Sample Category Title

• Nikkei 225 broke resistance level 33830.00
• Likely to rise to resistance level 35500.00

Nikkei 225 index earlier broke the key resistance level 33830.00 (which has been reversing the pair from the start of June).

The breakout of the resistance level 33830.00 accelerated the active short-term impulse wave 3 of the intermediate impulse (3) from the start of October.

Given the strong daily uptrend, Nikkei 225 index can be expected to rise further to the next resistance level 35500.00 (target price for the active impulse wave 3.

• EURJPY broke key resistance level 158.40
• Likely to rise to resistance level 160.95

EURJPY currency pair recently broke through the key resistance level 158.40 (which stopped the previous waves 1 and b, as can be seen below) intersecting with the 50% Fibonacci correction of the downward impulse from November.

The breakout of the resistance level 158.40 accelerated the active short-term impulse wave 3 of the intermediate impulse (5) from December.

Given the clear daily uptrend and the strongly bearish yen sentiment, EURJPY can be expected to rise further to the next resistance level 160.95.

Just a few hours ago, Andrew Bailey, the governor of the BoE gave a speech regarding his testimony, along with Deputy Governor Sarah Breeden, on the Financial Stability Report before the Treasury Select Committee, in London. The speech reflects the commitment of the BoE to continue its projection towards the target inflation rate. Although the speech didn’t yield much market volatility at the time of writing, here are my trade ideas based on the price data.

GBPUSD - D1 Timeframe

GBPUSD at the moment is approaching a rally-base-drop supply zone which aligns with the 88% of the Fibonacci retracement tool. I expect to see a short bearish move as a result of this. After the trendline might have been broken and retested, I can then look forward to a more average-term bearish entry.

Analyst’s Expectations:

• Direction: Bearish
• Target: 1.26640
• Invalidation: 1.28276

GBPAUD - H4 Timeframe

GBPAUD has reacted a few times from the overall supply zone on the 4-hour timeframe. Considering the bearish array of the moving averages, I am tempted to align my analysis in favour of a bearish outcome. However, since there is a trendline support hindering further bearish momentum at the moment, I will wait patiently for the break and retest of the trendline before position for a proper sell entry - it’s safer that way.

Analyst’s Expectations:

• Direction: Bearish
• Target: 1.89097
• Invalidation: 1.90529

GBPJPY - D1 Timeframe

GBPJPY recently broke below a trendline support as seen on the chart of the Daily timeframe price action shown above. Comparing the current price action with the Fibonacci retracement levels, I want to assume that the current bullish momentum is a an attempt for price to retest the trendline before dropping further. Based on this, I will watch to see how price reacts from the highlighed supply zone, or the 76% of the Fibonacci before positioning for a sell entry.

Analyst’s Expectations:

• Direction: Bearish
• Target: 183.559
• Invalidation: 185.845

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

Bulls regained traction and pushed the price up 0.75% on Wednesday, retracing the largest part of pullback from 2024 high (145.97, Jan 5) to 143.41 (Jan 9).

Fresh strength emerged after corrective dip was strongly rejected just above 200DMA (143.37), marking a healthy correction and keeping in play near-term bulls off 140.25 (Dec 28 low).

Converging 10/200DMA’s are on track to form golden-cross and further support the action, underpinned by predominantly bullish daily technical studies.

Bulls eye pivotal 146.00 resistance zone (recent peak / 50% retracement of 151.90/140.25), break of which to signal bullish continuation and expose targets at 146.95/147.45 (55DMA / Fibo 61.8%, reinforced by 100DMA).

Daily close above 145.00 handle to confirm bullish stance.

Yen lost ground on fading BoJ rate hike hopes, while traders await release of US December inflation report to get more clues about Fed next steps, amid growing talks that the central bank may start cutting interest rates as early as March, though Fed remains cautious and looks for more evidence before taking an action.

Res: 145.75; 145.97; 146.08; 146.58
Sup: 145.00; 144.70; 144.29; 143.66

Markets

It’s another stoic trading day where market driving news was scant. A Spanish bumper syndication was a sign of bond markets for the time being absorbing supply with ease The country racked in a record €137bn of bids for a sale with a rumoured size of €15bn. The US tests the market later today with its monthly 10-y auction ($37 bn). It’s not unusual for this time of the year that investors flock into the bond market as they typically begin shaping their portfolios. The expected upcoming monetary easing cycle is perhaps squeezing markets as well as it could lead to less juicy bond offers later this year. German bond yields lose some territory today, with net daily changes ranging from flat (2-y) to -2.6 bps (30-y). ECB Vice-President de Guindos and board member Schnabel were the latest in a series of central bank (including from the Fed) officials warning for a sharp and fast U-turn in monetary policy. The Spaniard’s approach was a more indirect one. He said that the ECB remains data-dependent before noting that the rapid disinflation we’ve seen so far will slow in 2024 and even pause at the beginning of the year. Schnabel pointed out that sentiment indicators are bottoming out and that financial conditions have loosened more than thought. Not that it mattered for markets though. They stick to discounting 150 bps of cuts this year. US Treasuries outperform going into tonight’s sale with declines of 2-3.2 bps across the curve. The US 10-y yield specifically is struggling to retain the 4% mark. UK gilts join the global trend by losing less than 2 bps. Bank of England governor Bailey in the meantime is appearing before parliament to talk about financial stability.

