Sample Category Title

Daily Pivots: (S1) 1.2595; (P) 1.2632; (R1) 1.2666; More...

Intraday bias in USD/CAD is turned neutral as it retreated after hitting 1.2700. Another rise is mildly in favor as long as 1.2553 minor support holds. Pull back from 1.2964 should have completed with three waves down to 1.2448. Above 1.2700 will target 1.2812 resistance first, and then 1.2963. On the downside, below 1.2553 minor support will turn bias back to the downside for 1.2448 instead.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness. Break of 1.2005 will resume the down trend form 1.4667 and that carries larger bearish implications too.

Daily Pivots: (S1) 1.0352; (P) 1.0369; (R1) 1.0392; More....

Intraday bias in EUR/CHF remains neutral as consolidation from 1.0298 is extending. Upside of recovery should be limited well below 1.0510 resistance to bring another fall. Break of 1.0298 will resume the down trend from 1.1149 and target 161.8% projection of 1.1149 to 1.0694 from 1.0936 at 1.0200 next.

In the bigger picture, long term down trend from 1.2004 (2018 high) is still in progress. Next target is 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223. On the upside, firm break of 1.0505 support turned resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish even in case of rebound.

Daily Pivots: (S1) 0.8351; (P) 0.8377; (R1) 0.8395; More...

Intraday bias in EUR/GBP is turned neutral as it retreated after hitting 55 day EMA (now at 0.8418). On the upside, break of 0.8421 will resume the rebound from 0.8304 short term bottom towards 0.8598 resistance. On the downside, however, break of 0.8349 will turn bias back to the downside for 0.8304 low instead.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8598 resistance holds, towards long term support at 0.8276. We'd look for bottoming signal around there to bring reversal. Meanwhile, firm break of 0.8598 will now be an early sign of medium term bottoming and bring stronger rebound. However, sustained break of 0.8276 will argue that the long term trend has reversed.

Daily Pivots: (S1) 1.5752; (P) 1.5809; (R1) 1.5860; More...

Intraday bias in EUR/AUD remains neutral for the moment. On the upside break of 1.5944 will resume the rise from 1.5559 to 1.6168 first. On the downside, break of 1.5559 will resume the fall from 1.6168 to retest 1.5250/5354 support zone.

In the bigger picture, rise from 1.5354 is seen as the third leg of the corrective pattern from 1.5250 low. Further rise cannot be ruled out, but even in that case, strong resistance should be seen at 38.2% retracement of 1.9799 to 1.5250 at 1.6988. Larger down trend from 1.9799 is in favor to extend through 1.5250 at a later stage.

Daily Pivots: (S1) 128.23; (P) 128.71; (R1) 129.18; More....

A temporary low is formed at 128.23 and intraday bias in EUR/JPY is turned neutral first. Outlook is unchanged that consolidation pattern from 134.11 is extending with another falling leg. Further decline is expected as long as 129.76 resistance holds. Below 128.23 will target 127.36, and possibly further to 126.58 fibonacci level. On the upside, above 129.76 minor resistance will turn bias back to the upside to 131.59 resistance instead.

In the bigger picture, price actions from 134.11 are currently seen as a consolidation pattern only. As long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of medium term bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.

DXY:

On the H4 timeframe, prices are on bullish momentum and consolidating in a triangle. We would expect potentially a bounce from our 1st support at 95.878 in line with 23.6% Fibonacci retracement and 127.2% Fibonacci extension towards our 1st resistance at 96.219 in line with 61.8% Fibonacci extension and descending trendline resistance. Prices are trading above our ichimoku support and also ascending trendline, further supporting our bullish bias.

Areas of consideration:

• H4 time frame, 1st resistance at 96.219
• H4 time frame, 1st support at 95.878

XAU/USD (GOLD):

On the H4 chart, prices are on bullish momentum and consolidating in a parallel pattern. We see a potential for a dip from our 1st resistance at 1855.332 in line with 61.8% Fibonacci retracement and 161.8% Fibonacci projection towards our 1st support at 1830.416 in line with 38.2% Fibonacci retracement. RSI are close to a level where dips previously occurred.

Areas of consideration:

• 4h 1st support at 1832.595
• 4h 1st resistance at 1846.542

GBP/USD

On the H4 chart price is near 1st resistance level of 1.35130 which is also 38.2% Fibonacci retracement and 78.6% Fibonacci projection. Price can potentially dip to the 1st support level of 1.33817 which is also 100% Fibonacci projection and 61.8% Fibonacci retracement. Our bearish bias is supported by the ichimoku cloud indicator as price is trading under it.

