00 GMT – US ISM Manufacturing PMI
• 15:30 GMT – US Crude Oil Inventories
• 19:00 GMT – Federal Reserve Interest Rate Decision
• 19:00 GMT – FOMC Statement

Thursday, February 2nd

• 00:30 GMT – Australian Trade Balance
• 08:15 GMT – Swiss Retail Sales
• 09:30 GMT – UK Construction PMI
• 12:00 GMT – Bank of England Interest Rate Decision
• 12:00 GMT – BoE Meeting Minutes
• 12:30 GMT – Bank of England Governor Carney speaks
• 13:30 GMT – US Initial Jobless Claims

Friday, February 3rd

• 01:45 GMT – Chinese Caixin Manufacturing PMI
• 08:45 GMT – French Services PMI
• 08:50 GMT – Italian Services PMI
• 08:55 GMT – German Services PMI
• 09:00 GMT – Euro Zone Services PMI
• 09:30 GMT – UK Services PMI
• 10:00 GMT – Euro Zone Retail Sales
• 13:30 GMT – US NFP
• 13:30 GMT – US Unemployment Rate
• 13:30 GMT – US Average Hourly Earnings
• 13:45 GMT – US Services PMI
• 15:00 GMT – US Factory Orders
• 15:00 GMT – US ISM Non-Manufacturing PMI

EUR/USD

The common currency lost  its January momentum by the end of the month, closing the week against the greenback flat a few pips below the 1.0700 level.  Much of the  so far modest dollar's recovery came from US indexes soaring to all-time highs on renewed hopes that US President Trump, will boost growth and inflation. The measures announced during his first week at the office indicate that he is serious about implementing protectionist trade policies, as among other decisions, the withdraw the US definitively from the TPP deal.  US data released on Friday indicated that confidence in the future is somehow stronger than economic growth, as the most positive figure was the final reading of the Michigan Consumer Sentiment index for January, up to 98.5 from previous estimate of 98.1 the highest since 2004. The Q4 GDP disappointed, give a 1.9% real growth in the three months to December, below the 2.2% expected and previous 3.5%.  December Durable Goods orders drop 0.4% amid a surprising transportation orders decline, with the core reading, ex-transportation, up 0.5%, in line with market's expectations.

During this week, attention will center on the FED's meeting, although the BOJ, and the BOE will also have monetary policy meetings. As for the US Central Bank, no changes to the current rate of 0.50%-0.75% are expected, and given that there won't be economic projections or a press conference, attention will focus in the statement, and clue it may offer on upcoming rate hikes. Also, the US will release its monthly job's report on Friday.

From a technical point of view, the daily chart shows that the price retreated from a major resistance, the 100 SMA in the daily chart. Additionally, the pair closed the day a few pips below the 38.2% retracement of the November/January decline at 1.0710, but held above a bullish 20 SMA, whilst technical indicators in the mentioned chart retreated within positive territory, but so far give no signs of a downward continuation. In the 4 hours chart, the downward potential seems to be increasing, given that the price is now contained by a bearish 20 SMA, whilst indicators head modestly lower within bearish territory. Still, the pair is holding around a daily ascendant trend line coming from this month multi-year low of 1.0340, unable to confirm a break lower. A downward acceleration through 1.0650, is what it takes to confirm further slides for this Monday, towards the next Fibonacci support at 1.0565.

Support levels: 1.0650 1.0610 1.0565

Resistance levels: 1.0710 1.0740 1.0770

USD/JPY

The USD/JPY pair closed the week a handful of pips above the 115.00 level, underpinned by a surprise move by the BOJ as the Central Bank increased its buying of 5 to 10-year bond yields from ¥410B to ¥450B. The 10-year JGB yield dropped to 0.075% from previous 0.09%, whilst the 5-year yield fell to -0.10%. Also, supporting the pair this past week was a strong rally in equities, although gains were limited on Friday by soft US data. The pair has set a strong floor in the 112.50 region, from where it recovered strongly in the past two weeks, yet given that the recovery stalled below the high within both lows, at 115.60, the upward potential remains limited. In the daily chart, technical indicators head higher, but are still unable to enter bullish territory, whilst the 100 DMA keeps heading north below the current level, indicating that a break above the mentioned resistance could indicate further gains for the upcoming days. In the 4 hours chart, however, technical indicators have lost upward strength, now consolidating within positive territory, whilst the price stands above a still bearish 100 SMA, but below its 200 SMA, this last around 116.00.

