The USD is up mostly in early trading with the greenback up the most vs the AUD (+0.51%) and the NZD (up 0.42%). The greenback is modestly lower vs JPY, but off session lows. In Australia overnight, CPI came in lower than expected sending the AUDUSD lower (USD higher):
- Headline CPI: +2.4% y/y (expected 2.5%, prior 2.8%).
- Headline CPI: +0.2% q/q (expected 0.3%, prior 0.2%).
- Trimmed Mean CPI (Core Inflation): +3.2% y/y (expected 3.3%, prior 3.5%).
- Trimmed Mean CPI (Core Inflation): +0.5% q/q (expected 0.6%, prior 0.8%).
- Weighted Median CPI (Core Measure): +3.5% y/y (expected 3.5%, prior 3.8%)
Today, the Bank of Canada will announce its interest rate decision at 9:45 AM ET. The expectation is for a cut of 25 basis points to 3.0% from 3.25%. Rates peaked at 5% before starting its move to the downside. Canadian CPI median inflation has move down from 5.0% to 2.4%. The economy will be impacted by any future tariffs from Pres. Trump (and a trade war). That will likely keep the door open for future policy action.
The Federal Reserve announcer interested to at 2 PM ET with Chair Powell’s press conference to begin at 2:30 PM. There is no dot plot or central tendencies which will be released today.
IN the video above, I kickstart the technicals that are driving the three major currency pairs to start the US session – the EURUSD, USDJPY and the GBPUSD.
EURUSD: The EURUSD stayed below the 100 hour MA at 1.0450 and a swing area between 1.0448 and 1.0461. That area would need to be broken to the upside to give the buyers more control. On the downside today, the subsequent fall, took the price below the 200 hour MAa at 1.04103 and the 50% of the move down from the December high at 1.04028. Staying below those levels are a tilt more to the downside. However, the price is not running ahead of the key FOMC rate decision (at least for now). ON the downside the low from last Tuesday coms in at 1.0371 and then the 38.2% of the range since December comes in at 1.0349 would be targeted.
USDJPY:The USDJPY buyers in the early Asian session tried to take the price above the 100 and 200 hour MA, but after a brief break, stalled and reversed (the 200 hour MA is at 155.718 and the 100 hour MA is at 155.506) and the price moved lower. Those MAs are now resistance. A move above would tilt the bias more to the upside. The subsequent fall, took the price down to test the 38.2% of the move up from the December low at 154.939. The price fell below that MA on Monday’s trading with all the stock selling momentum, but snapped back higher on the Trump tariff chatter. Moving below the 38.2% and the swing area between 154.77 to 154.96 would give the buyers to go-ahead to push more to the downside in the pair today.
GBPUSD:The GBPUSD, like the USDJPY, tried to extend above MA resistance in the early Asian session, but failed (the 200 bar MA on the 4-hour chart and 50% were both broken around the 1.2453 area). For today, a move back above those levels are needed to tilt the bias more to the upside. On the downside, the price is also now below the 100-hour MA at 1.24303. That tilts the bias more to the downside, with a swing area between 1.2352 and 1.23759. The broken 38.2% is in that area as well.
The snapshot of the major indices as implied by the futures shows:
- Dow Industrial Average down -50.35 points
- S&P index -11.20 pointss
- Nasdaq index up 19.71 points
In after-hours earnings yesterday,
- Starbucks EDS came in at $0.69 versus $0.67 expected. Revenues beat expectations at $9.4 billion versus $9.31 billion.Shares are trading up 2.0% in early trading.
- Stryker EPS came in at $4.01 versus $3.87 expected. Revenues $6.44 billion versus $6.36 billion expected.. Shares are trading down -1.19%
In the earnings today,
- T-Mobile US Inc (TMUS) Q4 2024: EPS $2.57 (BEAT; exp. $2.29), Revenue $21.87B (BEAT; exp. $21.31B). Shares are up 8.53%
- Corning Inc (GLW) Q4 2024: Core EPS $0.57 (BEAT; exp. $0.56), Revenue $3.87B (BEAT; exp. $3.76B). Guidance Q1 2025: Core EPS $0.48–$0.52 (exp. $0.48), Revenue $3.6B (exp. $3.54B). Shares are up 5.43%
Other earnings to be released later today include 3 of the Mag 7 – Tesla, Meta and Microsoft. Tomorrow Apple will report after the close.
- Wednesday, January 29:, ADP, General Dynamics, Tesla, Meta, Microsoft, IBM, Lam Research, ServiceNow
- Thursday, January 30: UPS, Mastercard, Dow, Nokia, Southwest, Caterpillar, Comcast, Apple, Intel, Visa
- Friday, January 31: ExxonMobil, Chevron, Colgate-Palmolive, Phillips 66
Looking at the US debt market, yields are lower on the day:
- 2 year yields 4.197%, -0.8 basis points
- 5 year yield 4.325%, -2.0 basis points
- 10 year yield 4.524%, -2.5 basis points
- 30 year yield 4.766%, -2.4 basis points
In other markets:
- Crude oil is trading down $0.47 at $73.30.
- Gold is trading down $6.33 or -0.22%. at $2756.75
- Bitcoin is trading up around $1000 at $102,295
This article was written by Greg Michalowski at www.forexlive.com. Source