Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Risk on gains as becomes clear that higher inflation is transitory
Information is not investment advice
XAU/USD: Gold facing a further consolidation above 23.6% retracement area. Bulls are struggling today to gain further control.
Ichimoku Kinko Hyo
CHF/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
US Market View
U.S. stocks are seen opening lower Thursday, adding to Wednesday’s sharp losses amid rising concerns the Federal Reserve may pare back its ultra-easy monetary policies sooner rather than later. This has been Wall Street’s worst week in six months on concerns increased inflation levels will pressure the Fed into raising interest rates more promptly than the central bank has guided. China's top e-commerce platform Alibab Group Holding Ltd reported a forecast-beating 64% surge in quarterly revenue on Thursday, as more people shopped online due to the coronavirus pandemic.
The economic data slate also commands attention Thursday, with the weekly jobless claims, the main release, especially after last week’s disappointing jobs report for April and record job opening numbers earlier this week. Economists are calling for 490,000 initial claims, below 500,000 for the second straight week, helped by the ramped-up vaccination program and widespread easing of social distancing restrictions.
Oil prices weakened Thursday, after Colonial Pipeline began to slowly restart the nation's largest fuel pipeline network, lifting concerns of a lengthy shortage of fuel to major population centers on the east coast of the U.S. Adding to the negative tone, the U.S. Energy information administration reported a draw of 427,000 barrels in crude oil inventories for the week ending May 7. This was a smaller drop than the 2.82-million-barrel draw expected, as well as the near 8-million-barrel reduction recorded during the previous week.
Britisg Airways cancelled its flights to and from Tel Aviv on Thursday, following the lead of the major American airlines in avoiding flying to Israel amid an escalating conflict. Israel prepared ground troops along the Gaza border on Thursday, a move that would recall similar incursions during Israel-Gaza wars in 2008-2009 and 2014, and Hamas launched rocket barrages at Israel during the region's fiercest hostilities in years.
USA Key Point
- Dollar keeps steadier so far on the session.
- AUD/USD falls below 0.7700 for the first time in more than a week.
- EUR/USD Price Analysis: The 100-day SMA holds.
- USD/JPY bulls in control as yields keep raising.
- EUR/JPY next on the upside comes in 133.00.
- NZD/USD drops to fresh nine-day lows below 0.7140 ahead of US data.
- USD/JPY to move back to the 110.97 March high.
- EUR/USD meets support near 1.2050, looks to US data.
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.