Support levels: 114.50 114.00 113.60

Resistance levels: 115.35 115.60 116.00

GBP/USD

After rallying to a fresh monthly high of 1.2673, the GBP/USD pair retreated on Thursday, despite resilient UK economic data. The economy grew by 0.6% in the last quarter or 2016, according to the GDP estimate, beating expectations of a 0.5% advance, even accelerating in the second half of the year when compared to the first half. The Supreme Court ruled against the government in the case of the Parliament's intervention in the Brexit date, but it was renewed dollar demand what weighed on the pair. The Bank of England will have a monetary policy meeting this week, mostly expected to be a non-event, as it seems too early for Carney to reverse the easing announced last August. Despite the retracement, the GBP/USD pair hasn't lost completely its latest upward potential, given that it held above 1.2510, the 23.6% retracement of its latest bullish run. In the daily chart, the 20 DMA maintains a modest bullish slope around 1.2330, converging with the 50% retracement of the same rally, whilst technical indicators retreated from overbought readings, but remain within bullish territory. In the shorter term, and according to the 4 hours chart, the risk has turned towards the downside, as the pair is currently developing below its 20 SMA, whilst the Momentum indicator entered bearish territory, maintaining its bearish slope, and the RSI indicator turned lower around 52.

Support levels: 1.2510 1.2470 1.2425

Resistance levels: 1.2595 1.2635 1.2680

GOLD

Spot gold closed the week sharply lower at $1,190.87 a troy ounce, undermined by a spike in risk-appetite as speculative interest resumed the "Trump-trade" mid last week. The commodity fell to a weekly low of 1,180.49 last Friday, paring losses on the back of soft US data. A market report, showing that physical demand for gold declined to a seven-year low during 2016, and that the during the last quarter of the year the commodity reached its largest levels of oversupply in over a decade, also weighed on the commodity. From a technical point of view, the daily chart shows that the price retreated from a key resistance, a bearish 100 SMA, while also settling by the end of the week below its 20 SMA, suggesting an increasing bearish potential. In the same chart, indicators have continued retreating from overbought readings, currently hovering around their mid-lines, leaving gold at risk of falling further. In the 4 hours chart, the 20 SMA heads south above the current level, and after crossing below the 100 SMA, whilst technical indicators bounced from oversold readings, but remain within negative territory, with the RSI turning lower around 42, also suggesting an increased downward potential.

Support levels: 1,181.20 1,173.15 1,162.10

Resistance levels: 1,196.00 1,204.50 1,214.60

WTI CRUDE

Crude oil prices remained flat for a second consecutive week, with West Texas Intermediate futures closing a few cents above $53.00 a barrel. A surprise build in US stockpiles offset news that the OPEC compiled with the production cut announced last November during the first month of the year. Overall, the commodity remains neutral, within a tight 52-55 range. From a technical point of view, WTI maintains a neutral stance, although with the downside limited according to the daily chart, as the price stands around a horizontal 20 SMA, but well above a bullish 100 SMA. Technical indicators in the mentioned chart have turned lower within neutral territory, unable to provide clear directional clues. In the 4 hours chart, the price is stuck within a congestion of moving averages, all together in a $1 range, whilst technical indicators are also around neutral territory, with modest bearish slopes.

Support levels: 53.00 52.55 52.00

Resistance levels: 53.65 54.30 55.00

DJIA

US major indexes closed little changed last Friday, with the DJIA down 7 points, to 20,093.78 and the S&P down by 2 points at 2,294.69. The Nasdaq Composite managed to gain some, up by 5 points or 0.10% to 5,660.78, with equities weighed by soft Q4 GDP growth. Nevertheless, indexes closed near record levels achieved earlier in the week. Earnings reports will keep on coming during the upcoming days, and will set the tone for stocks, beyond FOMC announcement or the NFP report. Within the Dow, Microsoft was the best performer, up 2.35%, followed by Caterpillar that added 1.82%. Chevron on the other hand, led losers' list down by 2.37%. In the daily chart, technical indicators have lost upward strength and turned lower, with the Momentum near its 100 level and the RSI barely retreating from overbought territory, whilst the benchmark remains well above a horizontal 20 SMA, indicating a limited downward potential. In the 4 hours chart, the Momentum indicator heads sharply lower, now nearing its mid-line, but the RSI indicator consolidates around 62 and the 20 SMA maintains a strong bullish slope, now providing an immediate dynamic support at 20,058.

