Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD: risk is making its way in?
Information is not investment advice
The economic background is still pretty heavy these days. The WHO warns that the worst is still to come in relation to the virus, and world state authorities are lowering their expectations of the economic output of their respective countries. Nevertheless, the risky mood doesn’t want to stay neglected juts because of the dire reality and makes its way into the stock and Forex market. While the former starts this week with a gain, the latter sees a weaker USD across the board.
The Aussie, a primary marker of risky market inclinations, is testing the resistance of the mid-term sideways channel that was containing it since the middle of June. If the trend stays, it will soon challenge the 6-month high set by the same June performance.
The British pound shows a similar trajectory to the one of the AUD but with stronger fluctuation and deviation from the main trend. After declining most of June, it is now looking upwards at the resistance of 1.2540.
The euro gives a stronger performance against the USD and seems to be confident with its higher lows than with its bullish spikes during the last 2 weeks. That pushes to the idea that if the mood persists throughout the week, it will cross the upper border of the trend and come to test 4-moths highs made in June at 1.1380.
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.