Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Dollar keeps steadier after yesterday's bounce.
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
XAU/USD: Gold continuous to stand below 38.2% retracement area. Bearish pressure gains momentum once more.
EU Market View
Asian shares mostly held onto this week's gains on Thursday, despite hawkish remarks from a senior official at the U.S. Federal Reserve that boosted the dollar while weighing on risk appetite. The dollar edged higher in early European trading Thursday, after hawkish comments from the Federal Reserve prompted traders to price in an earlier tightening of monetary policy. The dollar has been in a state of flux over the last couple of months, first rising after the June meeting of the Federal Reserve saw several members bring forward their timetable for interest rate hikes before slipping back after Chairman Jerome Powell stated last week that interest rate increases were still in the distance.
Friday NFP release which is attracting the most attention. The median forecast is for 870,000 jobs, but there is a broad range of estimates given the potential impact of the spread of the delta Covid-19 variant n the labor market.
BoE will grow more optimistic and less dovish in today’s meeting but policy members as a group will be divided on tapering. At least one and likely two policymakers will vote for tightening. If there are more than two, we could see a sharply positive reaction in sterling.
Oil was up Thursday morning in Asia, with investors surprised by a build in US crude oil supply, but still supported by ongoing tensions in the Middle East. U.S. crude oil supply shows on Wednesday showed a build of 3.636 million barrels in the week to Jul. 30. Forecasts prepared by Investing.com had predicted a 3.102-million-barrel draw, while a 4.089-million-barrel draw was recorded during the previous week.
Gold was little changed on Thursday morning in Asia, as investors digested remarks from a top U.S. Federal Reserve official that indicated the central bank could begin asset tapering sooner than expected. The yellow metal gave up most of its overnight gains, however, after Fed Vice Chair Clarida suggested that conditions for higher interest rates can be met by end 2022. He also said the Fed could begin asset tapering later in the year, earlier than expected.
EU Key Point
- Australia: Melbourne to go into seven-day lockdown.
- Germany June factory orders +4.1% vs +1.9% m/m expected.
- US announced $750m weapons sale to Taiwan.
- Australia has 42 consecutive months of trade surplus.
- Australian state Queensland records another higher new COVID-19 case count today.
- Recap of comments from Fed's Daly - sees taper later this year or early 2022.
- Daly says her modal outlook is that the Fed will be able to taper later this year or early next year.
- UK says arrivals from France will no longer need to quarantine if they are fully vaccinated.
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.