Areas of consideration

• H4 1st resistance at 1.35130
• H4 1st support at 1.33817

USD/CHF:

In reference to yesterday’s analysis, price indeed pushed all the way up to 1st Resistance @ 0.91809. On the H4 timeframe, price is abiding to a descending channel, signifying a bearish momentum. Price is reacting at 1st Resistance, we can expect price to drop from 1st Resistance in line with 61.8% Fibonacci retracement and 100% Fibonacci projection towards 1st Support in line with 61.8% Fibonacci projection. Our bearish bias is further supported by the stochastic indicator where the %K line is approaching the resistance level.

Areas of consideration:

• Watch 1st Support at 0.90961
• Watch 1st Resistance at 0.91967

EUR/USD :

On the H4 chart , price is abiding by the ascending trendline and is near 1st support level of 1.12750 which is also 78.6% Fibonacci retracement. Price can potentially go to the 1st resistance level of 1.13859 which is also 38.2% Fibonacci retracement and 161.8% Fibonacci projection. Our bullish bias is supported by the stochastic indicator as it is near support level.

Areas of consideration

• 1st resistance at 1.13859
• 1st support at 1.12750

USD/JPY:

On the H4 timeframe, is abiding to the ascending channel on the daily, signifying an overall bullish momentum. We can now expect the price to bounce from 1st Support in line with 23.6% Fibonacci retracement towards 1st Resistance in line with 78.6% Fibonacci projection and 78.6% Fibonacci retracement. Our bullish bias is further supported by the RSI indicator is abiding to the ascending trendline support.

Areas of consideration:

• H4 1st resistance level 114.813
• H4 1st support level 113.787

AUD/USD:

On the H4, price broke out of the ascending channel, signifying an overall bearish momentum. We can expect price to drop from 1st Resistance in line with 78.6% Fibonacci projection and 38.2% Fibonacci retracement towards 1st Support in line with graphical support level and 127.2% Fibonacci projection. Our bearish bias is further supported by the Ichimoku cloud indicator where the price is holding below it.

Areas of consideration:

• H4 1st Support level 0.70883
• H4 1st resistance level 0.71724

NZD/USD:

On the H4, prices are at a swing low at 0.66830 in line with 161.8% Fibonacci projection. We see the potential for a bounce from our 1st support at 0.66830 in line with 161.8% projection towards our 1st resistance at 0.67349 in line with 100% Fibonacci retracement. RSI is at a level where bounces occurred previously. Alternatively, our stop loss will be placed at our 2nd support at 0.66286 in line with 200% Fibonacci Projection.

Areas of consideration:

• H4 time frame, 1st resistance at 0.67349
• H4 time frame, 1st support at 0.66830

USD/CAD:

On the H4, with price moving above the ichimoku cloud, we foresee potentially a bullish bounce that price will bounce from our 1st support at 1.26091 which is in line with horizontal overlap resistance and 38.2% Fibonacci retracement to 1st resistance at 1.27274 in line with the 78.6% Fibonacci retracement, which is a horizontal swing high resistance. Alternatively, price may break 1st support structure and head for 2nd support at 1.24604, in line with 100% Fibonacci projection and horizontal swing low support.

Areas of consideration:

• H4 time frame, 1st support at 1.26091
• H4 time frame, 1st resistance at 1.27274

OIL:

On the H4, with price moving above the ichimoku cloud. We expect a potential rise to our 1st resistance at 90.84 in line with 127.2% Fibonacci extension from our 1st support at 85.53 in line with 38.2% Fibonacci retracement. Alternatively, price may break 1st resistance structure and head for 2nd support at 79.75, which is a graphically swing low support and in line with 78.6% Fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st resistance of 90.84
• H4 time frame, 1st support of 85.53

Dow Jones Industrial Average:

On the H4, with price moving below the ichimoku cloud, signifying an overall bearish momentum. We can expect price to drop from our 1st resistance at 34563 in line horizontal graphical overlap and 38.2% Fibonacci retracement towards 1st support in line with horizontal overlap support ,161.8% Fibonacci extension level at 33307. Alternatively, price may break 1st resistance structure and head for 2nd resistance, which coincides with 61.8% Fibonacci retracement at 35516.

Areas of consideration:

• H4 time frame, 1st resistance of 34563
• H4 time frame, 1st support of 33307

Daily Pivots: (S1) 152.96; (P) 153.73; (R1) 154.54; More...

In temporary low is formed at 152.88 as GBP/JPY lost downside momentum. Intraday bias is turned neutral first. Outlook is unchanged that fall from 157.74 is seen as the third leg of the consolidative pattern from 158.19. Deeper decline is expected as long as 155.38 minor resistance holds. Below 152.88 will target 148.94 support next. On the upside, above 155.38 minor resistance will flip bias back to the upside for 157.74/158.19 resistance zone instead.