FX markets barely move today. The Japanese yen is the exception to the rule. JPY greatly underperforms all G10 peers following disappointing wage data this morning. Markets see the BoJ’s window of opportunity to normalize/escape from negative rates disappearing in front of their eyes. USD/JPY is on track for a close above 145 for the first time since early December. EUR/JPY is rising towards 159 with resistance at around 160 the only reference left before returning to the previous multi-year high of 164+. We’re keen to find out whether a weak yen can do what inflation numbers above the 2% target for months couldn’t: force the BoJ’s hand.

News & Views

Norwegian inflation rose by 0.1% M/M in December, slightly less than expected (0.2%). The Y/Y-print stabilized at 4.8% (vs 4.9% consensus). Underlying core inflation rose by 0.2% M/M with the core reading falling from 5.8% Y/Y to 5.5% (vs 5.6%). The latter was the lowest since September 2022. Significant declines in food and non-alcoholic beverages (-2% M/M), clothing and footwear (-1.7%) and transport (-0.4%) balanced increases in furnishings, household equipment and routine maintenance (+3.6%), miscellaneous goods and services (+0.4%) and housing, water, electricity, gas and other fuels (+0.2%). The Norwegian krone didn’t respond to the near consensus data (EUR/NOK 11.31). At its previous policy meeting, the Norges Bank suggest a wait-and-see approach with a first policy rate cut towards year-end. The disinflationary process and a slightly stronger krone suggests that risks, if any, are tilted to a slightly faster move. Norwegian money market discount almost 50 bps of rate cuts by the June meeting.
            
National Bank of Poland governor Glapinski holds a press conference following yesterday’s policy rate status quo (5.75%). He says that headline CPI may fall below 3% or even 2.5% in coming months on the back of frozen energy prices, a stronger zloty and subdued demand pressure. He fears a new acceleration though in H2 2024 amongst others because of return of the 5% VAT rate after March. Polish core CPI is the main focus. The Polish zloty trades volatile in a first reaction near EUR/PLN 4.34. Polish (short term) swap rates have a tendency to rise. If any, Glapinski doesn’t seem to be in a hurry to rapidly slash policy rates. The next key meeting is the March one, including new policy forecasts.

Daily Pivots: (S1) 1.0906; (P) 1.0936; (R1) 1.0961; More...

EUR/USD continues to trade sideway above 1.0876 and intraday bias stays neutral for the moment. On the downside break of 1.0876 will resume the fall from 1.1138 short term top to 1.0722 support next. However, break of 1.0997 will turn bias back to the upside for retesting 1.1138 high instead.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is seen as the second leg. While further rally could cannot be ruled out, upside should be limited by 1.1274 to bring the third leg of the pattern. Meanwhile, sustained break of 1.0722 support will argue that the third leg has already started for 1.0447 and below.

Daily Pivots: (S1) 1.2678; (P) 1.2722; (R1) 1.2753; More...

GBP/USD is staying in sideway trading below 1.2826 and intraday bias remains neutral at this point. On the upside, decisive break of 1.2826 high will resume whole rally from 1.2036. Nevertheless, break of 1.2611 will bring deeper correction to 1.2499 support instead.

In the bigger picture, price actions from 1.3141 medium term top are seen as a corrective pattern to up trend from 1.0351 (2022 low). Rise from 1.2036 is seen as the second leg that's in progress. Upside should be limited by 1.3141 to bring the third leg of the pattern. Meanwhile, break of 1.2499 support will argue that the third leg has already started for 38.2% retracement of 1.0351 (2022 low) to 1.3141 at 1.2075 again.

Daily Pivots: (S1) 0.8482; (P) 0.8507; (R1) 0.8549; More....

Intraday bias in USD/CHF stays neutral at this point. Consolidation from 0.8332 is in progress and stronger recovery cannot be ruled out. But outlook will stay bearish as long as 0.8665 support turned resistance holds. On the downside, break of 0.8332 will resume larger fall from 0.9243 to 0.8257 projection level.

In the bigger picture, the down trend from 1.0146 (2022 high) is in progress. Next target is 61.8% retracement of 1.0146 to 0.8551 from 0.9243 at 0.8257. Sustained break there could prompt downside acceleration to 100% projection at 0.7648. This will now remain the favored case as long as 0.8819 resistance holds.

Daily Pivots: (S1) 143.73; (P) 144.17; (R1) 144.93; More...

Intraday bias in USD/JPY remains neutral as range trading continues. On the upside, above 145.97 will resume the rebound from 140.25. But upside should be limited by 61.8% retracement of 151.89 to 140.25 at 147.44. On the downside, below 143.17 minor support will turn bias back to the downside for retesting 140.25 low.

In the bigger picture, for now, fall from 151.89 is still seen as the third leg of the corrective pattern from 151.89. Another decline through 140.25 will target 61.8% retracement of 127.20 to 151.89 at 136.63. Sustained break there will pave the way to 127.20 support (2022 low). However, firm break of 147.44 fibonacci resistance will dampen this view and bring retest of 151.89 instead.