Support levels: 20,058 19,999 19,950

Resistance levels: 20,106 20,150 20,200

FTSE 100

The FTSE 100 advanced 23 points on Friday, and settled at 7,184.49, not enough to enter positive territory weekly basis. The Footsie was held down by a strong Pound that rallied to fresh January highs this past week, with Friday's advance supported by Tesco that closed 9.29% higher after announcing it will restart paying dividends and announcing the company reached a deal to buy food wholesaler Booker Group for £3.7 billion. Pearson on the other hand was the worst performer, down 2.41%. Technically, the daily chart shows that there was not much action this past week, with the benchmark confined to a tight range, below its 20 DMA and with indicators flat within neutral territory, maintaining the risk towards the downside. The weekly low was set at 7,130, the key support for the upcoming days as a break below it should lead to further losses. In the 4 hours chart, the technical picture is also neutral, with the benchmark confined around its 20 and 100 SMA, and technical indicators lacking directional strength around their mid-lines.

Support levels: 7,130 7,085 7,025

Resistance levels: 7,183 7,241 7,288

DAX

The German DAX closed last Friday at its highest since May 2015 at 11,814.27, despite losing 0.29% or 34 points last Friday, amid a decline in auto makers and energy-related equities. ThyssenKrupp was the best performer, up by 1.56%, with Deutsche Bank leading losers' list, down by 1.53%, followed by Volkswagen that closed down 1.30% and Daimler that shed 1.20%. Solid earnings reports were behind the weekly gain, particularly after Spaniard Banco de Santander S.A.'s report. As for the DAX, the daily chart shows that the index holds well above its moving averages, with the shortest being the 20 DMA around 11,623, the Momentum indicator flat within positive territory, and the RSI indicator turning modestly lower around 69, not enough to confirm an upcoming downward move. In the shorter term, and according to the 4 hours chart, the bearish side is also limited, as the 20 SMA heads north around 11.724, whilst technical indicators consolidate well above their mid-lines.

Support levels: 11,796 11,757 11,694

Resistance levels: 11,833 11,891 11,945

STOCKS

Overall some correction is visible in global equities after some strength seen last week. Some sideways movement could be expected in the early sessions this week before the upward momentum takes force.

Dow (20093.78, -0.04%) could possibly see a sideways trade in the 20000-20150 region for a couple of sessions before moving higher towards 20500. While the support at 20000 holds, we keep the upside possibility of 20500-20700 open for the near term.

Dax (11814.27, -0.29%) is trading just below immediate resistance zone of 11920-11930 (within the broad 11900-12000 resistance levels) which could keep the index down for at least the next 2-3 sessions. We could possibly see a re-test of 11680 before seeing a sharp bounce back towards current levels.

The Chinese markets are closed today. But after the holiday session is over, we may expect Shanghai (3159.17, +0.31%) to rally towards 3175-85 levels. Note weekly resistance near 3200 which could hold in the near term.

Nikkei (19322.78, -0.74%) could remain range-bound in the next few sessions in the 19000-19620 region but could regain strength possibly by the end of the week to move up strongly towards 19620-19750 levels in case a sharp rise is seen in Dollar-Yen (114.38).

Nifty (8641.25, +0.45%) shot up moving above 8600 last week and could be headed towards 8740-8800 levels as mentioned earlier. But also note immediate resistance visible on the near term charts near 8650 which could push the index towards 8600 or lower just now.

COMMODITIES

Gold (1194.57) has moved up again on slight weakness in the Dollar Index. But note that immediate resistance is visible near 1200-1210 region which is likely to keep prices low in the near term. We may continue to target levels of 1160 while below 1210.

Silver (17.17) is trading below the 17.50 resistance and while that holds, it could come off towards 17.00-16.00 levels in the near term.

Brent (55.32) and WTI (53.02) have been range-bound in the broad 52.50-58.50 and 50-56 regions respectively and unless a sharp breakout on either side is seen, it is difficult to say how long this sideways consolidation would continue. While we keep the overall longterm bullish sentiment intact, we need to wait for confirmation in the near to medium term.

Copper (2.69) has risen and could re-test the previous highs of 2.75-2.78 levels in the near term. Also note that the 2.75-2.80 zone is a crucial resistance zone and could possibly hold for the medium term. Only a sustained break above 2.80 could ensure further bullishness on Copper.

FOREX

Dollar Index (100.20) was unable to sustain the rise of Thursday-Friday and trades lower today. But, it also has important Support in the 100.05-99.75 region. This week, the market will battle to see whether this Support is broken or not.

