The video above outlines the technicals in play for the 3 major currency pairs, the EURUSD, USDJPY and GPUSD. Generally speaking the price action in each is limited (room to roam?). What are the key levels in each? A quick summary:
- The EURUSD yesterday stalled the recent rally in a swing area between 1.0448 to 1.0461. The high also stalled near the 61.8% retracement at 1.04563. The price rotated lower into the close yeaterday (closed at 1.0409). Today, the price is up and down in only a 30 pip range but is below the 50% of the range since the December high at1.04028, and the 50% of the range since 2022 at 1.04053. The price is at 1.0396.
- The USDJPY is only in a 56 pip range (average over the last month is 117 pips). The price low did find support against the high of a swing area between 155.95 and 156.219. THe price has traded above and below the 200 hour MA as the market decides what it wants to do. The 200 hour MA is at 156.37. The price is at 156.49 to start the day. Buyers in control but the next run higher has not gotten the shove. The BOJ is expected to raise rates by 25 bps later today/tomorrow morning
- The GBPUSD range is only 38 pips vs 106 pip average over the last month. The high stalled at the falling 100 bar MA on the 4-hour chart at 1.2327 and below the 50% of the 2025 trading range at 1.2337. Get above that area is more bullish in the short term at least. On the downside, however, the rising 100 hour MA and the 38.2% of the January trading range comes in at 1.22808 area. Getting below that level is needed to increase the bearish bias today and going forward.
On the economic calendar today in the North American session:
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Thu Jan 23 8:30am – CAD – Core Retail Sales m/m – Forecast: 0.1% – Previous: 0.1%
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Thu Jan 23 8:30am – CAD – Retail Sales m/m – Forecast: 0.2% – Previous: 0.6%
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Thu Jan 23 8:30am – USD – Unemployment Claims – Forecast: 221K – Previous: 217K
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Thu Jan 23 10:00am – EUR – Consumer Confidence – Forecast: -14 – Previous: -15
Pres. Trump is expected to address business leader in Davos via teleconference. CBS is reporting that the Pres. will be promoting his interest in attracting investment in the US. The speech is expected at 11 AM ET.
The weekly oil inventory data will be announced at 12 pm ET.
- Crude -1.645M
- Gasoline +2.281M
- Distillates +0.283M
The private data released late yesterday showed:
- Crude +1M
- Gasoline +3.2M
- Distillates +1.9M
The BOJ will announce its rate decision later today/early Friday. The consensus that has emerged is for a rate hike on Friday. Analysts expect the central bank to raise interest rates by 25 basis points at this meeting. Eamonn wrote that: .
- The Bank of Japan (BOJ) is growing more confident about the outcome of the 2025 spring wage negotiations, reinforcing expectations for a 25-basis-point rate hike at its January meeting. The shift in sentiment follows discussions on regional economic conditions at a branch managers’ meeting on January 9, where policymakers assessed wage and inflation trends.
- Deputy Governor Himino stated on January 14 that many companies plan to increase wages as much as or more than last year, signaling strong labor market momentum. The following day, Governor Ueda echoed this optimism, further raising the likelihood of a policy tightening move this month.
- At the same time, speculative positioning against the Japanese yen has been gradually increasing. With the Federal Reserve turning less dovish due to the resilience of the U.S. economy, a decision by the BOJ to hold rates steady could trigger further yen weakness, fueling carry trades and increasing import-driven inflation, which risks eroding consumer purchasing power.
The BOJ is unlikely to delay action, particularly given market reactions to Donald Trump’s first few days.
The schedule of Central Bank policy decisions ahead between now and month end:.
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Bank of Japan (BoJ): The BoJ’s Monetary Policy Meeting is set for January 23-24, 2025, Hike 25 basis points.
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Federal Reserve (Fed): The Federal Open Market Committee (FOMC) will meet on January 28-29, 2025. NO Change
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European Central Bank (ECB): The ECB’s Governing Council is scheduled to meet on January 30, 2025. Cut 25 basis points
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Bank of Canada (BoC): The BoC is expected to announce its interest rate decision on January 29, 2025.Cut 25 basis points
Shares in the US closed higher yesterday with the Nasdaq leading the way with a gain of 252 pointe or 1.28%. The S&P traded at a new all time high at 6100.81, but backed of and closing below the highest closing level (at 6090.27). The shares are trading mixed in the US in premarket trading:
- Dow up 41 points
- S&P -5.75 points
- Nasdaq -88 points
In the US debt market, yields are higher after rising yesterday.
- 2 year 4.299%, +0.3 basis points
- 5 year 4..458%%, +3.0 basis points
- 10 year 4.639%, +4.2 basis points
- 30 year 4.862%, +4.8 basis points.
IN other markets:
- Crude oil is up by $0.25 or 0.33% at $75.69.
- Gold is down -$12.02 or -0.45% at $2743.50
- Silver is down -$0.44 or -1.51% at $30.23
- Bitcoin is trading lower at $101,517. The high reached $103,766. The low was at $101,233.
This article was written by Greg Michalowski at www.forexlive.com. Source