Sample Category Title

USDJPY (110.76): The USDJPY continues to hover around the 110.70 level of support. The strong bullish close last week near this level and the short term dip indicates a temporary base being formed. On the 4-hour chart, minor resistance is seen at 111.00 - 110.88 region. USDJPY will need to close above this level in order to target 111.61 resistance level. To the downside, if the resistance holds the gains, we could expect USDJPY to move back into its previous range. A break below the previous lower support at 110.40 will be key but this level could hold the declines in the short term.

EURUSD (1.2223): The EURUSD is seen consolidating near the 4-year highs as Friday's attempts to recover failed. Price action as seen on the 4-hour chart shows the EURUSD seeking dynamic support off the median line. We expect a short term rebound off this level as EURUSD could remain range bound heading into Thursday's ECB meeting. The upside gains are called near the current highs of 1.2282 level. Further gains can be expected only on a convincing close above this level. To the downside, the support at 1.2184 remains in focus and this could form the short term range for the EURUSD.

The U.S. dollar was seen closing with some gains on Friday, in the hope that Washington would pass the spending bill. Although it was cleared by the U.S. House, the bill stalled in the U.S. Senate. Late night talks over the weekend did not yield many results and lawmakers are expected to reach some agreement today.

The Euro was seen attempting to recover the losses on Friday but after rising to an intraday high of 1.2294, the currency pair gave up the gains and settled lower to close at 1.2223.

Looking ahead, the economic calendar is light today. The Eurogroup meetings are scheduled throughout the day while in the NY trading session, Canada will be releasing its wholesale sales data. Economists forecast an increase of 1.0% for the month.

The NZD/USD consolidation has just broken above the retracement trend line and D H3 camarilla level at 0.7288. The pair has been in a steady uptrend since December 2017, and 0.7305 could be the next target. Breakout of 0.7305 or 4h close above it and the famous "kiwi" could go to 0.7330-50. As long as it stays above 0.7240, the intraday trend is bullish.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The British pound has started to turn lower against the U.S dollar, as the U.S dollar index start to recover from three-year trading-lows. The GBPUSD pair is currently trading around the 1.3860 level, with intraday sellers largely in control while price-action holds below the key 1.3880 level. With a lack of high-impacting macro-economic data from the United Kingdom on Monday, sterling traders are likely to focus on negotiations centering around the current United States government shutdown.

The GBPUSD pair remains intraday bearish while trading below the 1.3880 level, key downside targets for the pair are 1.3810 and 1.3720.

Should price-action on the GBPUSD pair start to trade above the 1.3880 level, attention may shift back toward the 1.3944 and 1.4000 resistance levels.

The U.S dollar is trying to recover upside buying momentum against the Japanese yen currency, as the U.S dollar index starts to recover from depressed levels. Price-action is currently trading above the key 110.80 level, after the USDJPY pair found strong technical support around the 110.50 level on Friday. Traders are likely to remain increasingly cautious ahead of BOJ’s interest rate decision and policy statement on Tuesday, as speculation surrounding the reduction of the Central Banks QE stimulus programme mounts.

USDJPY intraday buyers retain control of the pair while price trades above the 110.80 level, further upside towards the 111.22 and 111.48 levels seems possible.

Should the USDJPY pair start to move below the 110.80 level, a sell-off towards 110.50 and 110.33 remains possible.

The final full week of January will be off to a slow start on Monday, with very few economic data releases scheduled. In the interim, investors will continue to analyze a shutdown of the US government after lawmakers failed to pass a new spending measure.

The US federal government officially closed its doors on Saturday after a proposed extension was voted down by the Republican-controlled Senate. The measure would have kept the government functioning through 16 February.

US stock futures were down across the board on Monday, which pointed to a soft start to the day on Wall Street. Political uncertainty surrounding the Trump administration was a thorny issue for investors during the first year the administration was in office.

In terms of economic data, the Greek government will report on the current account balance at 09:00 GMT. Athens reported a current account deficit of €624 million for October.

Shifting gears to the United States, the Chicago Federal Reserve Bank will issue its national activity index for the month of December. The monthly reading is forecast to rise to 0.44 from 0.15 in November.

North of the border, the Canadian government will report on wholesale sales for the month of November. Sales are projected to rise 0.6% in November after climbing 1.5% the month before.

