Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
US dollar bulls look to be making late bets on a strong PCE report
Information is not investment advice
XAU/USD: Gold facing a further consolidation above 23.6% retracement area. Bulls have returned recently.
Ichimoku Kinko Hyo
AUD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
US Market View
U.S. stocks are seen opening higher Friday, amid growing optimism over the economic recovery with President Biden set to unveil a fiscally-expansive budget. Confidence is growing about the strength of global economic improvement, helped by first-time jobless claims in the U.S. falling to a new pandemic low, a positive indication of the health of the world’s largest economy.
The Federal Reserve is coming under increasing pressure to give the market more guidance as to when it plans to start tapering back its bond-buying program. However, in Europe, these voices are much more quiet.
In fact, the European Central Bank is increasingly expected by market participants to extend the elevated pace of its emergency bond-buying at its next meeting on June 10, despite a likely economic rebound.
Crude oil prices edged higher Friday, on course for another monthly gain in May, the fourth of five this year, as investors wager that progress in combating the Covid-19 pandemic, particularly in the U.S. and Europe, will spur energy consumption, although gains are light ahead of a meeting of top producers early next week and with the return of Iranian exports still a possibility.
President Joe Biden is set later Friday to unveil a budget that would increase federal spending to $6 trillion in the coming fiscal year, according to a report by the New York Times. Although such a proposal would have to get through a divided Congress, where the Democrats hold only narrow majorities in the House and Senate, it would take federal spending to its highest levels since World War II.
USA Key Point
- The USD is the strongest and the NZD is the weakest as the NA session begins.
- EUR/USD continues to waffle below 1.2200 ahead of US PCE data late
- Equities keep firmer ahead of North American trading.
- ECB's Villeroy: Restrictions on bank dividends can and should be lifted from next September.
- USD/CHF extends rebound to fresh weekly highs above 0.9020 ahead of US data.
- GBP/USD drops to mid-1.4100s ahead of the key US inflation data.
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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.