In the bigger picture, price actions from 158.19 are currently seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.

Markets are relatively steady in Asian today, as traders are awaiting main events of BoC and Fed policy decisions. Asian stocks are treading water after weaker close in US overnight. Dollar remains the strongest one for the week, followed by Yen and then Canadian. Swiss Franc is currently the weakest, followed by New Zealand Dollar and then Euro. Aussie and Sterling are mixed.

Technically, the decline in Yen crosses are losing some downside momentum but there is no clear sign of bottoming yet. We'll keep an eye on 130.07 minor resistance in EUR/JPY, 155.38 minor resistance in GBP/JPY and 82.07 minor resistance in AUD/JPY. As long as these levels hold, further decline would remain in favor in Yen crosses in general.

In Asia, at the time of writing, Nikkei is down -0.15%. Hong Kong HSI is up 0.16%. China Shanghai SSE is up 0.14%. Singapore Strait Times is up 0.85%. Japan 10-year JGB yield is down -0.0019 at 0.139. Overnight, DOW dropped -0.19%. S&P 500 dropped -1.22%. NASDAQ dropped -2.28%. 10-year yield rose 0.048 to 1.783.

IMF downgrade global growth forecasts on Omicron, inflation, China

IMF said the global economy enters 2022 in a "weaker position" as the spread of Omicron led to reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging market and developing economies. Also, the ongoing retrenchment of China's real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.

New GDP growth forecasts:

• Global: 2022 at 4.4% (downgraded by -0.5%); 2023 at 3.8% (upgraded by 0.2%).
• US: 2022 at 4.0% (downgraded by -1.2%; 2023 at 2.6% (upgraded by 0.4%).
• Eurozone: 2022 at 3.9% (downgraded by -0.4%); 2023 at 2.5% (upgraded by 0.5%).
• Japan: 2022 at 3.3% (upgraded by 0.1%); 2023 at 1.8% (upgraded by 0.4%).
• UK: 2022 at 4.7% (downgraded by -0.3%); 2023 at 2.3% (upgraded by 0.4%).
• Canada: 2022 at 4.1% (downgraded by -0.8%); 2023 at 2.8% (upgraded by 0.2%).
• China: 2022 at 4.8% (downgraded by -0.8%); 2023 at 5.2% (downgraded by -0.1%).

BoJ: Economy to grow well above potential in 2022

In the Summary of Opinions at the January 17-18 meeting, BoJ said, "a pick-up in Japan's economy has become evident" and the economy is "likely to continue recovering moderately". In fiscal 2022, it's "highly likely to grow at a pace that is well above its potential growth rate".

Though, attentions should be paid to risk of COVID-19 spread in China and that could have a "negative impact on Japan's economy through downward pressure on external demand and amplification of supply-side constraints."

CPI is expected to "exceed 1 percent" and may "momentarily rise to a level close to 2 percent" from April 2022 onward. It will then be "important to analyze what lies behind this inflation and whether it turns out to be sustainable."

A member noted "the key factor in assessing the underlying trend in the CPI is developments in wages. In order for the CPI to increase as a trend, it is necessary that services prices rise along with wage increases.

Also from Japan, corporate service price index rose 1.1% yoy in December, matched expectations.

Previews on BoC and a look at CAD/JPY

The opinions on whether BoC will raise interest today are divided. Some expected the tightening cycle to start imminently, with a total of 150bps rate hike this year to 1.75%. Yet, there are conservative opinions that BoJ would wait until April to act and deliver only 75bps hikes this year.

It should be noted that BoC has mentioned before that the condition for rate hikes would be met in the "middle quarters" of 2022. But some argued that the central bank is already behind the curve on controlling inflation. With the publishing of monetary policy report and economic projections, January and April meeting are the more appropriate choice then March. But could BoC keep its hand off until April. It's a close call.

Some previews on BoC:

• BoC Policy Meeting: It's Time for a Rate Hike
• Currency Pair of the Week: USD/CAD
• Bank of Canada Preview: Is the BOC Ready to Hike Rates?
• Bank of Canada to Make Highly-Anticipated Rate Decision
• Canada: Rate Hikes Close, But Not Quite Yet

Canadian Dollar's next move will depends on all factors including BoC, Fed and overall risk sentiment. Technically speaking, CAD/JPY is now seen as in the third leg of a consolidation pattern from 93.00. Deeper fall is in favor back to 87.42, or further to 100% projection of 93.00 to 87.42 from 92.16 at 86.58. We're not expecting a break of 38.2% retracement of 73.80 to 93.00 at 85.66. On the upside, a firm break of 93.00 high is not expected for now give the overall mixed sentiment.