Attention quickly shifts to monetary policy on Tuesday as the Bank of Japan (BOJ) votes on interest rates. No changes are expected at this time.

The European Central Bank (ECB) is also scheduled to vote on interest rates later this week.

In terms of forthcoming data releases, US GDP, durable goods orders and housing sales will be reported throughout the week.

EUR/USD

Europe’s common currency is trading well off last week’s peak, but continues to show strong upside momentum. The EUR/USD is trading well above 1.2200 and is likely to continue higher now that a US government shut down has undermined demand for the greenback.

GBP/USD

The British pound closed out another solid week against the dollar, with the cable briefly rising above 1.3900. The GBP/USD exchange rate was last up 0.1% at 1.3861. The pair faces immediate resistance at 1.3900, followed by the 1.3945 level. Support is located at 1.3800.

USD/JPY

After staging a mild recovery last week, the US dollar drifted lower against the Japanese yen, a sign that bearish pressure remained. The USD/JPY exchanger rate retreated from a high of around 111.40 all the way down to 111.50 amid concerns of a US government shutdown. With the US government shutting down, demand for the yen will likely stay elevated over the short term. The pair was last seen trading at 110.79 for a gain of 0.2%.

Here are the latest developments in global markets:

FOREX: The US dollar index opened with a small negative gap on Monday after news that the US government shut down on Friday, but managed to recover its losses to trade marginally higher in the following hours.

STOCKS: Japanese markets were in the green today, albeit not by much. The Nikkei 225 and the Topix indices closed up by 0.03% and 0.1% respectively. In Hong Kong, the Hang Seng is 0.4% higher, rising to a fresh record high, while in Europe, futures tracking the Euro Stoxx 50 suggest the index could open slightly higher. In the US, the S&P 500 and Nasdaq Composite indices closed at yet another record high on Friday, with US equity investors appearing unfazed by the threat of a government shutdown. The Dow Jones was up 0.2%, closing just shy of its all-time highs as well. That said, futures tracking the Dow, S&P and Nasdaq 100 are all in negative territory at the time of writing.

COMMODITIES: Energy prices traded somewhat higher, with WTI and Brent crude being up 0.1% and 0.3% respectively. The positive reaction may be owed to some remarks by Saudi Arabia’s energy minister on Sunday, who hinted that there is a consensus among major oil producers to continue with their supply curbs even beyond 2018, when the current production-cut deal expires. In precious metals, gold was down nearly 0.1%, last trading near the $1330 per ounce territory.

Major movers: US government shuts down while Germany moves closer to forming a government

In the US, a government shutdown began on Friday, after lawmakers in the Senate failed to reach an agreement on a deal to fund government expenses, amid major disagreements on immigration and border security. The greenback opened with small negative gaps against its major counterparts, but the weakness was not sustained, with the dollar index managing to claw back its losses and even trade slightly higher in the following hours.

Combined with the fact that major US equity indices closed at new record highs on Friday, the subdued market reaction suggests investors are not particularly worried by the government shutdown. It appears the market expects this situation to be resolved fairly quickly, before it has any material impact on the economy or business sentiment. In this respect, the Senate is expected to vote again today (1700 GMT) on whether to pass a bill that would fund the government until early February.

Encouraging political developments in Germany during the weekend helped euro pairs to open with positive gaps this week, though the moves were short-lived, with euro/dollar and other euro crosses giving back their gains in the following hours. The Social Democrats (SPD) voted in favor of pursuing coalition talks with Merkel’s conservatives, opening the door for a stable and pro-EU government in Germany after several months of uncertainty. Although there are still many hurdles to be resolved until a deal is finalized, this is still seen as a significant step towards an accord. The single currency could enjoy some support from this positive sentiment, but its broader direction will probably be dictated by the ECB policy decision on Thursday. Markets are likely to focus on whether President Draghi will echo recent remarks by his colleagues and express discomfort with the recent appreciation in the euro.

Elsewhere, the yen was somewhat softer against both the euro and the dollar. The Bank of Japan (BoJ) is due to announce its policy decision tomorrow, and while there are no expectations for any change in policy, traders will be watching Governor Kuroda’s press conference closely for any signals on the future direction of policy. Given recent chatter that the BoJ is slowly heading for the stimulus-exit door, Kuroda may take the opportunity to push back against such speculation, reiterating his dovish remarks after the December gathering.

