Sample Category Title

Daily Pivots: (S1) 1.1240; (P) 1.1285; (R1) 1.1311; More...

EUR/CHF's break of 1.1298 minor support suggests that rebound from 1.1181 has completed at 1.1347, after rejection by 1.1348 resistance. Intraday bias is turned back to the downside for deeper fall. But we'd expect strong support from 1.1154/98 support zone to contain downside to bring rebound. On the upside, break of 1.1348 resistance will confirm near term reversal and target 1.1501 resistance next.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by support zone of 1.1198 (2016 high) and 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to complete it and bring rebound. A break of 1.2 key resistance is still expected in the medium term long term. However, sustained break of the mentioned support zone will mark reversal of the long term trend. In that case, 1.0629 key support will be back into focus.

General Trend:

• Asian chip companies rise, Hynix extends gains seen in the aftermath of earnings report
• Nikkei 225 supported by tech sector: Softbank advances over 1%, chip equipment firm SUMCO rises over 8%
• Japanese automakers rise, Nissan and Mitsubishi gain after Renault named new Chairman and CEO
• Shanghai Property index rises over 2%, telecom index lags
• Tencent rises over 3% on gaming approval in China
• In South Korea, Kia Motors declines on weaker earnings
• Australian financial AMP drops on dividend guidance
• Pound (GBP) moves above 1.31 amid Brexit headline
• Japan Tokyo core CPI rises to highest level since 2015, remains below BoJ 2% target
• Second phase of China RRR cut took effect on today’s session, equals 50bps (originally announced on Jan 4th)
• China Vice Premier Liu He expected to visit the US next week for trade talks (Jan 30-31st)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.2%
• (NZ) Reserve Bank of New Zealand (RBNZ) extends capital review submission deadline to May 3rd 2019; Proposing to almost double required amount of high quality capital banks will have to hold

China/Hong Kong

• Shanghai opened +0.2%, Hang Seng +0.6%
• (US) Commerce Sec Ross: we are experiencing global slowdowns; we are "miles and miles" away from a China trade agreement – CNBC
• (US) Treasury Sec Mnuchin: CNY is only one important aspect of China trade talks; will discuss currency issues at next week's trade talks - comments in DC
• (US) Pres Trump: it would be great if we could make a deal with China
• (CN) China PBOC: Banking system liquidity at 'relatively high' level after second stage of RRR cut
• (CN) China PBoC to introduce bills swap to provide liquidity support to perpetual bonds
• (CN) Guotai Junan Securities analyst said PBoC bill swap program related to perpetual bonds could mark the beginning of QE in China - US financial press
• (CN) China CSRC (securities regulator) refutes press speculation related to personnel change - China Press
• (CN) George Soros speaks out against China's President Xi from Davos - US press
• (CN) China PBoC sets Yuan Reference Rate: 6.7941 v 6.7802 prior
• (HK) IMF says it sees the risk of 'sharp' housing correction in Hong Kong: Sees 2019 GDP growth slowing to 2.9%, balance of risks shifted to downside

Japan

• Nikkei 225 opened +0.1%
• (JP) Bank of Japan (BOJ) might need to consider whether to revise certain output gap and services producer price index estimates, cites labor data inaccuracies – Japanese Press
• (JP) Japan Finance Min Aso: No problem in MOF corporate data, some figures were missing
• (JP) JAPAN JAN TOKYO CPI Y/Y: 0.4% V 0.2%E; CPI EX-FRESH FOOD (CORE) Y/Y: 1.1% V 0.9%E (highest since 2015)
• (JP) US-Japan trade talks likely to be delayed until Feb, partial US government shutdown cited - Nikkei

Korea

• Kospi opened +0.1%
• (KR) South Korea Foreign Min Kang: date for North Korea-US summit could be announced soon - Davos comments
• (KR) South Korea Jan Consumer Confidence: 97.5 v 97.2 prior

North America

• (US) Senate blocks Democratic govt funding package which did not include border wall (as expected)
• (US) Senate blocks Pres Trump's govt funding package which included border wall funding (as expected)
• (US) Sen Portman (R-OH): there are bipartisan talks over 3-week continuing resolution combined with 'downpayment on border security' and commitment from Democrats to 'do a deal'
• (US) Democrats said to still not support any kind of border wall funds, this position was made clear to Senate Majority Leader McConnell (R) - US financial press
• (US) SEMI: Dec North America Billings $2.11B v $1.94B prior, +8.5% m/m and -12.1% y/y

Europe

• (UK) Northern Ireland's DUP reportedly have privately agreed to support PM May's Brexit deal when she 'toughens it up' - UK's The Sun
• (DE) Germany Econ affairs ministry cuts 2019 GDP growth outlook to 1.0% (prior forecast 1.8%) - Handelsblatt

Levels as of 01:00ET

• Nikkei 225, +1.1%, ASX 200 +0.7%, Hang Seng +1.5%; Shanghai Composite +0.9%; Kospi +1.4%
• Equity Futures: S&P500 +0.6%; Nasdaq100 +0.8%, Dax +0.5%; FTSE100 +0.2%
• EUR 1.1327-1.1299 ; JPY 109.87-109.51 ; AUD 0.7114-0.7075 ;NZD 0.6779-0.6747
• Feb Gold +0.1% at $1,281/oz; Feb Crude Oil +1.4% at $53.86/brl; Feb Copper +0.7% at $2.665/lb

Eurozone PMI estimates put pressure on the single currency on Thursday. EURUSD experienced serious pressure, falling 0.5% to 1.1330 after the release of disappointing PMI estimates.

