Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD shows remarkable strength before NFP
Information is not investment advice
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.
XAG/USD: Silver continuous to stand below 23.6% retracement area. Bearish pressure is growing as US yields skyrocket.
EU Market View
A late rally in Chinese shares on Friday helped pull Asian stocks off one-month lows as investors picked bargains while attention shifted to U.S. non-farm payrolls due later in the day. On Thursday, U.S. stocks slumped after Federal Reserve Chair Jerome Powell disappointed some investors by not indicating that the Fed might step up purchases of long-term bonds to hold down longer-term interest rates.
Even though Powell made it clear that the Fed was not close to changing its ultra-loose monetary policy stance anytime soon, some analysts still worried rising Treasury yields could herald higher borrowing costs, thereby limiting the fragile U.S. economic recovery.
Climbing yields and dollar strength pummeled gold prices, which sank to a nine-month low as investors sold the precious metal to reduce the opportunity cost of holding the non-yielding asset. Looking ahead, highlights from macroeconomic calendar include US NFP, Canadian trade balance, BoE's Haskel, Fed's Bostic speeches.
EU Key Point
- Germany January factory orders comes at +1.4% vs +0.5% m/m than expected.
- Japan 10-year government bond yields extend fall after Kuroda comments.
- Germany reports 10,580 new coronavirus cases, 264 deaths in latest update today.
- BOJ Gov Kuroda says does not think it’s necessary to widen the band around long-term yield.
- BOJ Governor Kuroda says that higher yields would reduce the impact of monetary easing.
- BOJ Kuroda says Japan's economy is picking up, as a trend.
- Japan finance minister Aso says he has no comment when asked about the yen's fall.
- Major indices tumble with the NASDAQ/Russell index lead the declines.
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.