Maybe the curencies will consolidate/ move sideways for a while in the coming week or two. A biggish move could be in the offing after the consolidation. The markets will be keen to know the Fed's path for increase of interest rates after the FOMC meeting on Wednesday, especially in light of the weak Q4 GDP data in the USA. While further Dollar weakness is a possibility, confirmation is needed.

Should the Euro (1.0730), which has bounced from Friday's Suport levels, break above crucial near-term Resistance at current levels, it can rise to test 1.08. However, the Euro might not find more near term strength from rising European interest rates (see Interest Rates below).

Re-examining what we said on Friday, we find that Dollar-Yen (114.45) has important Resistance at 115 (5-week MA) this week, which could keep it pressured lower. If so, there could be danger of a break below 113.85-65 going into next week. Break above 115.00 is needed to bring up 115.60/ 116.30.

The Pound (1.2590) is potentially bullish but needs to break above the 21-week MA near current levels convincingly. Success can take it up towards 1.29. Medium/ long-term Support at 1.2400 now.

Like the Pound, the Aussie (0.7558) has potential to rise further towards 0.77, but faces Resistances on the Weekly charts. Failure to rise can push it down towards 0.74

Dollar-Rupee (68.04) trades near 68.06 on the NDF today. Likely to trade sideways for the next couple of days at least.

INTEREST RATES

Although Yellen's speech earlier in the month had indicated a 75bp hike in rates in 2017, the market will like to see what the FOMC says on Wednesday. How will it reconcile the recent dip in US Q4 GDP (http://kshitij.com/graph-gallery/fundamentals/usgdp)to 1.86%, compared to 3.47% in Q3 on the one hand and the concerns about Dollar strength on the other hand?

We see interest rates stabilising in the near term in both the USA and in Europe. While US interest rates have been rising again since mid-Jan, European rates have been rising through January as a whole. This is reflected in the rise in the German-US 2Yr Yield Spread (-1.92%), which remains in an uptrend for now.

But, we also keep in mind that the German 2Yr itself may find some Resistance near the current levels of -0.67%.

GOLD - The commodity closed lower the past week leaving risk of more weakness on the cards in the new week. On the downside, support comes in at the 1,180.00 level where a break will turn attention to the 1,170.00 level. Further down, a cut through here will open the door for a move lower towards the 1,160.00 level. Below here if seen could trigger further downside pressure targeting the 1,150.00 level. Conversely, resistance resides at the 1,200.00 level where a break will aim at the 1,210.00 level. A turn above there will expose the 1,220.00 level. Further out, resistance stands at the 1,230.00 level. All in all, GOLD looks to weaken further.

EURUSD - With the pair closing flat the past week after rejecting higher prices the past week, further weakness is likely in the new week. On the down, support lies at the 1.0650 level where a violation will aim at the 1.0600 level. A break of here will aim at the 1.0550 level. Conversely, on the upside, resistance comes in at 1.0750 level with a cut through here opening the door for more upside towards the 1.0800 level. Further up, resistance lies at the 1.0850 level where a break will expose the 1.0900 level. All in all, EURUSD faces further downside pressure in the new week as long as it trades and holds below the 1.0774 zone.

NZD/USD is sitting nicely at a confluence of resistance, capped by both a horizontal level tested by previous swing highs and the trend line drawn by connecting each lower high that we can clearly see on the daily chart.

NZD/USD Daily:

It's the three lower highs that are the most telling when it comes to displaying whether the bulls or bears are in control of the market. Each time that the bulls have bought the pair up, they haven't been able to sustain and with each failure to make a new high, you can see that the buyers are diminishing in numbers. When the buyers have been totally exhausted, all that remains are the sellers and this is where you see the big drops occur.

You can also see how important this horizontal level was back in May/June of last year, with some very strong rejections off the level shown on the chart by huge wicks followed by bearish candles. Yes price has chopped through the level since, but that doesn't make it any less significant, especially given the fact that it may be getting reactivated on that final rejection that we have marked on the chart above.

NZD/USD Hourly:

Zooming into the hourly chart on our MT4 platform to look for an entry, the problem is that there really isn't an obvious area of short term support that would turn to resistance and allow us to get in. I'm never one to advocate blindly shorting a higher time frame level, especially in the midst of the bullish momentum that is shown clearly on this hourly chart, so it's caution being shown by me.

The scenarios for here would be either short off a re-test of the lower blue level, or to wait for a 2nd test and hold of the daily zone and see if a new intraday entry level will form. For now we wait.