Day ahead: US and German politics gathering attention

In the absence of major data releases and amid the federal government shutdown, politics are in the forefront in the US. Market participants will be closely monitoring the situation with a vote to fund government operations through February 8 set to take place at 1700 GMT; the longer the stalemate remains in place, the more likely the US currency will come under pressure.

Canada will see the release of figures on November wholesale trade at 1330 GMT; the numbers are not expected to move markets.

ECB President Mario Draghi and executive board member Benoit Coeure will be participating in a Eurogroup meeting taking place today.

The earnings season continues with Netflix releasing quarterly results after Monday’s US market close.

The global elite will tomorrow be attending the World Economic Forum at Davos, Switzerland.

Day ahead: US and German politics gathering attention

In the absence of major data releases and amid the federal government shutdown, politics are in the forefront in the US. Market participants will be closely monitoring the situation with a vote to fund government operations through February 8 set to take place at 1700 GMT; the longer the stalemate remains in place, the more likely the US currency will come under pressure.

Canada will see the release of figures on November wholesale trade at 1330 GMT; the numbers are not expected to move markets.

ECB President Mario Draghi and executive board member Benoit Coeure will be participating in a Eurogroup meeting taking place today.

The earnings season continues with Netflix releasing quarterly results after Monday’s US market close.

The global elite will tomorrow be attending the World Economic Forum at Davos, Switzerland.

EURUSD challenged a fresh 3-year high above the 1.2300 price level during the previous week but currently, the price is holding below the aforementioned level. The price jumped to 1.2320 for the first time since December 2014, after extending a strong rally that started from the low of the 1.1900 handle.

Looking at the daily timeframe, it is worth mentioning that the Asian session has started with a gap up and the price pared those gains in the last hours. In addition, over the last five trading days, the price is consolidating within the 1.2160 support barrier and the 1.2320 resistance level, waiting for any significant economic data to push the price in either direction.

From the technical point of view, the momentum indicators seem to be in confusion. The RSI indicator dropped below the overbought area but is standing near the 70 level, however, the MACD oscillator lies above its trigger and zero line but with weaker momentum than the previous sessions. Furthermore, the 20 and 40-day simple moving averages are following the upward movement.

A sharp buying interest above the 3-year high of 1.2320, could drive the world’s most traded currency pair towards the 1.2570 resistance level, taken from the peak from December 14, 2014. This is considered to be a strong resistance area which has been rejected a few times in the past.

On the flip side, if prices reverse lower, immediate support should come at 1.2160 and slightly lower at 1.2090. A drop below this area would take the price closer to the 1.1900 strong psychological level. A breach of this level would shift the medium-outlook from positive to neutral.

The Euro opened with gap-higher on Monday against the dollar which came under increased pressure on US government shutdown, but eased during Asian session as greenback started to regain traction. The pair peaked at 1.2271 after opening and subsequent dip found footstep at 1.2214 (Friday's low). Some recovery attempts were seen in early European trading, but gains were unable to clearly break barrier at 1.2235 (cluster of hourly MA's). Studies on lower timeframes are in neutral setup and show no clear direction in the near-term. Larger picture (daily) shows the pair in extended consolidation range after failure to clearly break 1.2300 barrier, but overall uptrend stays intact. The EURUSD pair was up over 2% in the first three weeks of 2018, extending broader uptrend from Jan 2017. Recent gains were boosted by rising expectations that the European Central Bank will end its QE program, as signaled by hawkish ECB minutes two weeks ago. Focus turns towards ECB policy meeting on Thursday, with continuing hawkish tone from the central bank to further inflate the Euro. Daily techs are firmly bullish and continue to underpin, with current consolidation being triggered by overbought conditions. Bullish structure is expected to stay intact while the price holds above pivotal support at 1.2165 (consolidation range low, reinforced by rising 10SMA). Only break here would signal deeper correction, however, extended dips would offer fresh buying opportunities as buying dips on strong uptrend remains favored scenario. The pair may stay within the range until ECB meeting, with EU/German ZEW data on Tuesday and PMI data release on Wednesday also being in focus.

Res: 1.2249, 1.2271, 1.2296, 1.2323
Sup: 1.2214, 1.2200, 1.2165, 1.2123