So the range should be set between 85.66 and 93.00. A strong breakout on either side would imply a rather dramatic underlying development.

Fed to be a non-event, NASDAQ looks into 14k handle

Fed will more likely stick to script today and the FOMC meeting could be a non-event. It's clearly communicated that net asset purchases will end in March. Markets are expecting a 25bps hike in March too. Chair Jerome Powell is unlikely to say something that deviate from such expectations and rock the boat.

The baseline remains that there will be only three hikes, and no change would be revealed until March economic projections. Powell would also remain non-committal on the timing of balance run-off. So, these two questions would remain unanswered.

Some previews on Fed:

• FOMC Meeting Preview: Is There Still a "Fed Put"?
• Fed meeting: Will Asset Purchases End Early?
• January Flashlight for the FOMC Blackout Period
• Fed: End of Money Printing Brrrrr – (At Least) Four 25bp Rate Hikes this Year and QT in September

Markets will probably look more into other developments like tensions surrounding Ukraine for guidance. NASDAQ's u-turn on Monday was impressive but there was no follow through buying. For now, there is no clearly sign that the steep fall from 16212.22 is ending. The question is whether there would be slightly lengthier interim consolidations first, or the decline would resume right away.

A close above 14k, which is close to 38.2% retracement 15319.03 to 13094.65 at 13944.36, will suggest the recovery is going to last longer, and possibly further to 61.8% retracement at 14469. However, a close below 13414.14 minor support will raise the chance that free fall is coming back.

On the data front

US will release goods trade balance and new home sales.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 152.96; (P) 153.73; (R1) 154.54; More...

In temporary low is formed at 152.88 as GBP/JPY lost downside momentum. Intraday bias is turned neutral first. Outlook is unchanged that fall from 157.74 is seen as the third leg of the consolidative pattern from 158.19. Deeper decline is expected as long as 155.38 minor resistance holds. Below 152.88 will target 148.94 support next. On the upside, above 155.38 minor resistance will flip bias back to the upside for 157.74/158.19 resistance zone instead.

In the bigger picture, price actions from 158.19 are currently seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.

Economic Indicators Update

Key Highlights

• Gold price is gaining pace above the $1,800 and $1,820 resistance levels.
• It broke a connecting bearish trend line at $1,842 on the 4-hours chart.
• EUR/USD extended decline below the 1.1300 support zone.
• GBP/USD managed to stay above the 1.3440 support.

Gold Price Technical Analysis

After forming a base above $1,820, gold price started a fresh increase against the US Dollar. The price gained pace for a move above the $1,832 resistance zone.

The 4-hours chart of XAU/USD indicates that the price jumped above the $1,840 level. The price settled well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

Recently, there was a break above a connecting bearish trend line at $1,842 on the same chart. The price spiked above the $1,850 level.

On the upside, the price is facing resistance near the $1,855 level. The next resistance is near the $1,865 level. A clear break above $1,865 could send the price toward the $1,880 resistance zone in the near term.

On the downside, there is a short-term support forming near the $1,840 level. The next major support is near $1,830, below which there is a risk of a move towards $1,820. Any more losses might send the price towards $1,800.

Looking at EUR/USD, the pair failed to stay above the 1.1300 support and extended decline. Besides, GBP/USD was able to stay above the 1.3440 support zone.

Economic Releases to Watch Today

• Fed Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.
• BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.

Fed will more likely stick to script today and the FOMC meeting could be a non-event. It's clearly communicated that net asset purchases will end in March. Markets are expecting a 25bps hike in March too. Chair Jerome Powell is unlikely to say something that deviate from such expectations and rock the boat.

The baseline remains that there will be only three hikes, and no change would be revealed until March economic projections. Powell would also remain non-committal on the timing of balance run-off. So, these two questions would remain unanswered.

Some previews on Fed:

• FOMC Meeting Preview: Is There Still a "Fed Put"?
• Fed meeting: Will Asset Purchases End Early?
• January Flashlight for the FOMC Blackout Period
• Fed: End of Money Printing Brrrrr – (At Least) Four 25bp Rate Hikes this Year and QT in September

Markets will probably look more into other developments like tensions surrounding Ukraine for guidance. NASDAQ's u-turn on Monday was impressive but there was no follow through buying. For now, there is no clearly sign that the steep fall from 16212.22 is ending. The question is whether there would be slightly lengthier interim consolidations first, or the decline would resume right away.

A close above 14k, which is close to 38.2% retracement 15319.03 to 13094.65 at 13944.36, will suggest the recovery is going to last longer, and possibly further to 61.8% retracement at 14469. However, a close below 13414.14 minor support will raise the chance that free fall is coming back.