Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD/JPY : pushes higher on firmer dollar, higher yields.
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 bulls return above 23.6% retracement area. Gold buyers keep the faith, price closes in on $1,800 and 38.2% retracement area.
US Market View
U.S. stock markets are set to open lower later, as the prospect of rising bond yields feeds through into higher expected costs of capital for companies, something that depressed returns on equity. The House of Representatives plans to vote as soon as Friday on President Joe Biden’s $1.9 trillion stimulus, meaning the Senate could vote on it as soon as next week.
The potential for this bill has been boosting Wall Street for several weeks, but investors are starting to grow concerned that this additional liquidity, coupled with a very easy policy stance from the Federal Reserve, will result in a rapid rise in inflation.
This all puts the focus onto Federal Reserve Chairman Powell ahead of his two-day testimony to Congress, starting Tuesday, on the economic outlook and the central bank’s monetary policy stance. Oil prices climbed Monday as U.S. production returned only slowly from last week’s severe cold snap, further tightening a global market where inventories have fallen sharply in recent weeks.
USA Key Point
- Dollar lower, focus stays on yields ahead of North American trading
- ECB president Lagarde to speak later today.
- EUR/USD back to little changed on the day as dollar push and pull continues.
- Italy reportedly extends ban on regional movement to 27 March.
- Germany's Merkel reportedly seeks four-stage plan to ease lockdown restrictions.
- Gold buyers keep the faith, price closes in on $1,800.
- Commodity currencies pare early gains.
- USD/CAD pares early losses, posts modest gains around 1.2620.
- NZD/USD retreats after spiking to multi-year highs, holds near 0.7300.
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.