According to PMI, the manufacturing sector in Germany, which is the locomotive of the eurozone, is set to decline in January, as the indicator dropped to 49.9, while the 50 mark separates growth from decline. The service sector, on the contrary, has increased growth, but this case looks more like an exception. The euro zone continues to slow, and growth rates are close to stagnation.

Eurozone economic growth has been losing strength throughout the past year, but this did not stop the ECB from cutting the QE program.

Now market participants are focused on the comments related to ECB future policy. The ECB's mandate is to keep inflation close to 2%, but economic growth slowdown suppresses inflation. Moreover, the sharp oil and other raw materials prices decline at the end of last year puts additional pressure on inflation.

The ECB promises to keep rates unchanged at least until the autumn of the next year in its comments. Formally, this is not an obligation to raise the rate in the fall, but the markets have tuned exactly to this scenario. The weak data releases may push the ECB to even softer rhetoric, moving the deadlines for promises to keep policy unchanged.

Gold price declined recently and tested the $1,275 support area where buyers emerged. Crude oil price broke a key resistance near $53.50 and it may continue to move higher.

Important Takeaways for Gold and Oil

• Gold price is gaining momentum and broke the $1,280 resistance against the US Dollar.
• There is a crucial bearish trend line in place with resistance at $1,283 on the hourly chart of gold.
• Crude oil price broke a major bearish trend line at $53.00 on the hourly chart of XTI/USD.
• The price could accelerate higher and it may continue to rise towards the $54.50 level.

Gold Price Technical Analysis

Gold price started a major decline from the $1,295 resistance level against the US Dollar. The price declined heavily and broke the $1,292, $1,290 and $1,285 support levels.

There was even a break below the $1,280 support and a low was formed at $1,276 on FXOpen. Later, the price corrected higher and moved above the $1,280 and $1,282 resistance levels. There was also a break above the 23.6% Fib retracement level of the recent decline from the $1,295 high to $1,276 low.

However, the price is currently facing a monster resistance near the $1,285 level and the 50 hourly simple moving average. Moreover, there is a crucial bearish trend line in place with resistance at $1,283 on the hourly chart of gold.

Above the trend line, the next resistance is near the $1,286 level and the 50% Fib retracement level of the recent decline from the $1,295 high to $1,276 low. The main resistance is near the $1,288 pivot level, above which the price is likely to accelerate towards the $1,290 and $1,295 levels.

On the downside, an initial support is at $1,280, below which the price could revisit the $1,276 support level. If there is a break below the recent low, the price may move into a bearish zone towards $1,270.

Oil Price Technical Analysis

Crude oil price dipped earlier this week from the $54.50 resistance level against the US Dollar. The price traded lower and broke the $54.00 and $53.50 support levels before buyers emerged near the $52.00 zone.

A low was formed near the $51.88 level and later the price bounced back sharply. It broke the $52.50 resistance and the 50 hourly simple moving average. Besides, there was a break above the 50% Fib retracement level of the recent decline from the $54.47 high to $51.88 low.

More importantly, the price broke a major bearish trend line at $53.00 on the hourly chart of XTI/USD. It opened the doors for more gains and the price surpassed the $53.50 resistance.

Therefore, there are high chances of more gains above the $54.00 and $54.20 levels in the near term. If there is an upside break above $54.50, the price may even test the $55.00 level.

On the downside, an initial support is at $53.50, below which the price could test the $52.50 support and the 50 hourly simple moving average. As long as the price is trading above the $52.50 pivot level, it remains supported for more gains in the coming sessions.

Daily Pivots: (S1) 1.3332; (P) 1.3354; (R1) 1.3377; More...

USD/CAD retreats after hitting 38.2% retracement of 1.3664 to 1.3180 at 1.3365. Intraday bias is turned neutral first. On the upside, firm break of 1.3665 will extend the rebound from 1.3180 to t 61.8% retracement at 1.3479. We'd look for strong resistance from 1.3479 to limit upside. On the downside, break of 1.3231 will likely resume fall from 1.3664 to 61.8% retracement of 1.2781 to 1.3664 at 1.3118.

In the bigger picture, the medium term rise from 1.2061 (2017 low) might continue further. But the structure of such rise is not clearly impulsive so far. Hence, we'd stay cautious on strong resistance from 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 resistance to limit upside, and bring medium term topping. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.3036) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high).

Daily Pivots: (S1) 0.7059; (P) 0.7113; (R1) 0.7146; More...

