Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
All eyes focusing on Fed
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The pair is trading below the cloud. Further bearish pressure will lead the currency pair to retest the previous lows.
XAU/USD: Gold consolidates above the 23.6% retracement area the last day. Bullish trend gains momentum.
European Market View
Asian equity markets traded higher as the region received a tailwind from Wall Street where all major indices were lifted amid stimulus hopes. Looking ahead, highlights from macroeconomic calendar include UK and Canadian inflation, Eurozone, UK & US flash PMIs, US retail sales, DoEs, FOMC rate decision & press conference, ECB's de Guindos, Schnabel speeches. Optimism over a $1.4 trillion U.S. spending package increased after House of Representatives Speaker Nancy Pelosi invited other top congressional leaders to meet late on Tuesday to hammer out a deal to be enacted this week. Markets will now look to the U.S. Federal Reserve for new projections on whether the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom.
The central bank is to release a statement later in the day, with analysts expecting some guidance on when and how the Fed might change its bond purchases. Optimism for a trade deal on Brexit also boosted stocks, while contributing to a weaker dollar against the British pound and the euro.
EU Key Point
- Dollar holds a touch weaker to start the session
- China says that Australian government should take China's concerns seriously
- Gold set to launch higher on Fed's last meeting of the year
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.