Intraday bias in AUD/USD remains on the downside at this point. Rebound from 0.6722 should have completed at 0.7235. Further fall should be seen to 38.2% retracement of 0.6722 to 0.7235 at 0.7039 first. Break will target 61.8% retracement at 0.6918 and below. On the upside, however, break of 0.7166 minor resistance will turn bias back to the upside and will likely extend the rebound from 0.6722.

In the bigger picture, the failure to sustain below 0.6826 (2016 low) suggests that the long term down trend is not ready to resume yet. But prior rejection by 55 week EMA indicates underlying medium term bearishness in the pair. Outlook will also stay bearish as long as 0.7393 resistance holds. On the downside, sustained break of 0.6826 will target 0.6008 (2008 low).

Daily Pivots: (S1) 109.44; (P) 109.62; (R1) 109.82; More...

No change in USD/JPY's outlook. With 109.14 minor support intact, further rise is still mildly in favor. Rebound from 104.69 could target 61.8% retracement of 114.54 to 104.69 at 110.77. We'd look for topping signal above there. On the downside, break of 109.14 minor support will be the first sign of completion of the rebound. Intraday bias will then be turned back to the downside.

In the bigger picture, price actions from 125.85 (2015 high) are seen as a long term corrective pattern, no change in this view. Apparently, such corrective pattern is not completed yet. Fall from 114.54 is seen as part of the falling leg from 118.65 (2016 high). Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51, which is close to 100 psychological level. But in that case, we'd expect strong support from 98.97 to contain downside to bring reversal. Also, this bearish case will remain the preferred one as long as 114.54 resistance holds.

Daily Pivots: (S1) 0.9938; (P) 0.9958; (R1) 0.9981; More....

USD/CHF's consolidation from 0.9990 temporary top is in progress and intraday bias remains neutral. Deeper retreat might be seen. But downside should be contained above 0.9856 support to bring another rise. As noted before, correction from 1.0128 should have completed at 0.9716 already. On the upside, above 0.9990 will target a test on 1.0128 high next.

In the bigger picture, current development suggests that rise from 0.9186 has possibly completed with three waves up to 1.0128 already. Decline from 1.0128 could either be correcting this move, or reversing the trend. As long as 0.9541 support holds, we'd slightly favor the former scenario, and expect another rise through 1.0128 at a later stage. However, sustained break of 0.9541 will confirm trend reversal and bring deeper fall back to 0.9186 low.

Daily Pivots: (S1) 1.1266; (P) 1.1330; (R1) 1.1371; More.....

EUR/USD's fall from 1.1569 extends to as low as 1.1289 so far. Intraday bias is back on the downside for 1.1215 support. Break will resume larger down trend from 1.2555. On the upside, break of 1.1394 resistance will argue that the corrective pattern from 1.1215 is extending with another rise. And, intraday bias will be turned to the upside for 1.1569 and above.

In the bigger picture, as long as 1.1814 resistance holds, down trend down trend from 1.2555 medium term top is still in progress and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. However, break of 1.1814 will confirm completion of such down trend and turn medium term outlook bullish.

Four week winning streak coming to an end

It's safe to say that this hasn't been one of the more memorable weeks in the markets, with speculation and sporadic statements filling the void left by a lack of news flow.

It is encouraging then that with so much occurring in the background – Brexit planning, US government shutdown, trade talks between the US and China – markets have broadly stabilised following their recent good run, rather than reverting back to the sell-off they experienced previously.

The four week winning streak may be coming to an end but I don't think investors will be discouraged. Of course, the one outlier in all of this is the FTSE 100 which has had a tough week, dropping more than 2% and underperforming its peers on a regular basis. But with this largely being attributed to a stronger pound on the back of the risk of no deal diminishing, I think we can give it a pass.

Trade talks between the US and China are being closely monitored, being a significant global risk at a time when the economy is looking shaky. There's been a lot of speculation of the last couple of weeks and Wilbur Ross' claim that the two sides are “miles and miles” from a deal with “lots and lots of issues” isn't going to fill people with confidence. Still, these negotiations do typically come with posturing from both sides and investors may will willing to look through it, with previous commentary being much more positive.

It would appear that everything this week has been laying the groundwork for another potentially turbulent week to come. It may have been a little quiet on the Brexit front but all of this has been ahead of Tuesday's vote on her plan B which includes various amendments that could have a great impact if successful. No deal appears to be diminishing and Tuesday could play a big role in that.

Gold resilient in the face of a rising dollar

Gold has been consolidating throughout this week, showing great resilience around $1,280 despite the dollar making some gains in that time. Gold is typically sensitive to movements in the greenback and hasn't even really had the benefit of risk averse markets, with them having consolidated themselves as we've said. This is potentially a bullish signal although I still see another drop being possible, with $1,260 then becoming an area of interest.

Oil rallies despite large inventory build

Oil has also edged lower over the course of the week, pulling back from a key resistance zone in both Brent and WTI – around $65 and $55, respectively, which looks likely to come under pressure again in the not too distant future. It's up more than 1% today, despite a large inventory build weighing briefly on Thursday, with the gains being attributed to risks around Venezuelan exports, as the US formally recognised opposition leader Juan Guaido as President as the crisis in the country deepens.